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EXHIBIT 10.27
SECURITIES PLEDGE AGREEMENT
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THIS SECURITIES PLEDGE AGREEMENT made as of July 7, 1999, by and among
XXXXXXXX COFFEE, INC., COFFEE PEOPLE, INC., COFFEE PEOPLE WORLDWIDE, INC.,
XXXXXX XXXX'X, INC., EDGLO ENTERPRISES, INC., XXXXXX XXXX'X GOURMET COFFEES
CORP., and XXXXXX XXXX'X GOURMET COFFEES FRANCHISING CORP. (collectively, the
"Pledgors" and each individually a "Pledgor"); and BANKBOSTON, N.A., (together
with its successors and assigns, the "Secured Party").
RECITALS
A. The Pledgors and the Secured Party entered into a Credit Agreement
dated on or about June 30, 1999 (as the same may be amended, restated, renewed,
replaced, supplemented or otherwise modified from time to time, the "Credit
Agreement"), pursuant to which the Secured Party is extending credit to the
Pledgors. Capitalized terms used herein without definition have the meanings
assigned to them in the Credit Agreement.
B. It is a condition to the Secured Party's willingness to enter into
the Credit Agreement and provide to the Pledgors the financing contemplated
thereby that the Pledgors shall have pledged to the Secured Party, for the
benefit of the Secured Party, all of the issued and outstanding capital stock,
partnership interests, member interests and other equity interests of now or
hereafter held legally or beneficially by any Pledgor, including without
limitation all equity interests of their existing and future Subsidiaries.
C. Each Pledgor will benefit materially from the extensions of credit
contemplated by the Credit Agreement and, as a material inducement to the
Secured Party to enter into the Credit Agreement and to extend credit to the
Pledgors as contemplated thereby, wishes hereby to pledge to the Secured Party
such capital stock and interests.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each of the parties hereto, the
parties hereby agree as follows:
Section 1. Pledge.
(a) For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, each Pledgor hereby delivers, pledges, grants
security interests in and assigns to the Secured Party all of such Pledgor's
right, title and interest in and to, whether now existing or hereafter coming
into existence, the securities, shares of capital stock, warrants, options,
partnership interests, member interests, and other equity and ownership
interests now or hereafter standing in the name of or otherwise now or hereafter
held legally or beneficially by such Pledgor (the "Ownership Interests") in any
issuer (a "Company" and, collectively, the "Companies"), and all certificates
(if any) representing or evidencing such Ownership Interests standing in such
Pledgor's name, all such Ownership Interests as of the date hereof being more
particularly described on Exhibit A attached hereto, and all other rights of
such Pledgor under any and all agreements, including, without limitation, all
right, title and interest (if any) of such
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Pledgor as a partner or director, as the case may be, to participate in the
operation or management of any Company and all rights of such Pledgor to the
property, assets, partnership interests and distributions under the
Organizational Documents, and all present and future rights of such Pledgor to
receive payment of money or other distributions or payments arising out of or in
connection with the Ownership Interests of such Pledgor in any Company and its
rights under the Organizational Documents, any and all other related agreements
and all general intangibles relating thereto and proceeds resulting therefrom as
collateral security, and all rights of any Pledgor with respect to the pledge of
any Ownership Interests pursuant to the terms and conditions of the
Organizational Documents or any other agreement or instrument, for (i) the
payment and performance of all obligations of the Pledgors under the Credit
Agreement; (ii) the due and punctual payment of the Notes, as defined in the
Credit Agreement and issued pursuant thereto, to the Secured Party, including,
without limitation, all interest payable on the Notes at the interest rates
provided therein and in the Credit Agreement, regardless of the extent allowed
as a claim in any proceeding in respect of the bankruptcy, reorganization or
insolvency of any Pledgor (a "Reorganization"); (iii) the due and punctual
payment of any of the Pledgors' notes or instruments as may hereafter from time
to time be issued in addition to, in place of, or in amendment of, the Notes
under the Credit Agreement, including, without limitation, all interest payable
on such notes or instruments at the interest rates provided therein, regardless
of the extent allowed as a claim in any Reorganization; (iv) the payment and
performance of all indebtedness, liabilities and obligations of the Pledgors
under the other Security Documents contemplated by the Credit Agreement; (v) the
payment and performance of all obligations, indebtedness and liabilities of any
of the Pledgors to the Secured Party under the other Security Documents
contemplated by the Credit Agreement; (vi) the performance of all of the
obligations of each of the Pledgors to the Secured Party contained in any of the
Loan Documents contemplated by the Credit Agreement; and (vii) the payment of
all other future advances and other obligations of any Pledgor to the Secured
Party including, without limitation any future loans and advances made to any
Pledgor by the Secured Party prior to, during or following any Reorganization,
and any and all other indebtedness, liabilities and obligations of any Pledgor
to the Secured Party of every kind and description, direct, indirect or
contingent, now or hereafter existing, due or to become due (all of the
foregoing hereinafter called the "Obligations").
(b) In the case of certificated securities, each Pledgor shall promptly
pledge and deposit hereunder with the Secured Party, any stock or other
certificates, warrants, options or other rights to acquire a certificate of
Ownership Interests acquired by such Pledgor in addition to the securities
referred to on Exhibit A attached hereto, whether by (i) new purchase or (ii)
new issuance or by declaration of a dividend or distribution with respect to, or
a split of, or conversion of, any securities now or hereafter held in pledge
(all in suitable form for transfer by delivery or accompanied by (a) duly
executed instruments of transfer or assignments in blank, and (b) any required
transfer tax stamps). Such stock or other certificate, equity securities,
warrants, options, voting or other rights shall stand pledged and assigned as
collateral security for the Obligations in the same manner as the property
described in the first paragraph hereof and this paragraph. Nothing contained in
this Section 1 shall be deemed to permit any issuances of debt or equity
securities, exercise of rights, distributions, payments or other actions not
otherwise permitted by the Credit Agreement. In the case of uncertificated
securities, each Pledgor shall comply with the provisions of Section 2(h)
hereunder and cause the lien on the Pledged Securities to be registered in the
books and records maintained by the applicable Company. (All
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of the property described in the first paragraph hereof and this paragraph is
hereinafter collectively called the "Pledged Securities".)
Section 2. Representations, Warranties and Covenants of the Pledgors.
Each Pledgor hereby represents, warrants and covenants as follows with respect
to the Pledged Securities held in such Pledgor's name:
(a) Except for the security interest and pledge hereunder and
any security interest and pledge permitted under the Credit Agreement,
(i) such Pledgor is the legal and beneficial owner of the Pledged
Securities and such Pledgor holds the Pledged Securities free and clear
of any Encumbrance or restriction on transfer (in the case of
restrictions on transfer, except as may be imposed by any state or
local governmental authorities), (ii) there are no restrictions upon
the voting rights of any of the Pledged Securities (other than as may
be imposed by any state or local governmental authorities), (iii) the
Pledged Securities are duly and validly issued, fully paid and
non-assessable, and (iv) such Pledgor has the right to pledge said
securities to the Secured Party hereunder free of any Encumbrances.
(b) Such Pledgor shall promptly pay any and all taxes,
assessments and governmental charges upon the Pledged Securities
pledged by such Pledgor hereunder when due other than those contested
in good faith by appropriate proceedings for which adequate funds for
the payment thereof shall have been set aside.
(c) Except as permitted under the Credit Agreement, such
Pledgor shall not sell or otherwise assign, transfer or dispose of the
Pledged Securities or any interest therein during such time as they
shall be pledged to the Secured Party as contemplated hereby.
(d) Such Pledgor shall keep the Pledged Securities free from
any Encumbrance except for the pledge provided hereby and shall take
such actions reasonably necessary to protect such Pledged Securities
against all claims and demands of all persons at any time claiming any
interest therein.
(e) The Pledged Securities are duly and validly issued, fully
paid and nonassessable, and in the case of certificated securities,
such Pledgor or the Secured Party holds a certificate or instrument
evidencing the Pledged Securities issued in the name of such Pledgor as
described on Exhibit A.
(f) The Pledged Securities represent, and the Pledgors are,
the legal and beneficial holders of, all of the issued and outstanding
equity interests of the Companies listed on Exhibit A.
(g) Such Pledgor will not, without the prior written consent
of the Secured Party, which consent will not be unreasonably withheld
or delayed, amend or
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modify any of the Organizational Documents, as in effect on
the date hereof provided however, each Pledgor agrees to
amend immediately any Organizational Documents which contain provisions
similar to those set forth in Section 102(b)(2) of Title 8 of the
Delaware General Corporation Law in order to delete any such provision.
(h) Such Pledgor shall execute and deliver written
instructions to the applicable Company to register the Encumbrance
created hereunder in any uncertificated equity interests in the books
and records maintained by such Company for such registrations and cause
such Company to execute and deliver to the Secured Party a written
confirmation and account control agreement to the effect that the
Encumbrance created hereunder in such equity interests has been duly
registered in such books and records and is perfected.
(i) Such Pledgor will perform and observe, or cause to be
performed and observed, all of such Pledgor's obligations under the
Organizational Documents.
(j) The execution and delivery of, and performance by such
Pledgor of its respective obligations under the Security Documents to
which it is a party will not violate any provision of law, any order,
judgment or decree of any court or other agency of government, the
Organizational Documents or any indenture, agreement or other
instrument to which such Pledgor is a party, or by which such Pledgor
is bound, or be in conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under, or result
in the creation or imposition of any Encumbrance of any nature
whatsoever upon any of the property or assets of such Pledgor pursuant
to, any such indenture, agreement or instrument.
(k) Such Pledgor is not required to obtain any consent,
approval or authorization from, or to file any declaration or statement
with, any governmental instrumentality or other agency or any other
Person in connection with or as a condition to the execution, delivery
or performance of any of the Security Documents to which such Pledgor
is a party, except such consents as have already been obtained.
(l) Exhibit A accurately and completely lists each Pledgor's
correct legal name and principal address and amount of Ownership
Interests in any of the Companies and whether the same are
certificated, all as of the date hereof.
(m) This Agreement and other agreements and instruments
relating hereto constitute the valid and binding obligations of such
Pledgor, enforceable against it in accordance with its terms, subject,
however to bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the rights and remedies of creditors generally
or the application of principles of equity, whether in any action in
law or proceeding in equity, and subject to the availability of the
remedy of specific performance or of any other equitable remedy or
relief to enforce any right under any such agreement.
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Section 3. Right to Receive Distributions on Pledged Securities.
(a) Unless and until an Event of Default (as defined in Section 5
hereof) has occurred, and if the Secured Party has notified any Pledgor in
writing of its election to exercise the Secured Party's rights under this
Section 3, such Pledgor shall be entitled to receive and retain for its own use
any and all dividends, interest and other payments and distributions made upon
or with respect to the Pledged Securities (subject to any restrictions thereon
set forth in the Credit Agreement or any other Loan Document referred to
therein), except
(i) dividends or distributions payable in securities or other
property (other than cash dividends or distributions);
(ii) dividends or distributions on dissolution or on partial or
total liquidation or in connection with a reduction of
capital, capital surplus or paid-in surplus; and
(iii) any other securities issued with respect to or in lieu of
the Pledged Securities in any manner whatsoever (whether
upon conversion of any convertible securities included
therein or through a split, spin-off, split-off,
reclassification, merger, consolidation, sale of assets,
combination of securities or otherwise).
All of the foregoing, together with all new, substituted or additional
certificates, warrants, options, notes or other rights, or other securities
issued in addition to or in respect of all or any of the Pledged Securities
shall be delivered to the Secured Party hereunder as required by Section 1
hereof, to be held as collateral pursuant to the terms hereof in the same manner
as the Pledged Securities delivered to the Secured Party on the date hereof.
Nothing in this Section 3 shall be deemed to permit any issuance of debt or
equity securities, exercise of rights, distributions, payments or other actions
not otherwise permitted by the Credit Agreement.
(b) Notwithstanding any provision herein to the contrary, if any Event
of Default shall have occurred, upon the giving of the written notice referred
to in subsection (a) above, then and whether or not any holder of the
Obligations exercises any available option to declare such Obligations due and
payable or seeks or pursues any other relief or remedy available to such holder
under this Agreement or any instrument or agreement evidencing or securing any
Obligations, all dividends, distributions, or interest or principal payments, as
the case may be, on the Pledged Securities shall be paid directly to the Secured
Party, and retained by it as part of the Pledged Securities, subject to the
terms of this Agreement, and, if the Secured Party shall so request in writing,
the Pledgor agrees to execute and deliver to the Secured Party appropriate
additional distribution and other orders and documents to that end.
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Section 4. Right to Vote Pledged Securities.
(a) Unless and until an Event of Default has occurred, and if the
Secured Party shall have notified any Pledgor in writing of its election to
exercise the Secured Party's rights under this Section 4, each Pledgor shall
have the right, from time to time, to vote and to give consents, ratifications
and waivers with respect to the Pledged Securities held in such Pledgor's name
and to exercise conversion rights with respect to any convertible securities
included therein; provided, however, that no vote shall be cast, and no consent
shall be given or member action taken, which would have the effect of impairing
the position or interest of the Secured Party with respect to the Pledged
Securities or Secured Party's rights and remedies under, or which would
authorize or effect any action then prohibited by, the Credit Agreement or any
other Loan Document referred to therein.
(b) Notwithstanding any provision herein to the contrary, if any Event
of Default shall have occurred, upon the giving of the written notice referred
to in subsection (a) above, then and whether or not any holder of the
Obligations exercises any available option to declare such Obligations due and
payable or seeks or pursues any other relief or remedy available to such holder
under this Agreement or any instrument or agreement evidencing or securing any
Obligations, the Secured Party, or its nominee, shall forthwith, without further
action on the part of any person, have the sole and exclusive right to exercise
all voting and other powers of ownership pertaining to the Pledged Securities
and shall exercise such powers in such manner as the Secured Party shall
determine to be necessary, appropriate or advisable. Each Pledgor hereby agrees
to execute and deliver to the Secured Party such additional powers,
authorizations, proxies, dividends and such other documents as the Secured Party
may reasonably request to secure the Secured Party the rights, powers and
authority intended to be conferred upon by this subsection (b).
Section 5. Events of Default. Each Pledgor shall be in default under
this Agreement upon the occurrence of any of one of the following events (herein
referred to as an "Event of Default"):
(a) default by such Pledgor in the due observance or
performance of any covenant or agreement contained herein, which
default, if curable, is not cured within 10 days of the earlier of
receipt by such Pledgor of notice thereof or such Pledgor's actual
knowledge thereof;
(b) breach by such Pledgor in any material respect of any
representation or warranty herein contained; or
(c) the occurrence of any "Event of Default" under (and as
defined) in the Credit Agreement.
Section 6. Remedies Upon Event of Default.
(a) If any Event of Default shall occur, the Secured Party may exercise
all the rights and remedies of a secured party under the Uniform Commercial
Code. Without limitation of the foregoing, unless the Obligations shall have
been paid in full in cash, the Secured Party may, in the Secured Party's sole
discretion, without further demand, advertisement or notice, except as
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expressly provided for in subsection (i) below, apply the cash, if any, then
held by it as collateral hereunder, for the purposes and in the manner provided
in Section 7 hereof, and, if there shall be no such cash or the cash so applied
shall be insufficient to make payment in full of all payments provided in
Section 7 hereof,
(i) Sell the Pledged Securities, or any part thereof, in one
or more sales, at public or private sale, conducted by any officer or
agent of the Secured Party, at a place of business of the Secured Party
or elsewhere, for cash, upon credit or future delivery, and at such
price or prices as the Secured Party shall determine, and, to the
extent permitted by law, the Secured Party may be the purchaser of any
or all of the Pledged Securities so sold. Upon any such sale, the
Secured Party shall have the right to deliver, assign and transfer to
the purchaser thereof the Pledged Securities so sold. Each purchaser
(including the Secured Party) at any such sale shall hold the Pledged
Securities so sold, absolutely free from any claim or right of
whatsoever kind, including, without limitation, any equity or right of
redemption of any Pledgor which such Pledgor, to the extent it may
lawfully do so, hereby specifically waives. Unless the Pledged
Securities are of a type sold on a recognized market, the Secured Party
shall give such Pledgor at least 10 days' advance written notice of its
intention to make any such public or private sale. Secured Party and
Pledgor agree that such notice constitutes "reasonable notification"
within the meaning of Section 9-504(3) of the Uniform Commercial Code.
Such notice, in case of a public sale shall state the time and place
fixed for such sale. Such notice in the case of a private sale or
disposition, shall state the time after which any private sale or other
intended disposition is to be made. The Secured Party shall not be
obligated to make any sale pursuant to any such notice. The Secured
Party may, without notice or publication, adjourn any public or private
sale from time to time by announcement at the time and place fixed for
such sale, or any adjournment thereof, and any such sale may be made at
any time or place to which the same may be so adjourned without further
notice or publication. In case of any sale of all or any part of the
Pledged Securities for credit or for future delivery, the Pledged
Securities so sold may be retained by the Secured Party until the
selling price is paid by the purchaser thereof, but the Secured Party
shall not incur any liability in case of the failure of such purchaser
to pay for the Pledged Securities so sold, and in case of any such
failure, such Pledged Securities may again be sold under and pursuant
to the provisions hereof; or
(ii) Proceed by a suit or suits at law or in equity to
foreclose upon this Pledge Agreement and sell the Pledged Securities,
or any portion thereof, under a judgment or decree of a court or courts
of competent jurisdiction.
(b) If at any time when the Secured Party shall determine to exercise
its right to sell all or any part of the Pledged Securities pursuant to
subsection (a)(i) of this Section, and if such Pledged Securities or the part
thereof to be sold shall not, for any reason whatsoever, be effectively
registered under the Securities Act of 1933, as from time to time in effect (the
"Securities Act") or the securities laws of any state, the Secured Party, in its
sole and absolute
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discretion, is hereby expressly authorized to sell such Pledged Securities or
such part thereof by private sale in such manner and under such circumstances as
the Secured Party may reasonably determine in order that such sale may legally
be effected without such registration. The Secured Party may sell all or any
part of the Pledged Securities at any price which is commercially reasonable
under the circumstances, in their sole and absolute discretion.
(c) The Secured Party as attorney-in-fact pursuant to Section 8 hereof
may, in the name and stead of each Pledgor, make and execute all conveyances,
assignments and transfers of the Pledged Securities sold in accordance with this
Agreement. Each Pledgor shall, if so requested by the Secured Party ratify and
confirm any sale or sales by executing and delivering to the Secured Party, or
to such purchaser or purchasers, all such instruments as may, in the judgment of
the Secured Party, be advisable for such purpose.
(d) The receipt of the Secured Party of the purchase money paid at any
such sale made by it shall be a sufficient discharge therefor to any purchaser
(other than the Secured Party) of the Pledged Securities, or any portion
thereof, sold as aforesaid; and no such purchaser (or his or its representatives
or assigns) (other than the Secured Party), after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money or any part thereof or in any manner whatsoever be answerable for
any loss, misapplication or nonapplication of any such purchase money, or any
part thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
(e) The Secured Party shall incur no liability as a result of the sale
of the Pledged Securities, or any part thereof, at any private sale pursuant to
Section 6 hereof. Each Pledgor hereby waives any claims against the Secured
Party arising by reason of the fact that the price at which the Pledged
Securities may have been sold at such private sale was less than the price that
might have been obtained at a public sale or was less than the aggregate amount
of the secured Obligations, even if the Secured Party accepts the first offer
received and does not offer the Pledged Securities to more than one offeree, so
long as the terms of the sale were commercially reasonable.
(f) In connection with the exercise by the Secured Party of any of its
rights and remedies under this Agreement, the Pledgor consents to the assignment
of any Ownership Interests (including any economic interest therein and all
voting rights and respect thereof) in any of the Companies and agrees that no
such assignment and no foreclosure thereunder or other remedies in respect
thereof in accordance herewith shall in itself effect a termination or
dissolution of any Company. Effective as of the date that the Secured Party
takes title to the Pledged Securities pledged hereunder, voluntarily or
involuntarily by way of foreclosure or agreement, in accordance with the
provisions of this Agreement, the Secured Party shall be entitled to all rights
benefits and privileges of a holder of such Ownership Interests except that the
Secured Party shall be obligated to make any capital contributions not expressly
assumed by them in writing.
Section 7. Application of Proceeds. The proceeds of any sale, or of
collection, of all or any part of the Pledged Securities shall be applied by the
Secured Party, without any marshaling of assets, in the following order:
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(a) first, to the payment of all of the costs and expenses of
such sale, including, without limitation, reasonable legal fees, and
all other expenses, liabilities and advances made or incurred by the
Secured Party in connection therewith (including, without limitation,
costs and expenses incurred in connection with any bankruptcy,
reorganization or insolvency proceeding);
(b) second, to the payment of the Obligations in such order as
the Lender in its sole discretion shall determine, until payment in
full thereof; and
(c) finally, ratably in accordance with their relative sharing
ratios, to each Pledgor, its, his or her successors, assigns, legal
representatives or heirs, or to whomsoever may be lawfully entitled to
receive the same.
Section 8. The Secured Party Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Secured Party as the Pledgor's lawful attorney, with full
power of substitution, in the name of such Pledgor, for the sole use and benefit
of the Secured Party, but at such Pledgor's expense, to take any action and
execute any instruments which the Secured Party may deem necessary or advisable
to accomplish the purposes hereof. Such appointment as attorney is irrevocable
and coupled with an interest.
Section 9. Record Ownership of Pledged Securities. Upon the occurrence
of an Event of Default and subject to the requirements of mandatory law, the
Secured Party may cause, upon receipt of written notification to any Pledgor,
any or all of the Pledged Securities to be transferred of record into the
Secured Party's name. Each Pledgor shall, upon request, promptly give to the
Secured Party copies of any notices or other communications received by such
Pledgor with respect to the Pledged Securities registered in the such Pledgor's
name.
Section 10. Perfection. Prior to or concurrently with the execution and
delivery of this Agreement, each Pledgor shall (i) deliver the certificates
representing the Pledged Securities hereunder if any, to the Secured Party or
register the same for purposes of Article 8 of the Uniform Commercial Code; and
(ii) execute such financing statements and other documents in such offices as
the Secured Party may reasonably request to perfect the security interest
granted by such Pledgor pursuant to Section 1 of this Agreement and will permit
the same to be filed by the Secured Party.
Section 11. No Waiver. No failure on the part of the Secured Party to
exercise, and no delay on the part of the Secured Party in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise by the Secured Party of any right, power or
remedy hereunder preclude any other or further right, power or remedy.
Section 12. Survival of Obligations; Termination of Pledge. This Pledge
Agreement and the warranties, representations, agreements and covenants
contained herein and in any certificates or instruments delivered pursuant
hereto shall survive the making of the Loans and the execution and delivery of
the Notes, regardless of any investigation made by the Secured Party or any
person on behalf of the Secured Party, and shall continue for so long as any of
the
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Obligations shall remain outstanding or the Secured Party shall have any
obligation to advance funds to any Pledgor. Upon the repayment and performance
in full indefeasibly in cash of all the Obligations and the expiration or
termination of any obligations of the Secured Party to advance funds to the
Pledgors, the Secured Party shall forthwith assign, transfer and deliver to each
Pledgor or its assignees, without representation, warranty or recourse, against
appropriate receipts, all the Pledged Securities, if any, then held by it in
pledge hereunder and all duly executed instruments of transfer or assignments in
blank relating thereto and any other property held by the Secured Party pursuant
to this Agreement free and clear of the Encumbrance of this Agreement and the
other Loan Documents, except that such Encumbrance shall survive with respect to
any payment made or received by the Secured Party in respect of the Obligations
that is subsequently voided as a fraudulent conveyance, preference or otherwise.
Section 13. Consent to Jurisdiction. Each Pledgor hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the Commonwealth of Massachusetts, the courts of the United
States of America for the District of Massachusetts, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Pledgor at its address as set forth in the Credit
Agreement or at such other address of which the Secured Party shall
have been notified pursuant to the terms of this Agreement;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
Section 14. WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE SECURED
PARTY HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION
BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER AGREEMENTS EXECUTED IN
CONNECTION HEREWITH.
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Section 15. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the legal representatives, heirs, successors
and assigns of each Pledgor and the Secured Party, and any subsequent holder of
any of the Obligations.
Section 16. Additional Instruments and Assurance. Each Pledgor hereby
agrees, at such Pledgor's own expense: (i) to execute and deliver, from time to
time, any and all further, or other, instruments and to perform such acts, as
shall be reasonably required to effect the purposes of this Agreement to secure
to the Secured Party, and to all persons who may from time to time be the holder
of any of the Obligations, the benefits of all right, authorities and remedies
conferred upon the Secured Party by the terms of this Agreement, and (ii) to
otherwise cooperate fully with the Secured Party in taking any action which they
may reasonably request in order to cause the Secured Party to obtain and enjoy
their full rights and benefits under the Loan Documents, including without
limitation, using its best efforts to assist the Security Party in obtaining the
approval or any state municipality or other governmental authority for any
action or transaction contemplated by any of the Loan Documents which is then
required under applicable law.
Section 17. Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telecopied
communication) and mailed or telecopied or delivered to the applicable party at
the addresses indicated below.
If to the Secured Party, to its address or telecopy number set forth in
the Credit Agreement,
with a copy (which shall not constitute notice) to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No: (6l7) 439-4170
If to any Pledgor to the Borrowers' address or telecopy number as set
forth in the Credit Agreement,
with a copy (which shall not constitute notice) to:
Xxxx X. Xxxxxxxx III, Esq.
Xxxxxx, Xxxx & Xxxxxxxx, LLP
0 Xxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
or, as to each party, at such other address as shall be designated by such
parties in a written notice to the other parties complying as to delivery with
the terms of this Section. All such
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notices, requests, demands and other communication shall be deemed given upon
receipt by the party to whom such notice is directed.
Section 18. Severability. In case any one or more of the provisions of
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had not been
included. The rights, powers and remedies provided herein in favor of the
Secured Party shall not be deemed exclusive, but shall be cumulative, and shall
be in addition to all other rights and remedies in favor of the Secured Party
existing at law or in equity, including (without limitation) all of the rights,
powers and remedies available to a secured party under any law or regulation.
Section 19. Savings Clause. Anything in this Agreement to the contrary
notwithstanding, this Pledge Agreement shall not constitute an agreement to
pledge or assign, if an attempted pledge or assignment, without the consent of a
third party thereto, would constitute a breach of any Organizational Agreement
relating thereto or in any way effect the respective rights of the Pledgor or
the Secured Party thereunder, unless such consent is obtained. If such consent
is not obtained, or if an attempted pledge or assignment thereof would be
ineffective or would effect the rights thereunder so that the Secured Party
would not receive all such rights, each of the Pledgors will cooperate with the
Secured Party to provide to the Secured Party the benefits of such Ownership
Interests and Pledged Securities and claims or rights and benefits arising
thereunder or resulting therefrom.
Section 20. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED EXECUTED AS A
SEALED INSTRUMENT AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AS A CONTRACT TO BE EXECUTED AND
PERFORMED WITHIN THE COMMONWEALTH OF MASSACHUSETTS.
Section 21. Miscellaneous. The headings of the Sections of this
Agreement have been inserted for convenience of reference only and shall in no
way affect the construction or interpretation of this Agreement. In the event
this Agreement shall be enforced by suit or otherwise, each Pledgor will
reimburse the Secured Party and the holder or holders of the Obligations, upon
demand, for all reasonable expenses incurred in connection therewith, including
without limitation, reasonable attorneys' fees (including, without limitation,
all such costs, charges and expenses incurred by the Secured Party in connection
with any Reorganization). This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same Agreement.
Section 22. Permitted Transfers to Secured Party. Notwithstanding the
provisions of any Organizational Document or any other agreement to the
contrary:
(a) The Pledgors hereby (i) consent to the collateral assignment and
pledge of the Ownership Interests of Pledgors (and all economic interests
therein) pursuant to this Agreement; (ii) in connection with the exercise by the
Secured Party of any of its rights and remedies under this Agreement, consent to
the assignment of any of such Ownership Interests (including any
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economic interests therein) to any other Person (and to the substitution of such
other Person as a substitute partner, member, manager and/or shareholder, as the
case may be, holding the Ownership Interest(s) so assigned), and (iii) agree
that no such assignment (or substitution) and no foreclosure thereunder or other
remedies in respect thereof shall effect a termination or dissolution of any
Company.
(b) Without limiting the generality of the foregoing, each Pledgor
hereby agrees that upon the occurrence of any Event of Default hereunder, to the
extent not permitted by applicable law:
(i) with respect to each Ownership Interest (and economic
interest therein) assigned by any Pledgor, the Secured Party, at its
election, shall thereupon be admitted (or shall have the right to have
one or more designees of its choice admitted) as a substitute
stockholder, member, limited partner or otherwise, as the case may be
(in each such case (whether the Secured Party or its designee) being
hereinafter referred to as the "New Equity Owner") with no further
action by any Pledgor or any other Person being necessary, and the
Pledgors hereby consent to such admission and agrees to execute and
deliver such instruments, if any, as shall be necessary to effect or
further evidence the foregoing;
(ii) with respect to the Secured Party and any other New
Equity Owner, the Pledgors waive the right to enforce the voting
restrictions set forth in any Organizational Documents and consents to
the Secured Party and any New Equity Owner not being bound by such
voting restrictions;
(iii) in connection with the admission of any New Equity
Owner, no capital contribution by such New Equity Owner shall be
required;
(iv) as provided herein, no New Equity Owner shall have any
liability with respect to the obligations of any Pledgor under the
Credit Agreement or other Loan Documents; and
(v) on and after the admission of any New Equity Owner, such
New Equity Owner shall have all powers, statutory and otherwise,
possessed at law and shall have the authority to manage the business
and affairs of such Company. Except as otherwise provided herein or in
any applicable laws, the Pledgors thereafter shall have no further
powers or privileges with respect to the management of such Company.
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IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the parties hereto by their duly authorized representatives all as
of the day and year first above written.
SECURED PARTY:
--------------
BANKBOSTON, N.A.
By: /s/
--------------------------------
PLEDGORS:
XXXXXXXX COFFEE, INC.
By: /s/ Xxx Xxxxx
--------------------------------
COFFEE PEOPLE, INC.
By: /s/ Xxx Xxxxx
--------------------------------
COFFEE PEOPLE WORLDWIDE, INC.
By: /s/ Xxx Xxxxx
--------------------------------
XXXXXX XXXX'X, INC.
By: /s/ Xxx Xxxxx
--------------------------------
EDGLO ENTERPRISES, INC.
By: /s/ Xxx Xxxxx
--------------------------------
XXXXXX XXXX'X GOURMET COFFEES CORP.
By: /s/ Xxx Xxxxx
--------------------------------
XXXXXX XXXX'X GOURMET COFFEES
FRANCHISING CORP.
By: /s/ Xxx Xxxxx
--------------------------------
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STATE OF California
-----------------------
COUNTY OF Orange
-----------------------
The foregoing Pledge Agreement was executed and acknowledged before me this 30th
day of June, 1999 by Xxx Xxxxx, personally known to me to be the an executive
officer of each of the foregoing Pledgors on behalf of such Pledgors.
/s/
---------------------------------
Notary Public
My Commission Expires:
-----------
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EXHIBIT A
PLEDGED SECURITIES
===========================================================================================================================
OWNERSHIP INTEREST
(percentage; no. and
NAME AND ADDRESS type of interests, CERTIFICATE
OF PLEDGOR ISSUER shares) NOS. (if any)
---------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Coffee, Inc. 100%
0000 Xxxxxxxxx Xxxxx Coffee People 1,000 shares of
Xxxxxx, Xxxxxxxxxx 00000 Worldwide, Inc. Common Stock 1
---------------------------------------------------------------------------------------------------------------------------
Coffee People Worldwide, Inc. 100%
0000 Xxxxxxxxx Xxxxx CP Acquisition Corp. n/k/a 1,000 shares of
Xxxxxx, Xxxxxxxxxx 00000 Coffee People, Inc. Common Stock 2
---------------------------------------------------------------------------------------------------------------------------
Coffee People, Inc. 100%
0000 Xxxxxxxxx Xxxxx 261 shares of
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxx Xxxx'x, Inc. Common Stock 4
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxx'x, Inc. 100%
0000 Xxxxxxxxx Xxxxx 1,000 shares of
Xxxxxx, Xxxxxxxxxx 00000 Edglo Enterprises, Inc. Common Stock 6
---------------------------------------------------------------------------------------------------------------------------
Edglo Enterprises, Inc. 100%
0000 Xxxxxxxxx Xxxxx Xxxxxx Xxxx'x Gourmet 1,000 shares of Common
Xxxxxx, Xxxxxxxxxx 00000 Coffee Corp. Common Stock 9
---------------------------------------------------------------------------------------------------------------------------
Edglo Enterprises, Inc. 100%
0000 Xxxxxxxxx Xxxxx Xxxxxx Xxxx'x Gourmet Coffees 50,000 shares of
Xxxxxx, Xxxxxxxxxx 00000 Franchising Corp. Common Stock 2
===========================================================================================================================
