EXHIBIT 10.26
REPAYMENT AND STOCK PLEDGE AGREEMENT
This Repayment and Stock Pledge Agreement (this "Agreement" or "Pledge
Agreement") is made as of October 2, 2001 between Fresh Enterprises, Inc., a
California corporation ("Pledgee"), and Xxxxxx X. Xxxxx ("Pledgor").
Recitals
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A. Pursuant to Pledgor's purchase of shares of Pledgee's Series C
Convertible Preferred Stock ("Series C Stock") pursuant to that certain Stock
Purchase Agreement dated the date hereof (the "Purchase Agreement"), between
Pledgor, Pledgee and the other purchasers named therein, and Pledgor's payment
for such shares with monies advanced pursuant to that certain promissory note
executed by Pledgor in favor of the Pledgee dated the date hereof (the "Note"),
Pledgor has purchased 3,686 shares of Series C Stock (the "Shares") at a price
of $9.25 per share, for a total purchase price of $34,095.50.
B. It is a condition precedent to the extension of credit pursuant to the
Note that the Pledgor shall have executed and delivered this Pledge Agreement in
favor of the Pledgee.
NOW, THEREFORE, in consideration of the foregoing and for other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto do hereby agree as follows:
1. Creation and Description of Security Interest. Pledgor hereby grants a lien
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on and pledges all of the Shares (herein sometimes referred to as the
"Collateral") represented by certificate number C-2 duly endorsed in blank or
with executable stock powers in form and substance satisfactory to Pledgee, and
herewith delivers said certificate to the Secretary of Pledgee (the "Escrow
Agent"), who shall hold said certificate subject to the terms and conditions of
this Pledge Agreement.
The pledged stock shall be held by the Escrow Agent as security for the
repayment of the Note, and any costs and expenses incurred in the enforcement or
attempted enforcement of the Note, and any extensions or renewals thereof, and
the Escrow Agent shall not encumber, sell or otherwise dispose of such Shares
except in accordance with the provisions of this Pledge Agreement.
2. Pledgor's Representations and Covenants. Pledgor represents and covenants
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to Pledgee, its successor and assigns, as follows:
(a) Pledgor will pay the principal sum of the Note secured hereby, together
with interest thereon, at the time and in the manner provided in the Note.
(b) The Shares are free of all other encumbrances, defenses and liens
(other than the lien granted hereunder and encumbrances created under the
Amended and Restated Shareholders' Agreement dated the date hereof among Pledgee
and its shareholders (the "Shareholders' Agreement")), and Pledgor will not
encumber or allow to be encumbered the Shares without the prior written consent
of Pledgee or enter into any agreement that could restrict Pledgee's exercise of
its rights hereunder or under the Note.
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(c) Pledgor shall pay, prior to the delinquency date, all taxes, liens,
assessments and other charges levied against the Collateral, and in the event
Pledgor fails to do so, Pledgee shall have the right, but not the obligation, to
pay all or any portion of such taxes and charges without contesting the validity
or legality thereof. Any payment made by Pledgee pursuant to this Section 2(c)
shall become part of the indebtedness of Pledgor secured hereunder, and until
paid by Pledgor, shall bear interest at the rate per annum set forth in the
Note.
3. Voting Rights. During the term of this pledge, Pledgor shall vote the
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Shares pledged hereunder solely in accordance with the provisions of the
Shareholders' Agreement.
4. Stock Adjustments. In the event during the term of this Agreement of any
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stock dividend, reclassification, readjustment or other changes declared or made
in the capital structure of Pledgee, all new, substituted and additional shares
or other securities issued by reason of any such change shall be delivered to
and held by the Pledgee under the terms of this Pledge Agreement in the same
manner as the Shares originally pledged hereunder. In the event of substitution
of such securities, Pledgor, Pledgee and Escrow Agent shall cooperate and
execute such documents as are reasonable so as to provide for the substitution
of such Collateral and, upon such substitution, references to "Shares" in this
Pledge Agreement shall include the substituted shares of capital stock of
Pledgor as a result thereof.
5. Warrants and Rights. In the event that, during the term of this Agreement,
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subscription warrants or other rights or options shall be issued by way of
dividend or other distribution on the Shares, such rights, warrants and options
shall be the property of Pledgor and, if exercised by Pledgor, all new stock or
other securities so acquired by Pledgor as it relates to the Shares then held by
Pledgee shall be immediately delivered to Pledgee, to be held under the terms of
this Agreement in the same manner as the Shares pledged hereunder.
Notwithstanding the foregoing, the provisions of this Section 5 shall not apply
to stock or other securities acquired by Pledgor pursuant to Pledgor's
preemptive rights under the Shareholders' Agreement.
6. Repayment. Pledgor hereby agrees that at any time if Borrower shall have
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received any cash payment or other distribution in respect of, or upon transfer,
sale or other disposition of, the Shares, then and in each such case, Pledgor
shall immediately deliver to Pledgee such amount as partial or full payment of
principal and interest on the Note.
7. Default. Pledgor shall be deemed to be in default of the Note and of this
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Pledge Agreement upon the occurrence of any of the following events (each such
event, an "Event of Default"):
(a) Payment of principal or interest on the Note shall be delinquent for a
period of 30 days or more beyond the due date thereof; or
(b) Pledgor fails to perform any of the covenants or other agreements set
forth in this Agreement for a period of 10 days after written notice thereof; or
(c) Any representation or warranty herein shall be untrue in any material
respect; or
(d) Pledgee shall cease to have a valid perfected first priority lien on
all or any part of the Collateral.
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8. Pledgee's Rights Upon an Event of Default.
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(a) In the case of an Event of Default, Pledgee shall have the right to
accelerate payment of the Note upon notice to Pledgor, and Pledgee shall
thereafter be entitled to pursue all remedies available to a secured party under
the California Uniform Commercial Code in effect from time to time (whether or
not applicable to the Collateral) or available at law or in equity or otherwise.
(b) In the case of an Event of Default, in addition to any other rights or
remedies otherwise available, Pledgee may, without notice and at its option,
with respect to any Collateral which shall then be in, or shall thereafter come
into, the possession or custody of Pledgee, Pledgee may sell or cause the same
to be sold at any broker's board or at any public or private sale, in one or
more sales or lots, at such price or prices as Pledgee may deem best, for cash
or on credit or for future delivery, without assumption of any credit risk. The
purchaser of any or all Collateral so sold shall thereafter hold the same
absolutely, free from any lien, encumbrance or right of Pledgor of any kind
whatsoever. Unless any of the Collateral threatens to decline speedily in value
or is or becomes of a type sold on a recognized market, Pledgee will give
Pledgor reasonable notice of the time and place of any public sale thereof, or
of the time after which any private sale or other intended disposition is to be
made. Any sale of the Collateral conducted in conformity with reasonable
commercial practices of banks, insurance companies, commercial finance companies
or other financial institutions disposing of property similar to the Collateral
shall be deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is mailed to the Pledgor at least ten (10)
days before the time of the sale or disposition. Any other requirement of
notice, demand or advertisement for sale is, to the extent permitted by law,
waived. Pledgee may, in its own name or in the name of a designee or nominee,
buy any of the Collateral at any public sale and, if permitted by applicable
law, at any private sale. All expenses (including court costs and attorneys'
fees, expenses and disbursements) of, or incident to, the enforcement of any of
the provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Collateral.
(c) Pledgee shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to register such securities for
public sale under the Securities Act of 1933, as amended (the "Securities Act"),
or under any other applicable securities laws. In view of the fact that the
Securities Act and other applicable securities laws may impose certain
restrictions on the method by which a sale of the Collateral may be effected,
Pledgor agrees that upon the occurrence of an Event of Default, Pledgee may,
from time to time, attempt to sell all or any part of the Collateral by means of
a private sale, restricting the prospective purchasers to those who will
represent and agree that such purchaser is an accredited investor within the
meaning of the Securities Act and that such purchaser is purchasing for
investment only and not for distribution. Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable to Pledgor than those
obtainable through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration statement under
the Securities Act) and, notwithstanding such circumstances, Pledgor agrees that
any such private sale shall be deemed to have been made in a commercially
reasonable manner and that Pledgee shall have no obligation to engage in public
sales and no obligation to delay the sale of any Collateral for the period of
time necessary to permit the registration thereof for a form of public sale
requiring registration under the Securities Act or under any other applicable
securities
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laws. Pledgor waives any claims against Pledgee arising by reason of the fact
that the price at any private sale was less than the price that might have been
obtained at a public sale, even if Pledgee shall accept the first offer received
and does not offer the Collateral to more than one prospective purchaser.
9. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
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withdraw, pledge, substitute, grant any options in or otherwise dispose of all
or any part of the Collateral without the prior written consent of Pledgee.
10. Term. The pledge of Shares set forth herein shall continue until the
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indefeasible payment in full in cash of all indebtedness secured hereby, at
which time the Shares shall be promptly delivered to Pledgor, without any
representation, warranty or covenant thereto or any recourse in respect thereof.
11. Insolvency. Pledgor agrees that if a bankruptcy or insolvency proceeding is
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instituted by or against him, or if a receiver is appointed for the property of
Pledgor, or if Pledgor makes an assignment for the benefit of creditors, or the
Pledgor shall take any action in furtherance of any of the foregoing, or the
Pledgor shall generally not, or shall be unable to, or shall admit in writing
his inability to, pay his debts as they become due, the entire amount unpaid on
the Note shall become immediately due and payable, and Pledgee may proceed as
provided in the case of an Event of Default.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree that the
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enforceability or invalidity of any provision or provisions of this Agreement
shall not render any other provision or provisions herein contained
unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the terms of
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this Agreement shall be binding on their respective permitted successors and
assigns, and that the term "Pledgor" and the term "Pledgee" as used herein shall
be deemed to include, for all purposes, the respective designees, successors,
assigns, heirs, executors and administrators. Pledgor shall not assign or
otherwise transfer all or any of his rights and obligations hereunder without
the prior written consent of Pledgee, in its sole discretion. This Agreement
shall be freely assignable by Pledgee.
14. Defined Terms. Capitalized terms used herein without definition shall have
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the meanings ascribed to such terms under the Purchase Agreement.
15. Governing Law. This Pledge Agreement shall be interpreted and governed by
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the internal laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Repayment and
Stock Pledge Agreement as of the day and year first above written.
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"PLEDGOR" /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
[ILLEGIBLE]
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Address
[ILLEGIBLE]
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"PLEDGEE" FRESH ENTERPRISES, INC.,
a California corporation
By: /s/ Xxxx Xxxxxxxxxx
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Name: Xxxx Xxxxxxxxxx
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Title: CEO
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