EXHIBIT 10.8
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT ("Pledge Agreement") is made by _________ ,
an individual with a residence at __________________ ("Pledgor"), in favor of
PETsMART, INC., a Delaware corporation with its principal place of business at
00000 Xxxxx 00xx Xxxxxx, Xxxxxxx Xxxxxxx, 00000 ("Pledgee").
WHEREAS, Pledgor has concurrently herewith executed that certain
Promissory Note (the "Note") in favor of Pledgee in the amount of
_________________ Dollars ($_____________); and
WHEREAS, Pledgee is willing to accept the Note from Pledgor, but only
upon the condition, among others, that Pledgor shall have executed and delivered
to Pledgee this Pledge Agreement and the Collateral (as defined below):
NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, Pledgor hereby agrees as
follows:
1. As security for the full, prompt and complete payment and
performance when due (whether by stated maturity, by acceleration or otherwise)
of all indebtedness of Pledgor to Pledgee created under the Note (all such
indebtedness being the "Liabilities"), together with, without limitation, the
prompt payment of all expenses, including, without limitation, reasonable
attorneys' fees and legal expenses, incidental to the collection of the
Liabilities and the enforcement or protection of Pledgee's lien in and to the
collateral pledged hereunder, Pledgor hereby pledges to Pledgee, and grants to
Pledgee, a first priority security interest in the following (collectively, the
"Pledged Collateral"):
_________________ (_______) shares of Common Stock of the Company
purchased on the open market with the proceeds of the Note (the "Pledged
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 the Pledged Shares;
The term "indebtedness" is used herein in its most comprehensive sense
and includes any and all advances, debts, obligations and Liabilities
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether recovery upon such
indebtedness may be or hereafter becomes unenforceable.
2. At any time, without notice, and at the expense of Pledgor, Pledgee
in its name or in the name of its nominee or of Pledgor may, but shall not be
obligated to: (1) collect by legal proceedings or otherwise all dividends
(except cash dividends other than liquidating dividends), interest, principal
payments and other sums now or hereafter payable upon or on account of said
1.
Pledged Collateral; (2) enter into any extension, reorganization, deposit,
merger or consolidation agreement, or any agreement in any way relating to or
affecting the Pledged Collateral, and in connection therewith may deposit or
surrender control of such Pledged Collateral thereunder, accept other property
in exchange for such Pledged Collateral and do and perform such acts and things
as it may deem proper, and any money or property received in exchange for such
Pledged Collateral shall be applied to the indebtedness or thereafter held by it
pursuant to the provisions hereof; (3) insure, process and preserve the Pledged
Collateral; (4) cause the Pledged Collateral to be transferred to its name or to
the name of its nominee; (5) exercise as to such Pledged Collateral all the
rights, powers and remedies of an owner, except that so long as no default
exists under the Note or hereunder Pledgor shall retain all voting rights as to
the Pledged Shares.
3. Pledgor agrees to pay prior to delinquency all taxes, charges, liens
and assessments against the Pledged Collateral, and upon the failure of Pledgor
to do so, Pledgee at its option may pay any of them and shall be the sole judge
of the legality or validity thereof and the amount necessary to discharge the
same.
4. At the option of Pledgee and without necessity of demand or notice,
all or any part of the indebtedness of Pledgor shall immediately become due and
payable irrespective of any agreed maturity, upon the happening of any of the
following events: (1) failure to keep or perform any of the terms or provisions
of this Pledge Agreement; (2) failure to pay any installment of principal or
interest on the Note when due; (3) the levy of any attachment, execution or
other process against the Pledged Collateral; or (4) the insolvency, commission
of an act of bankruptcy, general assignment for the benefit of creditors, filing
of any petition in bankruptcy or for relief under the provisions of Title 11 of
the United States Code of, by, or against Pledgor.
5. In the event of the nonpayment of any indebtedness when due, whether
by acceleration or otherwise, or upon the happening of any of the events
specified in the last preceding paragraph, Pledgee may then, or at any time
thereafter, at its election, apply, set off, collect or sell in one or more
sales, or take such steps as may be necessary to liquidate and reduce to cash in
the hands of Pledgee in whole or in part, with or without any previous demands
or demand of performance or notice or advertisement, the whole or any part of
the Pledged Collateral in such order as Pledgee may elect, and any such sale may
be made either at public or private sale at its place of business or elsewhere,
or at any broker's board or securities exchange, either for cash or upon credit
or for future delivery; provided, however, that if such disposition is at
private sale, then the purchase price of the Pledged Collateral shall be equal
to the public market price then in Pledgee may be the purchaser of any or all
Pledged Collateral so sold and hold the same thereafter in its own right free
from any claim of Pledgor or right of redemption. Demands of performance,
notices of sale, advertisements and presence of property at sale are hereby
waived, and Pledgee is hereby authorized to sell hereunder any evidence of debt
pledged to it. Any sale hereunder may be conducted by any officer or agent of
Pledgee.
6. The proceeds of the sale of any of the Pledged Collateral and all
sums received or collected by Pledgee from or on account of such Pledged
Collateral shall be applied by Pledgee to the payment of expenses incurred or
paid by Pledgee in connection with any sale, transfer or delivery of the Pledged
Collateral, to the payment of any other costs, charges, attorneys' fees or
expenses mentioned herein, and to the payment of the indebtedness or any part
hereof, all in such
2.
order and manner as Pledgee in its discretion may determine. Pledgee shall then
pay any balance to Pledgor.
7. Upon the transfer of all or any part of the indebtedness Pledgee may
transfer all or any part of the Pledged Collateral and shall be fully discharged
thereafter from all liability and responsibility with respect to such Pledged
Collateral so transferred, and the transferee shall be vested with all the
rights and powers of Pledgee hereunder with respect to such Pledged Collateral
so transferred; but with respect to any Pledged Collateral not so transferred
Pledgee shall retain all rights and powers hereby given.
8. Until all indebtedness shall have been paid in full the power of
sale and all other rights, powers and remedies granted to Pledgee hereunder
shall continue to exist and may be exercised by Pledgee at any time and from
time to time irrespective of the fact that the indebtedness or any part thereof
may have become barred by any statute of limitations, or that the personal
liability of Pledgor may have ceased.
9. Pledgee may at any time deliver the Pledged Collateral or any part
thereof to Pledgor; provided however, that the receipt of Pledgor shall not
necessarily be a complete and full acquittance for the Pledged Collateral so
delivered, and Pledgee may not necessarily thereafter be discharged from any
remaining liability on the Note.
10. The rights, powers and remedies given to Pledgee by this Pledge
Agreement shall be in addition to all rights, powers and remedies given to
Pledgee by virtue of any statute or rule of law. Any forbearance or failure or
delay by Pledgee in exercising any right, power or remedy hereunder shall not be
deemed to be a waiver of such right, power or remedy, and any single or partial
exercise of any right, power or remedy hereunder shall not preclude the further
exercise thereof; and every right, power and remedy of Pledgee shall continue in
full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by Pledgee.
11. If any provision of this Pledge Agreement is held to be
unenforceable for any reason, it shall be adjusted, if possible, rather than
voided in order to achieve the intent of the parties to the extent possible. In
any event, all other provisions of this Pledge Agreement shall be deemed valid
and enforceable to the full extent possible.
12. This Pledge Agreement shall be governed by, and construed in
accordance with, the laws of the State of Arizona as applied to contracts made
and performed entirely within the State of Arizona by residents of such State.
Dated: , 2001
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PLEDGOR
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PLEDGOR'S Spouse has read,
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acknowledged and agrees
to the foregoing
3.
SECURED PROMISSORY NOTE
$
_________________________
Date
_______________________
Phoenix, Arizona
FOR VALUE RECEIVED, _________________ ("BORROWER"), an employee of
PETSMART, INC., a Delaware corporation ("COMPANY,) hereby unconditionally
promises to pay to the order of Company, in lawful money of the United States of
America and in immediately available funds, the principal sum of
___________________ Dollars ($_________) (the "LOAN") together with accrued and
unpaid interest thereon, each due and payable on the dates and in the manner set
forth below.
It is the intent of the parties that the purpose of this Note is not for
consumer, family or household purposes. The purpose of this Note is to provide
Borrower with funds with which to purchase the Company's Common Stock on the
open market. This Note is made with full recourse. Borrower understands and
agrees that absent an Event of Default of the type contained in Section 6(e)
below, Borrower shall hold the Common Stock purchased with the proceeds of this
Note for at least eighteen (18) months. If an Event of Default of the type
contemplated in Section 6(e) occurs during period during which the Borrower is
prohibited from selling the Common Stock purchased with the proceeds of this
Note due to the Company's internal policies, the Borrower understands and agrees
that this Note may still accelerate and become due and payable.
This Secured Promissory Note is the Note referred to in and is executed
and delivered in connection with that certain Stock Pledge Agreement of even
date herewith and executed and delivered by Borrower in favor of Company (as the
same may from time to time be amended, modified or supplemented or restated, the
"SECURITY AGREEMENT"). Additional rights of the Company are set forth in the
Security Agreement. All capitalized terms used herein and not otherwise defined
herein shall have the respective meanings given to them in the Security
Agreement.
13. PRINCIPAL REPAYMENT. The outstanding principal amount of the Loan
shall be due and payable on the earlier of the dates below:
a) The fifth anniversary of this Note;
b) Upon an Event of Default, as defined in Section 6
below; or
c) Upon the sale of any of the Common Stock of the
Company securing this Note on a pro rata basis.
4.
14. INTEREST RATE. Borrower further promises to pay interest on the
outstanding principal amount hereof from the date hereof until payment in full,
which interest shall be payable at the rate of seven and seventy-five
one-hundredths percent (7.75%) per annum or the maximum rate permissible by law
(which under the laws of the State of Arizona shall be deemed to be the laws
relating to permissible rates of interest on commercial loans), whichever is
less. Interest shall be due and payable on the dates that the corresponding
principal is due and payable and shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. No interest shall accrue on unpaid
interest.
15. PLACE/MANNER OF PAYMENT. All amounts payable hereunder shall be
payable at the office of the Company unless another place of payment shall be
specified in writing by the Company. If Borrower fails to make such payment,
then Borrower hereby authorizes the Company to deduct any payment of
principal/interest due hereunder from the first and every subsequent paycheck
issued by the Company to Borrower after the date on which said payment is due,
or if a payment is due on a date on which a paycheck is issued to Borrower, from
that paycheck, or from Borrower's final paycheck, bonus check or expense
reimbursement from the Company, including any check for vacation time owed to
the Borrower. Borrower understands that taxes will be deducted from these
paychecks based upon the amount that would have been paid Borrower had payments
for principal/interest not been deducted.
16. APPLICATION OF PAYMENTS. Payment on this Note shall be applied
first to accrued interest, if any, and thereafter to the outstanding principal
balance hereof.
17. SECURED NOTE. The full amount of this Note is secured by the
collateral identified and described as security therefor in the Security
Agreement. Borrower shall not, directly or indirectly, create, permit or suffer
to exist, and shall defend the collateral against and take such other action as
is necessary to remove, any lien on or in the collateral, or in any portion
thereof except as permitted pursuant to the Security Agreement.
18. DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" hereunder:
(a) Borrower fails to pay timely any of the principal amount
due under this Note on the date the same becomes due and payable or any accrued
interest or other amounts due under this Note on the date the same becomes due
and payable or within five (5) business days thereafter;
(b) Borrower files a petition or action for relief under any
bankruptcy, insolvency or moratorium law or any other law for the relief of, or
relating to, debtors, now or hereafter in effect, or makes any assignment for
the benefit of creditors or takes any action in furtherance of any of the
foregoing;
(c) An involuntary petition is filed against Borrower (unless
such petition is dismissed or discharged within sixty (60) days) under any
bankruptcy statute now or hereafter in effect, or a custodian, receiver,
trustee, assignee for the benefit of creditors (or other similar official) is
appointed to take possession, custody or control of any property of Borrower;
5.
(d) Borrower defaults on an obligation contained in the
Security Agreement; or
(e) Borrower's employment by or association with Company is
terminated for any reason or no reason, including, without limitation, death of
Borrower.
Upon the occurrence of an Event of Default hereunder, all unpaid principal,
accrued interest and other amounts owing hereunder shall, at the option of
Company, and, in the case of an Event of Default pursuant to (B) or (C) above,
automatically, be immediately due, payable and collectible by Company pursuant
to applicable law. If all unpaid principal accrued interest or other amounts
owing hereunder are not paid within ten (10) calendar days following the
occurrence of the Event of Default, any such sums then or subsequently due and
owing shall immediately begin accruing interest at the compounded annual rate of
fifteen (15) percent. Notwithstanding the foregoing, if an Event of Default has
occurred under (E) above due to, in Company's sole discretion, no malfeasance or
misfeasance on the part of Borrower, this Note shall be accelerated only after 5
days' notice to Borrower or any successor. Company shall have all rights and may
exercise any remedies available to it under law, successively or concurrently.
Borrower expressly acknowledges and agrees that Company shall have the right to
offset any obligations of Borrower hereunder against salaries, bonuses or other
amounts that may be payable to Borrower by Company.
19. WAIVER. Borrower waives presentment and demand for payment, notice
of dishonor, protest and notice of protest of this Note, and shall pay all costs
of collection when incurred, including, without limitation, reasonable
attorneys' fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to
any demands hereunder is hereby waived to the full extent permitted by law.
20. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of Arizona, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
21. SUCCESSORS AND ASSIGNS. The provisions of this Note shall inure to
the benefit of and be binding on any successor to Borrower and shall extend to
any holder hereof. Borrower shall not, without the prior written consent of
holder, assign any of its rights or obligations hereunder.
BORROWER:
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BORROWER'S Spouse has read,
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acknowledged and agrees
to the foregoing
6.
