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Exhibit 10(cxix)
PLEDGE AGREEMENT
(re: 66% of Plasticos SoTec S.A. de C.V.)
PLEDGE AGREEMENT (this "AGREEMENT") dated as of November 30,1995 between
HB/PS El Paso, Inc. a Delaware corporation (the "PLEDGOR") and THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION) (in such capacity, together with its
successors and assigns in such capacity, herein called the "PLEDGEE"), as agent
for the banks and other financial institutions party to the below-referenced
Credit Agreement (the "BANKS").
Hamilton Beach-Proctor-Silex, Inc., the other Obligors named therein,
the Banks named therein and the Pledgee, as U.S. Agent and the Canadian Agent
named therein are parties to an amended and restated Credit Agreement dated as
of October 11, 1990 amended and restated April 18, 1995 (as further modified and
supplemented and in effect from time to time, herein called the "CREDIT
AGREEMENT") providing for loans to be made by the Banks to the Pledgor and its
Wholly-Owned Subsidiary, Proctor-Silex Canada Inc. ("PSC") (or issuance of
letters of credit by the Issuing Bank for the account of the Pledgor) in an
aggregate principal (or face) amount not to exceed U.S. $135,000,000 (or a U.S.
Dollar Equivalent). Unless otherwise specified, capitalized terms defined in the
Credit Agreement shall have their defined meanings when used herein.
The Pledgor has agreed to pledge 6,666 Series "B" shares of common
stock, approximately 66% (the "REQUIRED Percentage") of the issued and
outstanding shares of capital stock of Plasticos SoTec S.A. de C.V. (SoTec), a
corporation duly organized and existing under the laws of the United Mexican
States ("Mexico") owned by the Pledgor on the Closing Date and the Required
Percentage of any issued and outstanding shares of capital stock of So Tec from
time to time thereafter issued by Proctor-Silex, S.A. de C.V. ("PSM") and
acquired by the Pledgor with the Pledgee hereunder for the benefit of the Banks
and the Issuing Bank.
As collateral security for the prompt payment in full by the Pledgor
when due (whether at stated maturity, by acceleration or otherwise) of (i) any
and all obligations of any Obligor in respect of the Loans or Letters of Credit
(including, without limitation, Letter of Credit Obligations) under Section 2 of
the Credit Agreement (except those obligations of the Pledgor arising under
Section 6.01 of the Credit Agreement with respect to Loans made to PSC), the
Notes, the Security Documents (including this Agreement), the Letter of Credit
Documents and any other note or notes from time to time evidencing such Loans or
such Letter of Credit Obligations, (ii) any and all other amounts (except with
respect to those obligations of the Pledgor arising under Section
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6.01 of the Credit Agreement with respect to Loans made to PSC) from time to
time payable by any Obligor to the Banks, the Issuing Bank or either Agent under
the Credit Agreement, the Security Documents (including this Agreement), the
Supplemental of Security Documents, the Letter of Credit Documents or the Notes,
(iii) any and all obligations of the Pledgor in respect of Bank Financial
Accommodations (including, without limitation, Bank Letter of Credit
Obligations) and (iv) any and all other amounts form time to time payable by the
Pledgor in to any Bank under the Bank Financial Accommodations Documents (the
obligations referred to in clauses (i), (ii), (iii) and (iv) above herein called
collectively, the "OBLIGATIONS"), the Pledgor hereby pledges to the Pledgee and
grants to the Pledgee a security interest in, for the equal and ratable benefit
of the Banks and the Issuing Bank, (a) (i) the Required Percentage of all of the
shares of issued and outstanding capital stock of So Tec on the Closing Date and
(ii) the Required Percentage of all other issued and outstanding shares of
capital stock of So Tec from time to time thereafter issued by SoTec acquired by
the Pledgor, together with the certificates evidencing the same (such shares of
capital stock from time to time pledged hereunder herein called the "PLEDGED
SHARES"), (b) all dividends, distributions and other amounts payable under or in
respect of the Pledged Shares and (c) the proceeds of the foregoing (the items
described in clauses (a) through (c) and any other property or assets from time
to time pledged to the Pledgee as collateral security hereunder, other than cash
hereafter paid to or retained by the Pledgee under A(2) and A(4), being herein
collectively called the "SECURITY"); and the Pledgor shall concurrently deliver
the Pledged Shares (in the amount and at the time required) against a receipt in
the form of Exhibit A hereto to the Pledgee for the purposes aforesaid, and
deliver to the Pledgee, in form transferable by delivery, the certificates
representing the Pledged Shares according to applicable Mexican law. In
furtherance thereof, the parties hereto agree as follows:
A. Transfer, Voting Power, Dividends, etc.
(1) If an Event of Default shall occur and be continuing (or if the
Pledgee is required to do so by any bank regulatory authority or
otherwise), to the extent the Security is not already held in nominee
name the Pledgee may have any of the Security registered in its name
or in the name of its nominee. Such Security as so registered shall
remain subject to this Agreement.
(2) Unless and until an Event of Default shall occur and be continuing
(the period during which any Event of Default shall so continue being
herein called a "DEFAULT PERIOD") and, in the case of clause (a)
below, the Pledgee shall have notified the Pledgor and SoTec that an
Event of Default has occurred and of its elections to exercise its
rights under A(3)(a):
(a) The Pledgor shall be entitled to exercise all powers of voting
and/or consent pertaining to the Security owned by it or any
part thereof, for all purposes not inconsistent with the terms
of this Agreement or the Credit Agreement.
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(b) The Pledgor shall be entitled to receive and retain any
dividends on shares included in the Security which are legally
payable. All other payments, distributions and/or dividends,
in securities, property or cash, including without limitation,
dividends representing stock or liquidating dividends or a
distribution or return of capital upon or in respect of the
Security or any part thereof or resulting from a split-up,
revision or reclassification of the Security or any part
thereof or received in exchange for the Security or any part
thereof as a result of a merger, consolidation or otherwise,
shall be paid or delivered directly to the Pledgee immediately
upon receipt thereof by the Pledgor according to applicable
Mexican law, and/or shall be retained by the Pledgee as part
of the Security.
(c) In case any money shall be paid to the Pledgor on account of
any dividend or other distribution upon or in respect of the
Security or any part thereof, other than a payment which the
Pledgor is entitled to receive and retain under clause (b)
above, such money shall be immediately paid to the Pledgee and
upon receipt by the Pledgee shall, if requested by the
Pledgor, be applied by the Pledgee (prior to any sale of the
Security thereunder) to the payment of the Obligations in
accordance with C(2).
(d) In order to permit the Pledgor to exercise such powers of
voting and/or consent under clause (a) above, the Pledgee
shall, if necessary, upon the written request of the Pledgor,
from time to time execute and deliver to the Pledgor
appropriate proxies in accordance with Article 192 of the "LEY
GENERAL DE SOCIEDADES MERCANTILES" and Article Seventeen,
Paragraph (f) of the "ESTATUTOS" of PSM.
(e) In order to permit the Pledgee to receive all payments and
distributions to which it may be entitled under clauses (b)
and (c) above, the Pledgor shall, if necessary, upon the
written request of the Pledgee, from time to time execute and
deliver to the Pledgee appropriate dividend or payment orders.
(3) During any Default Period:
(a) If the Pledgee so notifies the Pledgor, the Pledgee or its
nominee or nominees shall have the sole and exclusive right to
exercise all powers of voting and/or consent pertaining to the
Security or any part thereof.
(b) All payments and other distributions made upon or in respect
of the Security or any part thereof shall be paid directly to
and shall be retained by the Pledgee and held by it as stated
in subsection (4) immediately below.
(4) All cash and other property paid to and/or retained by the Pledgee
pursuant to this A shall be held by it for the benefit of the Banks,
until applied as herein provided, as additional collateral security
pledged under and subject to the terms of this A.
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B. REMEDIES.
(1) REALIZATIONS, ETC. If an Event of Default shall occur and be
continuing, in addition to any rights and remedies which may be
available to a secured party under the Uniform Commercial Code as in
effect at the time in New York, the following provisions shall apply:
(a) The Pledgee may, without being required to give any notice
except as hereinafter provided, apply the cash, if any, then
held by it as collateral security hereunder to the payment of
the Obligations and, if there shall be no such cash or the
cash so applied shall be insufficient to pay in full all such
Obligations, sell the Security, or any part thereof, at public
or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery, and at
such price or prices as the Pledgee may deem satisfactory, and
the Pledgee or any Bank may be the purchaser of any or all of
the Security so sold and thereafter hold the same absolutely,
free from any right or claim of whatsoever kind.
(b) The Pledgee is authorized, at any such sale, if it deems it
advisable so to do, to restrict the prospective bidders or
purchasers to persons who will represent and agree that they
are purchasing for their own account, for investment, and not
with a view to the distribution or sale of any of the
Security.
(c) Upon any such sale the Pledgee shall have the right to
deliver, assign and transfer to the purchaser thereof the
Security so sold. As permitted at law or in equity, each
purchaser (including the Pledgee, any of the Banks and any
other holder of any of the Notes) at any such sale shall hold
the property sold absolutely, free from any claim or right of
whatsoever kind, including any equity or rights of redemption,
of the Pledgor, who hereby specifically waives as against any
such purchaser all rights of redemption, stay or appraisal
which it has or may have under any rule of law or statute now
existing or hereafter adopted.
(d) The Pledgee shall give the Pledgor at least 10 days written
notice by mail and telegram (or by hand delivery) of intention
to make any such public or private sale or sale at broker's
board or on a securities exchange, which notice shall specify,
to the extent known by the Pledgee, the terms of sale
intended. Such notice, in case of public sale, shall state the
time and place fixed for the sale, such sale, and, in case of
sale at broker's board or on a securities exchange, shall
state the board or exchange at which such sale is to be made
and the day on which the Security, or that portion thereof so
being sold, will first be offered for sale at such board or
exchange.
(e) Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places in
the Borough of Manhattan,
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City of New York, Mexico D. F., Mexico or elsewhere in the
United States or Mexico, as the Pledgee may fix in the
notice of such sale. At any such sale the Security may be
sold in one lot as an entirety or in separate parcels, as
the Pledgee may determine.
(f) The Pledgee shall not be obligated to make any sale pursuant
to any such notice. The Pledgee may, without notice or
publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made
at any time or place to which the same may be so adjourned.
(g) In case of any sale of all or any part of the Security for
future delivery, the Security so sold must be retained by the
Pledgee until the selling price is paid by the purchaser
thereof, but the Pledgee shall not incur any liability in case
of the failure of such purchaser to take up and pay for the
Security so sold and, in case of any such failure, such
Security may again be sold upon like notice.
(h) The Pledgee, however, instead of, or in addition to,
exercising the power of sale herein conferred upon it, may
proceed by a suit or suits at law or in equity to foreclose
the pledge and sell the Security, or any portion thereof,
under a judgment or decree of a court or courts of competent
jurisdiction.
(2) Notwithstanding the foregoing, if any Event of Default shall occur and
be continuing and the Pledgee proceeds to sell, assign, transfer or
otherwise convey the Security, or any part thereof, such sale,
assignment, transfer or conveyance shall be subject to the provisions
of the "LEY GENERAL DE TITULOS Y OPERACIONES DE CREDITO" as applicable
from time to time.
C. GENERAL PROVISIONS. The following general provisions shall apply to the
Security and this Agreement generally:
(1) PRIVATE SALE. The Pledgee shall incur no liability as a result of the
sale of the Security, or any part thereof, at any private sale
permitted by this Agreement or under applicable law, provided that the
Pledgee shall act in a commercially reasonable manner within the
intendment of the Uniform Commercial Code. The Pledgor hereby waives,
to the fullest extent permitted by law, any claims against the Pledgee
or the Banks arising by reason of the fact that the price at which any
security may have been sold at such a private sale was less than the
price which might have been obtained at a public sale or was less than
the aggregate amount of the Obligations, even if the Pledgee accepts
the first offer received and does not offer such Security to more than
one offeree.
(2) APPLICATION OF PROCEEDS. The proceeds of any sale of all or any part
of the Security, and any other cash at the time held by the Pledgee
under this Agreement, shall be applied by the Pledgee:
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FIRST, to the payment of the costs and expenses of such sale,
including reasonable compensation to the Pledgee and its agents and
counsel, and all expenses, liabilities and advances made or incurred
by the Pledgee in connection therewith.
NEXT, to the payment of the Obligations ratably according to the
respective amounts (which in the case of Obligations other than the
Loans or the Notes shall mean the amount due to a Bank or an Agent on
the date of distribution) of such Obligations.
FINALLY, after payment in full of all Obligations, the payment to the
Pledgor, or its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such
proceeds.
As used in this Agreement, "PROCEEDS" of the Security shall mean cash,
securities and other property realized in respect of, and
distributions in kind of, the Security, including any thereof received
under any reorganization, liquidation or adjustment of debt of the
Pledgor or any issuer of securities included in the Security.
(3) ATTORNEY-IN-FACT. The Pledgee is hereby appointed the attorney-in-fact
of the Pledgor (effective upon notice by the Pledgee to the Pledgor)
(i) for any period not serving an Event of Default (SPECIAL DEFAULT
PERIOD), for the purpose of signing documents and taking other action
to perfect, promote and protect its security interest in the Security
consistent with the terms of this Agreement and (ii) during a Special
Default Period, for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instruments which
the Pledgee may reasonably deem necessary or advisable to accomplish
the purposes hereof, which appointment as attorney-in-fact is
irrevocable and couple with an interest. Without limiting the
generality of the foregoing, during a Special Default Period, the
Pledgee shall have the right and power to receive, endorse and collect
all checks made payable to the order of the Pledgor representing any
payment in respect of the Security or any part thereof and to give
full discharge for the same.
(4) REPRESENTATIONS, WARRANTIES AND COVENANTS. The Pledgor hereby
represents and warrants to each Bank and the Pledgee that: (a) the
Pledgor has full power, authority and legal right and capacity to
incur and perform its obligations hereunder, (b) this Agreement
constitutes the legal, valid and binding obligation of the Pledgor,
enforceable in accordance with its terms, (c) the making and
performance by the Pledgor of this Agreement and the pledge of the
Security hereunder have been duly authorized by all necessary
corporate action, and do not and will not violate the provisions of
any applicable law or applicable regulation, the Pledgor's or any of
its Subsidiary's articles of incorporation or by-
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laws and do not and will not result in a breach of, or constitute a
default under, or require any consent (other than consents which have
been obtained which are in full force and effect and copies of which
have been delivered to the Banks and the Pledgee) or create any lien,
charge or encumbrance under, any agreement, instrument or document or
the provisions of any order, writ, judgment, injunction, decree,
determination or award of any court, government or governmental agency
or instrumentality, applicable to the Pledgor or to any of the assets
of the Pledgor to which the Pledgor is a party or by which the Pledgor
or any of the assets of the Pledgor may be bound or affected, (d) so
long as the Obligations remain outstanding, the Pledgor at all times
will be the sole direct or indirect beneficial owner of the Security
pledged by it or to be pledged by it hereunder, and (e) this Agreement
grants to the Pledgee a first priority lien upon and first priority
perfected security interest in the Security from time to time in the
Pledgee's possession hereunder subject to no other lien or security
interest.
(5) NO WAIVER. No failure on the part of the Pledgee to exercise, and no
course of dealing with respect to, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise by the Pledgee of any right,
power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
(6) TERMINATION; RELEASE OF SECURITY, ETC. When all Obligations shall have
been paid in full, and the Commitments shall have been terminated and
all Letters of Credit shall have expired or terminated, this Agreement
shall terminate, and the Pledgee shall forthwith assign, transfer and
deliver, against receipt, any remaining Security and money received in
respect thereof, to or on the order of the Pledgor. Except during the
occurrence and continuance of an Event of Default, Security shall be
released to the Pledgor in conjunction with a transaction permitted by
Section 9.13 of the Credit Agreement and otherwise upon the written
consent of the Banks. The Pledgee shall execute and deliver to the
Pledgor such UCC-3 termination statements or other instruments
reasonably requested and prepared by the Pledgor in form and substance
satisfactory to the Pledgee to effect the foregoing.
(7) EXPENSES. The Pledgor shall pay to the Pledgee all reasonable costs
and expenses (including reasonable expenses for legal services of
every kind) of, or incident to, the enforcement of any of the
provisions of this Agreement, or the performance by the Pledgee of any
obligations of the Pledgor in respect of the Security which the
Pledgor has failed or refused to perform, or any actual or attempted
sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Security, and for the care of the
Security and defending or asserting rights and claims of the Pledgee
in respect thereof, by litigation or otherwise, including expenses of
insurance; and all such expenses shall be Obligations to the Pledgee
secured under this Agreement.
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(8) FURTHER ASSURANCES. The Pledgor agrees that, from time to time upon
the written request of the Pledgee, it will execute and deliver such
further documents and do such other acts and things as the Pledgee may
reasonably request in order fully to effect the purposes of this
Agreement.
(9) DEFICIENCY. If the proceeds of sale, collection or other realization
of or upon the Security are insufficient to cover the costs and
expenses of such realization and the payment in full of the
Obligations, the Obligors shall remain liable for any deficiency in
accordance with the Credit Agreement. The liability of the Pledgor
with respect to the payment of the Obligations as the same relate to
any person other than the Pledgor shall be limited to the Security and
all proceeds of any sale (including any foreclosure sale or any other
realization upon the Security) or other disposition of the Security;
provided, however, that the Pledgor will be liable for (and the
Pledgee will have full recourse against the Pledgor and all of its
property and assets for) the payment of Obligations of the Pledgor
under this Agreement and any other Majority Interest Document to which
the Pledgor is a party.
(10) UCC. Unless the context otherwise requires, terms used in this
Agreement which are defined in the Uniform Commercial Code shall have
such defined meanings in this Agreement.
(11) NOTICES. All notices and other communications provided for herein
(including, without limitation, any waivers or consents under this
Agreement) shall be given or made by telex, telecopy, telegraph, cable
or otherwise in writing (each communication given by any of such means
to be deemed to be "in writing" for purposes of this Agreement) and
telexed, telecopied, telegraphed, cabled, mailed or delivered to the
intended recipient at the "Address for Notices" specified below its
name on the signature pages hereof, or, as to any party in a notice to
the address as shall be designated by such party in a notice to the
Pledgee and the Pledgor. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly
given when transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as
aforesaid.
(12) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors
and assigns, except that the Pledgor may not assign or transfer any of
its rights or obligations hereunder without the prior written consent
of the Pledgee.
(13) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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(14) AMENDMENT, ETC. This Agreement may not be amended, modified or waived
except with the written consent of the Pledgor, the Pledgee and the
Majority Banks, provided that the provisions of B(2)(c), C(2) and
C(6) hereof and this C (14) may be amended, modified or waived, and
Security may be released other than as otherwise permitted under C(6)
hereof, only with the written consent of the Pledgor, and the Pledgee
and each Bank.
(15) COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, all of which taken together will constitute
one agreement, and any one of the parties hereto may execute this
Agreement by signing any such counterpart.
(16) HEADINGS. Section and subsection headings used herein have been
inserted for convenience of reference only and do not constitute
matters to be considered in interpreting this Agreement.
(17) THE PLEDGEE. The Pledgee has been appointed as agent hereunder by the
Banks, and shall be entitled to the benefits of Section 11 of the
Credit Agreement. The Pledgee shall act or be required to act only in
accordance with this Agreement and Section 11 of the Credit Agreement.
(18) APPROVALS. Any provision contained herein to the contrary
notwithstanding, no action shall be taken hereunder by the Pledgee
with respect to any Pledged Shares unless and until all applicable
requirements (if any, as determined by the rules and regulations
thereunder and thereof, as well as any other laws, rules and
regulations or other regulatory or governmental bodies applicable to,
or having jurisdiction over, PSC (if any, as determined by the
Pledgee) have been satisfied with respect to such action and there
have been obtained such consents, approvals and authorizations (if
any, as determined by the Pledgee) as may be required to be obtained
under any thereof. It is the intention of the parties hereto that the
Pledged Shares shall in all relevant aspects be subject to, and
governed by, said applicable statutes, rules and regulations. The
Pledgor agrees that upon request from time to time by the Pledgee it
will, and will cause PSC to, use its best efforts to obtain any
governmental, regulatory or other consents, approvals or
authorizations referred to in this C(18).
(19) WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE PLEDGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION
WITH THE AGREEMENT OR ANY OTHER DOCUMENT TO WHICH THE PARTIES HERETO
ARE A PARTY OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
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HB/PS El Paso, INC
By /s/ James H. Taylor
-----------------------------------
Vice President - Treasurer
Address for Notices;
Hamilton Beach/Proctor-Silex, Inc.
4421 Waterfront Drive
Glen Allen, VA 23060
Facsimile No.: (804) 527-7357
Telephone No.: (804) 273-9777
Attention; James H. Taylor
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as U.S. Agent
By /s/ Carol A. Ulmer
-----------------------------------
Address for Notices:
The Chase Manhattan Bank
(National Association),
as U.S. Agent
4 Chase Metrotech Center - 13th Floor
Brooklyn, New York 11245
Facsimile No.: (718) 242-6909
Telephone No.: (718) 242-7969
Attention: Christine Gould
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With a copy to:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
Diversified Industries Dept, Fifth Floor
New York, New York 10081
Facsimile No.: (212) 552-4112
Telephone No.: (212) 552-7075
Attention: Carol Ulmer