EXHIBIT 10.4
BORROWER PLEDGE AGREEMENT
-------------------------
PLEDGE AGREEMENT dated as of August 14, 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") 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 ("Holdings"), the Administrative
--------
Agent, Credit Suisse, as Documentation Agent, Xxxxxxx Xxxxx Credit Partners
L.P., as Syndication Agent, and the Lenders.
W I T N E S S E T H :
- - - - - - - - - -
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 Persons named under the
caption "Issuer" on Schedule I hereto;
WHEREAS, pursuant to subsection 7.10 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 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:
1. Defined Terms. Unless otherwise defined herein, terms that are defined
-------------
in the Credit Agreement and used herein are so used as so defined; and the
following terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so defined:
Accounts, Chattel Paper, General Intangibles and Instruments; 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.
2
"Collateral": the collective reference to the Pledged Stock and all
----------
Proceeds thereof.
"Issuer": with respect to any Pledged Stock, the Issuers from time to time
------
listed on Schedule I hereto as the issuer of such Pledged Stock.
"Pledge Agreement": this Pledge Agreement, as amended, supplemented or
----------------
otherwise modified from time to time.
"Pledged Stock": all of the shares of capital stock of the Issuers listed
-------------
on Schedules I hereto and all the shares of capital stock of any other Material
Subsidiary of the Pledgor organized in the United States now owned or at any
time hereafter acquired by the Pledgor or in which the Pledgor now has or may
from time to time acquire any right, title or interest, together with all stock
certificates, options or rights of any nature whatsoever that may be issued or
granted by the Issuer thereof to the Pledgor while this Pledge Agreement is in
effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(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 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
----------------------------------
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
all of 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. Stock Powers; Endorsements. Concurrently with the delivery to the
--------------------------
Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by the Pledgor.
4. Representations and Warranties. The Pledgor represents and warrants
------------------------------
that:
(a) the shares of capital stock of each of the Issuers listed on Schedule
I hereto which are identified as Pledged Stock on said Schedule I constitute all
of the issued and outstanding shares of all classes of the capital stock of the
Issuers listed on Schedule I hereto which are owned by the Pledgor;
(b) all the shares of Pledged Stock have been duly and validly issued and
are fully paid and nonassessable;
3
(c) the Pledgor is the record and beneficial owner of, and has good title
to, the Collateral, free of any and all Liens or options in favor of, or claims
of, any other Person, except the Lien created by this Pledge Agreement;
(d) upon delivery to the Administrative Agent of the stock certificates
evidencing the Pledged Stock, the Lien granted pursuant to this Pledge 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. No security agreement, financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except (i) such as may have been filed in favor of
the Administrative Agent pursuant to this Agreement and (ii) such as may be
terminated upon filing of termination statements delivered to the Administrative
Agent at the Closing Date; 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 X.X. Xxxx Freeway, X.X. Xxx 00000, Xxxxxx, Xxxxx 00000, or
such other location as the Pledgor shall inform the Administrative Agent in
accordance with subsection 5(e).
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
---------
Agent and the Lenders, that, from and after the date of this Pledge Agreement
until the Obligations are paid in full, no Letters of Credit are outstanding or
not fully cash collateralized 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 reorganization),
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 trust
for the Administrative Agent and the Lenders and deliver the same forthwith to
the Administrative Agent in the exact form received, duly indorsed by the
Pledgor to the Administrative Agent, if required, together with an undated stock
power or endorsement, as appropriate, covering such certificate, note or
instrument duly
4
executed in blank by the Pledgor and with, if the Administrative Agent so
requests, signature guarantees, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Collateral upon the liquidation or
dissolution of any 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 of 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 such 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 trust
for the Lenders, segregated from other funds of the Pledgor, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent and
except as permitted by, or not prohibited under, the Credit Agreement, the
Pledgor will not (i) vote to enable, or take any other action to permit, any
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.
(c) At any time and from 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 a manner satisfactory to the Administrative Agent, 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.
5
(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, identity or structure to such an extent that any financing
statements filed by the Administrative Agent in connection with this Agreement
would become misleading.
6. Cash Dividends; Voting Rights; Interest Payments. (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
subsection 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 paragraph 7 below, the Pledgor shall be (i)
permitted to receive all cash dividends or distributions to the extent permitted
in the Credit Agreement in respect of the Pledged Stock and (ii) permitted to
exercise all voting, corporate, limited liability company and other rights of
ownership with respect to the Pledged Stock, provided, however, that no vote
-------- -------
shall be cast or corporate or limited liability company right exercised or 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.
(b) If 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 subsection 11(f) of the Credit Agreement, in which case no such
notice need be given) have given notice to the Pledgor of its intent to exercise
its rights pursuant to paragraph 7 below, (i) all dividends, interest payments
and other distributions (including cash) paid on or in respect of the Pledged
Stock shall be paid to and retained by the Administrative Agent as Collateral
hereunder (or if received by the Pledgor, shall be held in trust by the Pledgor
for the benefit of the Administrative Agent and the Lenders and shall be
forthwith delivered by it, and (ii) all voting, corporate, limited liability
company and other rights pertaining to the Pledged Stock, if any, shall be
exercised by the Administrative Agent.
7. Rights of the Lenders and the Administrative Agent. (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 subsection
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,
distributions and payments or other income paid in respect of the Collateral and
make application thereof to the Obligations in such order as the Administrative
Agent may determine and (ii) all shares of the Pledged Stock shall be registered
in the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (A) all voting, corporate, creditor
and other rights, powers and privileges pertaining to such Collateral at any
meeting of shareholders of any Issuer or otherwise, and (B) any and all rights
of conversion, exchange, subscription and any other rights, privileges or
options pertaining to the Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Collateral upon the merger,
6
consolidation, reorganization, recapitalization or other fundamental change in
the structure of any Issuer, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to the
Collateral, and in connection therewith, the right to deposit and deliver any
and all of the Collateral 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, but
the Administrative Agent shall have no duty to the Pledgor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(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 any Issuer or the Pledgor or against
any other Person which may be or become 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, 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 action whatsoever with regard to the Collateral or any part thereof.
8. Remedies. In the event that any portion of the Obligations has 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 under the Code. Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon the Pledgor, any Issuer or
any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances 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 (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, in the over-the-counter market, at any exchange or broker's board or
office of the Administrative Agent or any Lender or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. 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, which right or equity is hereby waived or released.
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,
7
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 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. (a) If the Administrative
----------------------------------
Agent shall determine to exercise its right to sell any or all of the Collateral
pursuant to paragraph 8 hereof, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Collateral, 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 each Issuer
--------------
whose stock or note or membership interest, as the case may be, is to be so
registered to (i) execute and deliver, and cause the directors and officers of
such Issuer or the Pledgor, as the case may be, 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 Collateral, 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 Collateral 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
8
thereto. The Pledgor agrees to cause each Issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all 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 Collateral by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a 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
Collateral for the period of time necessary to permit any Issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if such 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 Collateral pursuant to this paragraph 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 paragraph 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 paragraph 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.
10. Limitation on Duties Regarding Collateral. The Administrative
-----------------------------------------
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 similar securities and property 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 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
-------------------------------
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
9
12. Severability. Any provision of this Pledge Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
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 provision in any other jurisdiction.
13. Paragraph Headings. The paragraph headings used in this Pledge
------------------
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, the Syndication Agent, the Documentation Agent or any Lender shall by any
act (except by a written instrument pursuant to paragraph 15 hereof) be deemed
to have waived any right or remedy hereunder. No failure to exercise, nor 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 Agent, the Documentation Agent or any Lender of 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
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.
-------------------------------------------------------------
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
--------
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.
16. Notices. Notices by the Administrative Agent may be given by
-------
mail, by telex or by facsimile transmission, addressed or transmitted to the
Issuers at their addresses or transmission numbers set forth in Schedule IV
hereto and to the Pledgor at the address or transmission number set forth in
subsection 13.2 of the Credit Agreement. Such notice 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, addressed. The Pledgor and the Issuers may change
their respective addresses and transmission numbers by written notice to the
Administrative Agent.
10
17. Irrevocable Authorization and Instruction to Issuers. The
----------------------------------------------------
Pledgor hereby authorizes and instructs the Issuers 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
Issuers shall be fully protected in so complying.
18. Authority of Administrative Agent. The Pledgor acknowledges that
---------------------------------
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 Issuers shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
11
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/ Xxxxxx X. Xxxx
-----------------------------------------------
Title: Vice President and
Chief Financial Officer
ACKNOWLEDGEMENT AND CONSENT
The undersigned Issuers referred to in the foregoing Borrower Pledge
Agreement hereby acknowledge receipt of a copy thereof and agree to be bound
thereby and to comply with the terms thereof insofar as such terms are
applicable to it. The undersigned Issuers agree to notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
paragraph 5(a) of the Borrower Pledge Agreement. The undersigned Issuers
further agree that the terms of paragraph 9(c) of the Borrower Pledge Agreement
shall apply to them, mutatis mutandis, with respect to all actions that may be
------- --------
required of them under or pursuant to or arising out of paragraph 9 of the
Borrower Pledge Agreement.
DAL-TILE CORPORATION
By: /s/ Xxxxxx X. Xxxx
----------------------------------------------
Title: Executive Vice President,
Assistant Secretary and
Chief Financial Officer
SCHEDULE I
to Borrower
Pledge Agreement
----------------
DESCRIPTION OF PLEDGED STOCK (DOMESTIC SUBSIDIARIES)
----------------------------------------------------
Percentage of
Number of Outstanding
Class Stock Total No. of Shares Shares
of Certificate Outstanding Owned by Owned by
Issuer Stock No. Shares the Pledgor the Pledgor
--------------------------------------------------------------------------------------------
Dal-Tile Corporation Common 1 500 500 50%
Dal-Tile Corporation Common 2 500 500 50%
--------------------------------------------------------------------------------------------
SCHEDULE IV
To Borrower
Pledge Agreement
----------------
SCHEDULE OF ISSUERS
-------------------
Dal-Tile Corporation
7834 X.X. Xxxx Freeway
X.X. Xxx 00000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
Telecopy: (000) 000-0000
