EXHIBIT 10.5
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (this “Agreement”), dated as of July 31, 2008 among LV ADMINISTRATIVE SERVICES INC., as administrative and collateral agent for the Creditor Parties (as defined below) (the “Pledgee”), MICRO COMPONENT TECHNOLOGY, INC., a Minnesota company (the “Company”), and each of the other undersigned parties (the Company and each such other undersigned party, a “Pledgor” and collectively, the “Pledgors”).
BACKGROUND
The Company has entered into a Securities Purchase Agreement, dated as of the date hereof (as amended, modified, restated or supplemented from time to time, the “Securities Purchase Agreement”), pursuant to which the Pledgee and the other Creditor Parties (as defined in the Securities Purchase Agreement) party thereto provide or will provide certain financial accommodations to the Company and certain subsidiaries of the Company.
In order to induce the Pledgee and the other Creditor Parties to provide or continue to provide the financial accommodations described in the Securities Purchase Agreement, each Pledgor has agreed to pledge and grant a security interest in the collateral described herein to the Pledgee on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows:
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hypothecates, transfers and grants a security interest to the Pledgee, for the ratable benefit of the Creditor Parties, in all of the following (the “Collateral”): the shares of stock or other equity interests set forth on Schedule A annexed hereto and expressly made a part hereof (together with any additional shares of stock or other equity interests acquired by any Pledgor, the “Pledged Stock”), the certificates representing the Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Stock; all additional shares of stock or other equity interests of any issuer (each, an “Issuer”) of the Pledged Stock from time to time acquired by any Pledgor in any manner, including, without limitation, stock dividends or a distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares, stock split, spin-off or split-off (which shares shall be deemed to be part of the Collateral), and the certificates representing such additional shares, and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares; and all options and rights, whether as an addition to, in substitution of or in exchange for any shares of any Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all such options and rights.
Representations and Warranties of each Pledgor. Each Pledgor jointly and severally represents and warrants to the Pledgee (which representations and warranties shall be deemed to continue to be made until all of the Obligations have been paid in full in cash and each Document and each agreement and instrument entered into in connection therewith has been irrevocably terminated) that: the execution, delivery and performance by each Pledgor of this Agreement and the pledge of the Collateral hereunder do not and will not result in any violation of any agreement, indenture, instrument, license, judgment, decree, order, law, statute, ordinance or other governmental rule or regulation applicable to any Pledgor; this Agreement constitutes the legal, valid, and binding obligation of each Pledgor enforceable against each Pledgor in accordance with its terms; (i) all Pledged Stock owned by each Pledgor is set forth on Schedule A hereto and (ii) each Pledgor is the direct and beneficial owner of each share of the Pledged Stock;
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all of the shares of the Pledged Stock have been duly authorized, validly issued and are fully paid and non-assessable; no consent or approval of any person, corporation, governmental body, regulatory authority or other entity, is or will be necessary for (i) the execution, delivery and performance of this Agreement, (ii) the exercise by the Pledgee of any rights with respect to the Collateral or (iii) the pledge and assignment of, and the grant of a security interest in, the Collateral hereunder; there are no pending or, to the best of Pledgor’s knowledge, threatened actions or proceedings before any court, judicial body, administrative agency or arbitrator which may materially adversely affect the Collateral; each Pledgor has the requisite power and authority to enter into this Agreement and to pledge and assign the Collateral to the Pledgee, for the ratable benefit of the Creditor Parties, in accordance with the terms of this Agreement; each Pledgor owns each item of the Collateral and, except for the pledge and security interest granted to the Pledgee hereunder, the Collateral shall be, immediately following the closing of the transactions contemplated by the Documents, free and clear of any other security interest, mortgage, pledge, claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever (collectively, “Liens”); there are no restrictions on transfer of the Pledged Stock contained in the certificate of incorporation or by-laws (or equivalent organizational documents) of the Issuer or otherwise which have not otherwise been enforceably and legally waived by the necessary parties; none of the Pledged Stock has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject; the pledge and assignment of the Collateral and the grant of a security interest under this Agreement vest in the Pledgee, for the ratable benefit of the Creditor Parties, all rights of each Pledgor in the Collateral as contemplated by this Agreement; and except as noted on Schedule A, the Pledged Stock constitutes one hundred percent (100%) of the issued and outstanding shares of capital stock of each Issuer.
Covenants. Each Pledgor jointly and severally covenants that, until the Obligations shall be indefeasibly satisfied in full in cash and each Document and each agreement and instrument entered into in connection therewith is irrevocably terminated: No Pledgor will sell, assign, transfer, convey, or otherwise dispose of its rights in or to the Collateral or any interest therein; nor will any Pledgor create, incur or permit to exist any Lien whatsoever with respect to any of the Collateral or the proceeds thereof other than that created hereby. Each Pledgor will, at its expense, defend the Pledgee’s right, title and security interest in and to the Collateral against the claims of any other party. Each Pledgor shall at any time, and from time to time, upon the written request of the Pledgee, execute and deliver such further documents and do such further acts and things as the Pledgee may reasonably request in order to effectuate the purposes of this Agreement including, but without limitation, delivering to the Pledgee, upon the occurrence of an Event of Default, irrevocable proxies in respect of the Collateral in form satisfactory to the Pledgee. Until receipt thereof, upon an Event of Default that has occurred and is continuing beyond any applicable grace period, this Agreement shall constitute the Pledgor’s proxy to the Pledgee or its nominee to vote all shares of Collateral then registered in each Pledgor’s name.
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No Pledgor will consent to or approve the issuance of (i) any additional shares of any class of capital stock or other equity interests of the Issuer; or (ii) any securities convertible either voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition into, or any securities exchangeable for, any such shares, unless, in either case, such shares are pledged as Collateral pursuant to this Agreement. Each Pledgor agrees to execute and deliver to each Issuer that is a limited liability company or a limited partnership a control acknowledgment (“Control Acknowledgement”) substantially in the form of Exhibit A hereto. Each Pledgor shall cause each such Issuer to acknowledge in writing its receipt and acceptance thereof. Such Control Acknowledgement shall instruct such Issuer to follow instructions from the Pledgee without any Pledgor’s consultation or consent.
Event of Default. An “Event of Default” under this Agreement shall occur upon the happening of any of the following events: An “Event of Default” under any Document or any agreement or note related to any Document shall have occurred and be continuing beyond any applicable cure period; Any Pledgor shall default in the performance of any of its obligations under any Document, including, without limitation, this Agreement, and such default shall not be cured during the cure period applicable thereto; Any representation or warranty of any Pledgor made herein, in any Document or in any agreement, statement or certificate given in writing pursuant hereto or thereto or in connection herewith or therewith shall be false or misleading in any material respect; Any portion of the Collateral is subjected to a levy of execution, attachment, distraint or other judicial process or any portion of the Collateral is the subject of a claim (other than by the Pledgee) of a Lien or other right or interest in or to the Collateral and such levy or claim shall not
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be cured, disputed or stayed within a period of fifteen (15) business days after the occurrence thereof; or Any Pledgor shall (i) apply for, consent to, or suffer to exist the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or other fiduciary of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within thirty (30) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing.
Remedies. In case an Event of Default shall have occurred and is continuing, the Pledgee may: Transfer any or all of the Collateral into its name, or into the name of its nominee or nominees; Exercise all corporate rights with respect to the Collateral including, without limitation, all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any shares of the Collateral as if it were the absolute owner thereof, including, but without limitation, the right to exchange, at its discretion, any or all of the Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Issuer thereof, or upon the exercise by the Issuer of any right, privilege or option pertaining to any of the Collateral, and, in connection therewith, to deposit and deliver any and all of the Collateral with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as it may determine, all without liability except to account for property actually received by it; and Subject to any requirement of applicable law, sell, assign and deliver the whole or, from time to time, any part of the Collateral at the time held by the Pledgee, at any private sale or at public auction, with or without demand, advertisement or notice of the time or place of sale or adjournment thereof or otherwise (all of which are hereby waived, except such notice as is required by applicable law and cannot be waived), for cash or credit or for other property for immediate or future delivery, and for such price or prices and on such terms as the Pledgee in its sole discretion may determine, or as may be required by applicable law.
Each Pledgor hereby waives and releases any and all right or equity of redemption, whether before or after sale hereunder. At any such sale, unless prohibited by applicable law, the Pledgee may bid for and purchase the whole or any part of the Collateral so sold free from any such right or equity of redemption. All moneys received by the Pledgee hereunder, whether upon sale of the Collateral or any part thereof or otherwise, shall be held by the Pledgee and applied by it as provided in Section 10 hereof. No failure or delay on the part of the Pledgee in exercising any rights hereunder shall operate as a waiver of any such rights nor shall any single or partial exercise of any such rights preclude any other or future exercise thereof or the exercise of any other rights hereunder. The Pledgee shall have no duty as to the collection or protection of the Collateral or any income thereon nor any duty as to preservation of any rights pertaining thereto, except to apply the funds in accordance with the requirements of Section 10 hereof. The Pledgee may exercise its rights with respect to property held hereunder without resort to other security for or sources of reimbursement for the Obligations. In addition to the foregoing, Pledgee shall have all of the rights, remedies and privileges of a secured party under the Uniform Commercial Code of New York (the “UCC”) regardless of the jurisdiction in which enforcement hereof is sought.
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Second, to the payment of the Obligations, in whole or in part, in such order as the Pledgee may elect, whether or not such Obligations are then due; Third, to such persons, firms, corporations or other entities as required by applicable law including, without limitation, Section 9-615(a)(3) of the UCC; and Fourth, to the extent of any surplus to the Pledgors or as a court of competent jurisdiction may direct.
In the event that the proceeds of any collection, recovery, receipt, appropriation, realization or sale are insufficient to satisfy the Obligations, each Pledgor shall be jointly and severally liable for the deficiency plus the costs and fees of any attorneys employed by the Pledgee to collect such deficiency.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above.
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MICRO COMPONENT TECHNOLOGY, INC. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Chief Executive Officer |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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MCT INTERNATIONAL, INC. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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MCT ASIA PTE. LTD. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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MCT ASIA (PENANG) SDN. BHD. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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MCT PHILIPPINES. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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BEIJING MCT CO. LTD. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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MCT (HONG KONG) LIMITED. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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ASECO (MALAYSIA) SDN. BHD. |
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By: |
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Name: |
Roger E. Gower |
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Title: |
Director |
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Address: |
c/o Micro Component Technologies, Inc. |
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2340 West County Road C |
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St. Paul, Minnesota 55113-2528 |
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Facsimile: (651) 697-4200 |
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LV ADMINISTRATIVE SERVICES INC., |
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as Agent |
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SCHEDULE A
Pledged Stock
Pledgor |
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Issuer |
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Class of |
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Stock |
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Par Value |
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Number of |
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% of |
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Micro Component Technology, Inc. |
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MCT International, Inc. |
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Common Stock |
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2 |
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$ |
.01 |
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1,000 |
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100 |
% |
MCT
International, |
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MCT Asia |
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Capital Stock |
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5-8 |
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$ |
1.00 |
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2,587,255 |
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100 |
% |
MCT
International, |
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MCT Asia (Penang) Sdn. Bhd. |
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Common Stock |
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Unknown |
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$ |
1.00 |
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25,000 |
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100 |
% |
MCT
International, |
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MCT Philippines |
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Capital Stock |
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Unknown |
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$ |
Php100.00 |
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99,995 |
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95 |
% |
MCT
International, |
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Beijing MCT Co. Ltd. |
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Interests |
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N/A |
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N/A |
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85% Interests |
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85 |
% |
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MCT
International, |
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MCT (Hong Kong) |
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Undesignated |
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7 |
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$ |
1.00 |
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779,999 |
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99.9 |
% |
MCT
International, |
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Aseco (Malaysia) Sdn. Bhd. |
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Unknown |
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Unknown |
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Unknown |
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Unknown |
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100 |
% |
EXHIBIT A
FORM OF CONTROL ACKNOWLEDGMENT
Reference is hereby made to that certain Stock Pledge Agreement, dated as of July 31, 2008 (as amended, restated, modified and/or supplemented from time to time, the “Pledge Agreement”), between Micro Component Technologies, Inc. (the “Pledgor”), the member of , a [limited liability company] [limited partnership] (the “Issuer”), and LV Administrative Services Inc., as administrative and collateral agent for the Creditor Parties (as defined therein) (the “Agent”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Pledge Agreement.
The Issuer is hereby instructed by the Pledgor that all of the Pledgor’s right, title and interest in and to all of the Pledgor’s rights in connection with any [membership] [partnership] interests in the Issuer now and hereafter owned by the Pledgor are subject to a pledge and security interest in favor of the Agent, for the ratable benefit of the Creditor Parties. The Pledgor hereby instructs the Issuer to act upon any instruction delivered to it by the Agent with respect to the Collateral without seeking further instruction from the Pledgor, and, by its execution hereof, the Issuer hereby agrees to do so.
The Issuer, by its written acknowledgment and acceptance hereof, hereby acknowledges receipt of a copy of the Pledge Agreement and agrees promptly to note on its books the security interest granted under the Pledge Agreement. The Issuer also waives any rights or requirements at any time hereafter to receive a copy of the Pledge Agreement in connection with the registration of any Collateral in the name of the Agent or its nominee or the exercise of voting rights by the Agent or its nominee.
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IN WITNESS WHEREOF, the Pledgor has caused this Control Acknowledgment to be duly signed and delivered by its officer duly authorized as of this day of 200 .
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[PLEDGOR] |
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Acknowledged
and accepted this
day of
200 .
[ISSUER]
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