EXHIBIT 10.2
PLEDGE AGREEMENT dated as of October 4, 1996 made by DAL-TILE GROUP
INC., a Delaware corporation (the "Pledgor"), in favor of THE CHASE MANHATTAN
BANK ("Chase"), as administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") from time to time parties to the Credit
and Guarantee Agreement, dated as of August 14, 1996 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among the
Pledgor, Dal-Tile International Inc., a Delaware corporation (the "Parent"), the
Administrative Agent, Credit Suisse, as Documentation Agent, Goldman Sachs
Credit Partners L.P., as Syndication Agent, and the Lenders.
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make loans to, and the issuing Bank has agreed to issue certain
letters of credit for the account of, the Pledgor upon the terms and subject to
the conditions set forth therein;
WHEREAS, the Pledgor is the legal and beneficial owner of the shares of
Pledged Stock (as hereinafter defined) issued by the issuer (as hereinafter
defined); and
WHEREAS, pursuant to subsection 7.10 of the Credit Agreement, the
Pledgor is required to execute and deliver this Pledge Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Lenders, the Syndication Agent and the Documentation
Agent to enter into the Credit Agreement and to induce the Lenders to make
their respective loans to, and the Issuing Bank to issue certain letters of
credit for the account of, the Pledgor under the Credit Agreement, the Pledgor
hereby agrees with the Administrative Agent, for the ratable benefit of the
Lenders, as follows:
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1. Defined Terms. Unless otherwise defined herein, terms that are
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defined in the Credit Agreement and used herein are so used as so defined, and
the following terms shall have the following meanings:
"Code": the Uniform Commercial Code from time to time in
effect in the State of New York.
"Collateral": the Pledged Stock and all Proceeds thereof.
"Issuer": the company noted on Schedule 1 hereto.
"Obligations": as defined in the Credit Agreement.
"Pledge Agreement": this Pledge Agreement, as amended, supplemented
or otherwise modified from time to time.
"Pledged Stock": 20,475,000 (twenty million four hundred and
seventy five thousand) shares representing 65%
(sixty five percent) of Capital Stock of the
Issuer and all stock certificates, options or
rights of any nature whatsoever that may be
issued or granted by the Issuer to the Pledgor
while this Pledge Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in
Section 9-396(1) of the Code on the date hereof
and, in any event, shall include, without
limitation, all dividends or other income from
the Pledged Stock, and
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any and all collections on the foregoing or
distributions with respect to the foregoing.
2. Pledge; Grant of Security Interest. The Pledgor hereby delivers to the
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Administrative Agent, for the ratable benefit of the Lenders, all of the
Pledgor's right, title and Interest in the Pledged Stock, and hereby transfers
and grants to the Administrative Agent, for the ratable benefit of the Lenders,
a first security interest in all of the Pledgor's right, title and interest in
the Collateral, as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
3. Creation of the Pledge; Endorsements. In order to create and constitute
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a first security interest in and on the Pledged Stock, the Pledgor in this act
(i) endorses in guarantee in favor of the Administrative Agent, for the ratable
benefit of the Lenders, the certificates representing the Pledged Stock, (ii)
delivers the endorsed certificates to the Administrative Agent, and (iii)
registers the Pledged Stock in the shareholders' registry book of the Issuer.
4. Representations and Warranties. The Pledgor represents and warrants
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that:
a. the shares of Pledged Stock listed on Schedule I constitute 65% (sixty
five percent) of the issued and outstanding shares of all classes of
the Capital Stock of the issuer;
b. all the shares of Pledged Stock have been duly and validly issued and
are fully paid and nonassessable;
c. the Pledgor is the record and beneficial owner of, and has good title
to, the Pledged Stock, free of any and all Liens or options in favor
of, or claims of, any other Person, except the Lien created under this
Pledge Agreement;
d. upon endorsement in guarantee and delivery to the Administrative Agent
of the stock certificates evidencing the Pledged Stock, together with
the registry of the Pledged Stock in the shareholders' registry book of
the Issuer, the Lien granted pursuant to this Pledge
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Agreement will constitute a valid, perfected first priority Lien on the
Collateral (except, with respect to Proceeds, only to the extent
permitted by Section 9-306 of the Code), enforceable as such against
all creditors of the Pledgor and any Persons purporting to purchase any
Collateral from the Pledgor except in each case as enforceability may
be affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; and
e. the Pledgor's chief executive office and chief place of business, and
the place where the Pledgor keeps its records concerning the
Collateral, is located at: 7834 Hawn Freeway, P.O. Box 17130, Dallas,
Texas 75217, or such other location as the Pledgor shall inform the
Administrative Agent in accordance with Section 5(c).
The Pledgor agrees that the foregoing representations and warranties shall
be deemed to have been made by it on each Borrowing Date by the Pledgor under
the Credit Agreement on and as of such Borrowing Date as though made hereunder
on and as of such Borrowing Date.
5. Covenants. The Pledgor covenants and agrees with the Administrative
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Agent and the Lenders, that, from and after the date of this Pledge Agreement
until the Obligations are paid in full and the Commitments are terminated:
a. If the Pledgor shall, as a result of its ownership of the Collateral,
become entitled to receive or shall receive any stock certificate
(including, without limitation any certificate representing a stock
dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in
connection with any organization), promissory note or other instrument,
option or rights, whether in addition to, in substitution of, as a
conversion of, or in exchange for any of the collateral, or otherwise
in respect thereof, the Pledgor shall accept the same as the agent of
the Administrative Agent and the Lenders, hold the same in deposit or
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly
endorsed in guarantee by the Pledgor to the Administrative Agent, to be
held by the Administrative Agent, subject to the terms
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hereof, as additional collateral security for the Obligations. Any sums
paid upon or in respect of the Collateral upon the liquidation or
dissolution of the Issuer shall be paid over to the Administrative
Agent to be held by it hereunder as additional collateral security for
the Obligations, and in case any distribution of capital shall be made
on or in respect to the Collateral or any property shall be distributed
upon or with respect to the Collateral pursuant to the recapitalization
or reclassification of the capital of the Issuer or pursuant to the
reorganization thereof, the property so distributed shall be delivered
to the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Collateral shall be
received by the Pledgor, the Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such
money or property in deposit or trust for the Lenders, segregated from
other funds of the Pledgor, as additional collateral security for the
Obligations. If (i) the Collateral grants optional rights, (ii) the
Pledgor may not exercise such rights directly, and (iii) the
Administrative Agent shall have the right to exercise such rights, the
Administrative Agent shall, so long as no Default or Event of Default
shall have then occurred and be continuing or would result therefrom,
exercise such rights as instructed by the Pledgor, provided that, the
exercise of such optional rights on behalf of the Pledgor (at the
reasonable judgment of the Administrative Agent) would not be
inconsistent or would not result in a violation of applicable law, the
Credit Agreement or any other of the Loan Documents, and provided
further that, the Pledgor provides the Administrative Agent with
sufficient funds to exercise those rights, if required, at least 2 days
prior to the relevant payment date.
b. Without the prior written consent of the Administrative Agent, the
Pledgor will not (i) vote to enable, or take any other action to
permit, the Issuer to issue any stock or other equity securities of
any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other
equity securities of any nature of such issuer, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, or (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with respect
to, any of the Collateral, or any interest therein, except for the Lien
provided for by this Pledge Agreement. The Pledgor will defend the
right, title and interest of the Administrative Agent and the Lenders
in and to the Collateral against the claims and demands of all Persons
whomsoever.
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c. At any time and form time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Pledgor, the
Pledgor will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and
of the rights and powers herein granted. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by
any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in guarantee or otherwise in a
manner satisfactory to the Administrative Agent pursuant to applicable
law, to be held as Collateral pursuant to this Pledge Agreement.
d. The Pledgor agrees to pay, and to save the Administrative Agent and the
Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or
other similar taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.
e. The Pledgor will not, unless it shall give 45 days' prior written notice
to such effect to the Administrative Agent (i) change the location of
its chief executive office or chief place of business from that
specified in Section 4(e) hereof, or remove its books and records from
such location or (ii) change its name, identify or structure to such an
extent that any financing statements filed by the Administrative Agent
in connection with this Agreement would become misleading.
f. The Pledgor shall ensure that all Pledged Stock will be registered in
the name of the Administrative Agent in the shareholders' registry book
of the issuer and that all certificates representing or evidencing any
substitution of or addition to the Pledged Stock shall forthwith after
issuance be indorsed in guarantee in favor of the Administrative Agent,
for the ratable benefit of the Lenders.
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6. Cash Dividends; Voting Rights; Interest Payments.
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a. Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall (unless such Event of Default is an Event of
Default specified in Section 11(f) of the Credit Agreement, in which
case no such notice need be given) have given notice to the Pledgor of
the Administrative Agent's intent to exercise its rights pursuant to
Section 7 below, the Pledgor shall be permitted to receive all cash
dividends paid in the normal course of business of the Issuer and
consistent with past practice to the extent permitted in the Credit
Agreement in respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock, provided,
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however, that no vote shall be cast or corporate right exercised or
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other action taken which, in the Administrative Agent's reasonable
judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement
or any of the other Loan Documents. For such purposes, the
Administrative Agent shall provide such stock proxies to the Pledgor as
may be required under applicable law to enable it, pursuant to the
requirements of such applicable law to exercise such voting and other
corporate rights in connection with the Pledged Stock as may be
permitted to be exercised by it under, and in a manner consistent with,
this Section.
b. Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall (unless such Event of Default is an Event of
Default specified in Section 11(f) of the Credit Agreement, in which
case no such notice need be given) have given notice to the Pledgor of
the Administrative Agent's intent to exercise its rights pursuant to
Section 7 below, the Pledgor shall have and may exercise all other
rights of ownership with respect to any additional Collateral paid
thereunder or in respect thereof; provided, however, that the foregoing
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provision shall not entitle the Pledgor to take any action in respect of
the Collateral paid thereunder or in respect thereof that would
otherwise be prohibited under the Loan Documents. For such purposes, the
Administrative Agent shall provide such stock proxies to the Pledgor as
may be required under applicable law to enable it, pursuant to the
requirements of such applicable law, to exercise such voting and other
corporate rights in connection with the Pledged Stock as may be
permitted to be exercised by it under, and in a manner consistent with,
this Section.
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c. Each request by the Pledgor to the Administrative Agent to deliver
stock proxies in accordance with this Section shall be accompanied by a
certificate of a Responsible Officer of the Pledgor to the effect that
such stock proxies are required under applicable law to enable it to
exercise its rights under this Section in respect of the Pledged Stock.
7. Rights of the Lenders and the Administrative Agent.
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a. If an Event of Default shall occur and be continuing and the
Administrative Agent shall (unless such Event of Default is an Event of
Default specified in Section 11(f) of the Credit Agreement, in which
case no such notice need be given) give notice of its intent to
exercise its rights hereunder to the Pledgor, (i) the Administrative
Agent shall have the right to receive any and all cash dividends paid
in respect of the Pledged Stock and make application thereof to the
Obligations in such order as the Administrative Agent may determine,
and (ii) the Administrative Agent or its nominee may thereafter
exercise (A) all voting, corporate and other rights pertaining to such
shares of the Pledged Stock at any meeting of shareholders of the
issuer or otherwise and (B) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options
pertaining to such shares of the Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Stock upon the
merger, consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of the issuer, or upon
the exercise by the Pledgor or the Administrative Agent of any right,
privilege or option pertaining to such shares of the Pledged Stock, and
in connection therewith, the right to deposit and deliver any and all
of the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as
it may determine), all without liability except to account for property
actually received by it and except for its gross negligence or willful
misconduct.
b. The rights of the Administrative Agent and the Lenders hereunder shall
not be conditioned or contingent upon the pursuit by the Administrative
Agent or any Lender of any right or remedy against the issuer or
against any other Person which may be or become
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liable in respect of all or any part of the Obligations or
against any collateral security therefor, guarantee therefor or
right of set-off with respect thereto. Neither the
Administrative Agent nor any Lender shall be liable for any
failure to demand, collect or realize upon all or any part of
the Collateral or for any delay in doing so, except to the
extent that such failure constitutes gross negligence or willful
misconduct, nor shall the Administrative Agent be under any
obligation to sell or otherwise dispose of any Collateral upon
the request of the Pledgor or any other Person or to take any
other request of the Pledgor or any other Person or to take any
other action whatsoever with regard to the Collateral or any
part thereof.
8. Remedies. In the event that any portion of the Obligations has
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been declared or becomes due and payable in accordance with the terms of the
Credit Agreement and such Obligations have not been paid in full, the
Administrative Agent, on behalf of the Lenders, may exercise, in addition to all
other rights and remedies granted in this Pledge Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party to the fullest extent permitted under
applicable law. Without limiting the generality of the foregoing, the
Administrative Agent, may in such circumstances, once all applicable legal
requirements have been complied with, forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof. The Administrative Agent, the Syndication
Agent, the Documentation Agent, or any Lender shall have the right upon any such
public sale or sales, and , to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Pledgor. The
Administrative Agent shall hold any Proceeds hereunder for the benefit of the
Lenders as collateral security for the Obligations (whether matured or
unmatured), and/or the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, may then or at any time thereafter, in the
sole discretion of the Administrative Agent, be applied by the Administrative
Agent against the Obligations then due and owing in the following order of
priority:
FIRST, to the payment of all reasonable costs and expenses of
every kind incurred by the Administrative Agent in connection with this
Pledge Agreement, any other Loan Document or any of the Obligations,
including, without limitation, (i) all costs incidental to the care or
safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Administrative Agent and the Lenders
hereunder, (ii) court costs, (iii) the reasonable fees and disbursements
of legal counsel and agents to the Administrative Agent, (iv) any other
reasonable costs or expenses incurred in connection with the exercise by
the Administrative Agent of any right or
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remedy under this Pledge Agreement or any other Loan Document and (v)
without duplication, any amounts which are required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, to be paid
by the Administrative Agent;
SECOND, to the ratable satisfaction of all other Obligations; and
THIRD, to the Pledgor or its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same.
To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Administrative Agent, the
Syndication Agent, the Documentation Agent or any Lender arising out of the
lawful exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such sale
or other disposition.
9. Registration Rights; Private Sales.
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a. If the Administrative Agent shall determine to exercise its right to
sell any or all of the Pledged Stock pursuant to Section 8 hereof, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the
Pledged Stock or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended (the "Securities Act"), the
Pledgor will cause the Issuer whose stocks are to be so registered to (i)
execute and deliver, and cause the directors and officers of the Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Pledged Stock or that portion thereof to be sold, and (iii) make
all amendments thereto and/or to the related prospectus that, in the opinion of
the Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. The
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Pledgor agrees to cause the Issuer to comply with the provisions of
the securities or "Blue Sky" laws of any and all state or foreign
jurisdictions that the Administrative Agent shall designate and to
make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) that will satisfy
the provisions of Section 11(a) of the Securities Act.
b. The Pledgor recognizes that the Administrative Agent may be unable
to effect a public sale of any or all the Pledged Stock by reason
of certain prohibitions contained in the Securities Act and
applicable state or foreign securities laws or otherwise, and may
be compelled to resort to one or more private sales thereof to
restricted group of purchasers that will be obliged to agree, among
other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale
thereof. The Pledgor acknowledges and agrees that any such private
sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale
of any of the Pledged Stock for the period of time necessary to
permit the Issuer to register such securities for public sale under
the Securities Act, or under applicable state or foreign securities
laws, even if the Issuer would agree to do so.
c. The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Pledged Stock pursuant
to this Section 9 valid and binding and in compliance with any and
all other applicable Requirements of Law. The Pledgor further
agrees that a breach of any of the covenants contained in this
Section 9 will cause irreparable injury to the Administrative Agent
and the Lenders, that the Administrative Agent and the Lenders have
no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section
9 shall be specifically enforceable against the Pledgor, and the
Pledgor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants.
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10. Limitation on Duties Regarding Collateral. The Administrative
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Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similiar securities and poerty for its own
account. None of the Administrative Agent, the Syndication Agent, the
Documentation Agent or any Lender or their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so (except to the extent
the same constitutes gross negligence or willful misconduct or otherwise
required under applicable law) or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgor or
otherwise.
11. Powers Coupled with an Interest. All authorizations and agencies
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herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
12. Severability. Any provision of this Pledge Agreement which is
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prohibited or unenforceable in any juridiction shall, as to such jurisdication,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other juridisction.
13. Section Headings. The Section headings used in this Pledge
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Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. No Waiver, Cumulative Remedies. None of the Administrative Agent,
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the Syndication Agent, the Documentation Agent or any Lender shall by any act
(except by a written instrument pursuant to Section 15 hereof) be deemed to have
waived any right or remedy hereunder. No failure to exercise, no any delay in
exercise, or any delay in exercising, on the part of the Administrative Agent or
any Lender any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
the Syndication Agnet, the Documentation Agent or any Lender or any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent, the Syndication Agent, the
Documentation Agent or such Lender would otherwise have on any future occasion.
The rights
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and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.
15. Waivers and Amendments; Successors and Assigns; Governing Law.
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None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent, provided that any provision of this
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Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Pledge Agreement shall be
binding upon the successors and assigns of the Pledgor and shall inure to the
benefit of the Administrative Agent, the Syndication Agent, the Documentation
Agent and the Lenders and their respective successors and assigns. THIS PLEDGE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IN CONNECTION
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WITH ANY ACTION OR PROCEEDING BROUGHT IN ANY COURT IN THE UNITED MEXICAN STATES,
THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE UNITED MEXICAN STATES.
16. Notices. Notices by the Administrative Agent the Pledgor, or the
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Issuer, may be given by mail, by telex or by facsimile transmission, addressed
or transmitted to such person at its address or transmission number set forth in
the Subsidiaries Guarantee or under its signature below, as the case may be, and
shall be effective (a) in the case of mail, three Business Days after deposit in
the postal system, first class postage pre-paid, and (b) in the case of telex or
facsimile notices, when sent, answerback received. The Pledgor and the Issuer
may change their respective addresses and transmission numbers by written notice
to the Administrative Agent.
17. Irrevocable Authorization and Instruction to Issuers. The Pledgor
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hereby authorizes and instructs the Issuer to comply with any instruction
received by it from the Administrative Agent in writing that (a) states that an
Event of Default has occurred and is continuing and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that the Issuer shall be
fully protected in so complying.
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18. Authority of Administrative Agent. The Pledgor acknowledges that
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the rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
neither the Pledgor nor the Issuer shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
19. Submission to Jurisdiction.
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a. The Pledgor consents and agrees that any suit, action or proceeding
with respect to this Pledge Agreement, may be brought in the courts
of the United Mexican States.
b. For everything related to the interpretation of, compliance with,
or judicial request for enforcement of this Pledge Agreement in the
United Mexican States, the Pledgor hereby irrevocably and expressly
submits to the jurisdiction of the competent courts of Mexico City,
Federal District, United Mexican States, therefore expressly
waiving any other jurisdiction it may be entitled to be reason of
its present or future domicile.
20. Integration. This Agreement and other Loan Documents represent the
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agreement of the Pledgor, the Administrative Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Loan Documents.
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IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement to
be duly executed and delivered as of the date first above written.
DAL-TILE GROUP INC.
By: /s/ Carlos E. Sele
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Title:
ACKNOWLEDGEMENT AND CONSENT
Each Issuer referred to in the foregoing Pledge Agreement hereby
acknowledges receipt of a copy hereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. Each
Issuer agrees to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. Each Issuer further (i) agrees that it will comply with the terms of
Section 5(b) of the pledge Agreement to the extent applicable to it and (ii)
agrees that the terms of Section 9(c) of the Pledge Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it under
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or pursuant to or arising out of Section 9 of the Pledge Agreement.
By: /s/ Carlos E. Sela
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Title:
SCHEDULE 1 TO
PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
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Stock Percentage
Class of Certificate No. of of Issued
Issuer Stock No. Shares Shares
- ------ -------- ----------- ------ ----------
Dal-Tile Mexico, S.A. de
C.V. Common 1 20,475,000 65%