EXHIBIT 10.3
CONFORMED COPY
FOODBRANDS AMERICA, INC.
$320,000,000 Credit Agreement
dated as of
December 11, 1995
Pledge Agreement
PLEDGE AGREEMENT dated as of December 11, 1995, among
FOODBRANDS AMERICA, INC., a Delaware corporation (the
"Borrower"), each of the subsidiaries of the Borrower listed on
the signature pages hereof (individually, a "Subsidiary Pledgor"
and, collectively, the "Subsidiary Pledgors"; the Subsidiary
Pledgors, together with the Borrower, are referred to
individually as a "Pledgor" and collectively as the "Pledgors")
and CHEMICAL BANK, a New York banking corporation ("Chemical
Bank"), as collateral agent (the "Collateral Agent") for the
Secured Parties (as defined in the Credit Agreement referred to
below).
Reference is made to the Credit Agreement dated as of
December 11, 1995 (as amended or modified from time to time, the
"Credit Agreement"), among the Borrower, the financial
institutions party thereto, as lenders (the "Lenders"), Chemical
Bank, as syndication agent, documentation agent and
administrative agent (in such capacity, the "Administrative
Agent") for the Lenders and as issuing lender (in such capacity,
the "Issuing Lender"), and Citibank, N.A., as managing agent.
The Lenders have agreed to make Loans to the Borrower,
and the Issuing Lender has agreed to issue Letters of Credit for
the account of the Borrower pursuant to, and upon the terms and
subject to the conditions specified in, the Credit Agreement.
Each of the Subsidiary Pledgors has agreed to guarantee, among
other things, all the obligations of the Borrower under the
Credit Agreement. The obligations of the Lenders to make Loans
and of the Issuing Lender to issue Letters of Credit are
conditioned upon, among other things, the execution and delivery
by the Pledgors of a pledge agreement in the form hereof to
secure (a) the due and punctual payment of (i) the principal of
and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more date set
for prepayment or otherwise, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any
Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other
monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Pledgors to the Secured
Parties under the Credit Agreement and the other Loan Documents
and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Pledgors under or
pursuant to the Credit Agreement and the other Loan Documents
(all the obligations referred to in this clause (b) and in the
preceding clause (a) being collectively called the
"Obligations"). Capitalized terms used herein and not defined
herein shall have meanings assigned to such terms in the Credit
Agreement and the other Loan Documents.
Accordingly, each Pledgor and the Collateral Agent, on
behalf of itself and each Secured Party (and each of their
respective successors or assigns), agree as follows:
SECTION 1. Pledge. As security for the payment and
performance in full of the Obligations, each Pledgor transfers,
grants, bargains, sells, conveys, hypothecates, pledges, sets
over and delivers unto the Collateral Agent, and grants to the
Collateral Agent for the benefit of the Secured Parties a
security interest in:
(a) the shares of capital stock listed below the
name of such Pledgor on Schedule I, any shares of stock
obtained in the future by such Pledgor, the
certificates representing all such shares and interests
and all options and warrants for the purchase of
capital stock (the "Pledged Stock"),
(b) the general and limited partnership interests
and other rights in KPR Holdings, L.P., including
without limitation all interests in the profits and
losses of KPR Holdings, L.P. and the right, as a
general or limited partner, to receive distributions of
KPR Holdings, L.P. s assets, whether arising under the
terms of the Limited Partnership Agreement of KPR
Holdings, L.P. at law or in equity or otherwise, and
any right, title or interest in KPR Holdings, L.P. or
any other limited partnership or general partnership
obtained in the future by such Pledgor, the
certificates, if any, representing all such rights and
interests and all options and warrants for the purchase
of general or limited partnership interests (the
"Pledged Partnership Interests"),
(c) the membership interests in Xxxxxxxx Food
Service Company, L.L.C. ("DFSC") listed below the name
of such Pledgor on Schedule I and any membership
interests in DFSC or any other Subsidiary obtained in
the future by such Pledgor and the certificates
representing all such interests, if any, all of such
Pledgor s right, title and interest in, to and under
its respective percentage interest, shares or units as
a member including, without limitation, such Pledgor s
interest in (or allocation of) the profits, losses,
income, gains, deductions, credits or similar items of
DFSC s cash and other property, and all warrants and
options for the purchase of membership interests,
percentage interests, shares or units of DFSC or any
other limited liability company, whether arising under
the terms of the Articles of Organization of Xxxxxxxx
Foodservice Company, L.L.C. or any of the other
organizational documents (such documents being
hereinafter collectively referred to as the "Operating
Agreements") of DFSC or any other limited liability
company, at law, in equity or otherwise (collectively,
the "Pledged Membership Interests"),
(d) the promissory notes listed on Schedule I
hereto and any promissory notes issued in the future to
such Pledgor,
(e) all other property that may be delivered to
and held by the Collateral Agent pursuant to the terms
hereof,
(f) subject to Section 5, all payments of
principal or interest, dividends, cash, instruments and
other property from time to time received, receivable
or otherwise distributed, in respect of, in exchange
for or upon the conversion of the securities referred
to in clauses (a), (b), (c), (d) and (e) above,
(g) subject to Section 5, all rights and
privileges of such Pledgor with respect to the
securities and other property referred to in clauses
(a), (b), (c), (d), (e) and (f) above and
(h) all proceeds of any of the foregoing;
provided, however that the inerest of any Pledgor in IMI shall
not be subject to the pledge created hereby. The items referred
to in clauses (a) through (h) above, excluding any interest in
IMI, are collectively referred to herein as the "Collateral".
Upon delivery to the Collateral Agent, (a) any stock
certificates, certificates of limited or general partnership
interest, certificates of membership interest, percentage
interest, shares or units, other certificates, notes or other
securities now or hereafter included in the Collateral
(collectively, the "Pledged Securities") shall be accompanied by
stock powers duly executed in blank or other instruments of
transfer satisfactory to the Collateral Agent and by such other
instruments and documents as the Collateral Agent may reasonably
request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of
assignment duly executed by the applicable Pledgor and such other
instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities shall be
accompanied by a schedule describing the securities theretofore
and then being pledged hereunder, which schedule shall be
attached hereto as Schedule I and made a part hereof. Each
schedule so delivered shall supersede any prior schedules so
delivered.
TO HAVE AND TO HOLD the Collateral, together with all
right, title, interest, powers, privileges and preferences
pertaining or incidental thereto, unto the Collateral Agent, its
successors and assigns, for the ratable benefit of the Secured
Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral; Intercompany
Obligations. (a) Each Pledgor agrees promptly to deliver or
cause to be delivered to the Collateral Agent any and all Pledged
Securities, and any and all certificates or other instruments or
documents representing the Collateral.
(b) Each Pledgor will cause (i) any Indebtedness for
borrowed money in excess of $100,000 owed to such Pledgor by any
person (other than any such Indebtedness owed to the Borrower by
a Subsidiary Guarantor or owed to any Subsidiary Guarantor by the
Borrower or any other Subsidiary Guarantor) and (ii) all
Indebtedness for borrowed money owed to any Pledgor (other than
any such Indebtedness specified in the parenthetical in clause
(i) of this Section 2(b)) to the extent that the aggregate amount
of such Indebtedness that is not evidenced by promissory notes
exceeds $1,000,000, to be evidenced by a duly executed promissory
note or notes pledged and delivered to the Collateral Agent
pursuant to the terms hereof.
SECTION 3. Representations, Warranties and Covenants.
Each Pledgor represents, warrants and covenants, as to itself and
the Collateral pledged by it hereunder, to and with the
Collateral Agent that:
(a) the Pledged Stock represents that percentage
as set forth on Schedule I of the issued and
outstanding shares of each class of the capital stock
of the issuer with respect thereto, the Pledged
Partnership Interests represent that percentage as set
forth on Schedule I of the total equity of KPR
Holdings, L.P., and the Pledged Membership Interests
represent that percentage as set forth on Schedule I of
the total equity of DFSC;
(b) except for the security interest granted
hereunder, each Pledgor (i) is and will at all times
continue to be the direct owner, beneficially and of
record, of the Pledged Securities indicated on Schedule
I to be owned by such Pledgor, (ii) holds the same free
and clear of all Liens, (iii) will make no assignment,
pledge, hypothecation or transfer of, or create or
permit to exist any security interest in or other Lien
on, the Collateral, other than pursuant hereto, and
(iv) subject to Section 5, will cause any and all
Collateral, to the extent certificated, whether for
value paid by any Pledgor or otherwise, to be forthwith
deposited with the Collateral Agent and pledged or
assigned hereunder;
(c) each Pledgor (i) has the power and authority
to pledge the Collateral in the manner done or
contemplated and (ii) will defend its title or interest
thereto or therein against any and all Liens (other
than the Lien created by this Agreement), however
arising, of all persons whomsoever;
(d) no consent or approval of any Governmental
Authority or any securities exchange was or is
necessary for the validity of the pledge effected
hereby;
(e) by virtue of the execution and delivery by
the Pledgors of this Agreement, when the Pledged
Securities, certificates, instruments or other
documents representing or evidencing the Collateral are
delivered to the Collateral Agent in accordance with
this Agreement, or, in the case of Collateral
constituting uncertificated securities, when the steps
required by Articles 8 and 9 of the UCC have been taken
to perfect the Collateral Agent's Security Interest
therein, the Collateral Agent will obtain a valid and
perfected first lien upon and security interest in such
Pledged Securities as security for the payment and
performance of the Obligations;
(f) the pledge effected hereby is effective to
vest in the Collateral Agent, on behalf of the Secured
Parties, the rights of the Collateral Agent in the
Collateral as set forth herein;
(g) there are no restrictions upon the voting rights
associated with, or upon the transfer of, any of the Pledged
Securities; and
(h) this Agreement does not violate (1) the Operating
Agreements of DFSC or any other limited liability company
the interests in which are pledged hereby, (2) the
Partnership Agreement or any of the other organizational
documents of KPR Holdings, L.P. or any other partnership the
interests in which are pledged hereby, (3) any indenture,
mortgage, bank loan or credit agreement to which such
Pledgor, KPR Holdings, L.P. or DFSC is a party or by which
any of their respective properties or assets are bound.
SECTION 4. Registration in Nominee Name,
Denominations. The Collateral Agent, on behalf of the Secured
Parties, shall have the right (in its sole and absolute
discretion) to hold the Pledged Securities in its own name as
pledgee, the name of its nominee (as pledgee or as sub-agent) or
the name of the applicable Pledgor, endorsed or assigned in blank
or in favor of the Collateral Agent. The applicable Pledgor will
promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged
Securities registered in the name of such Pledgor. The
Collateral Agent shall at all times have the right to exchange
the certificates representing Pledged Securities for certificates
of smaller or larger denominations for any purpose consistent
with this Agreement.
SECTION 5. Voting Rights; Dividends and Interest; etc.
(a) Unless and until an Event of Default shall have occurred and
be continuing:
(i) The Pledgors shall continue to be
stockholders in the issuers of the Pledged Stock,
limited and general partners in KPR Holdings, L.P. and
members and managers of DFSC, as the case may be, and
shall be entitled to exercise any and all voting and/or
other consensual, partnership, managerial and
membership rights and powers accruing to an owner of
Pledged Securities or any part thereof for any purpose
consistent with the terms of this Agreement, the Credit
Agreement and the other Loan Documents; provided,
however, that such action would not materially and
adversely affect the rights inuring to a holder of the
Pledged Securities or the rights and remedies of any of
the Secured Parties under this Agreement or the Credit
Agreement or any other Loan Document or the ability of
the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and
deliver to each Pledgor, or cause to be executed and
delivered to such Pledgor, all such proxies, powers of
attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such
Pledgor to exercise the voting and/or other consensual,
partnership, managerial and membership rights and
powers it is entitled to exercise pursuant to
subparagraph (i) above and to receive the cash
dividends, distributions, interest and principal it is
entitled to receive pursuant to subparagraph (iii)
below.
(iii) Each Pledgor shall be entitled to receive
and retain any and all cash dividends, distributions,
interest and principal paid on the Pledged Securities
to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and
otherwise paid in accordance with, the terms and
conditions of the Credit Agreement, the other Loan
Documents and applicable laws. Other than pursuant to
the first sentence of this subparagraph, all noncash
dividends, distributions, interest and principal, and
all dividends, distributions, interest and principal
paid or payable in cash or otherwise in connection with
a partial or total liquidation or dissolution, return
of capital, capital surplus or paid-in surplus, and all
other distributions made on or in respect of the
Pledged Securities, whether paid or payable in cash or
otherwise, whether resulting from a subdivision,
combination or reclassification of the outstanding
capital stock or interests of the issuer of any Pledged
Securities (or applicable partnership or limited
liability company) or received in exchange for Pledged
Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such
issuer, partnership or limited liability company may be
a party or otherwise, shall be and become part of the
Collateral, and, if received by a Pledgor, shall not be
commingled by such Pledgor with any of its other funds
or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of
the Collateral Agent and shall be forthwith delivered
to the Collateral Agent in the same form as so received
(with any necessary endorsement).
(b) Upon the occurrence and during the continuance of
an Event of Default, all rights of each Pledgor to dividends,
distributions, interest and principal that such Pledgor is
authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right
and authority to receive and retain such dividend, distribution,
interest and principal payments. All dividends, distributions,
interest and principal received by any Pledgor contrary to the
provisions of this Section 5 shall be held in trust for the
benefit of the Collateral Agent, shall be segregated from other
property or funds of such Pledgor and shall be forthwith
delivered to the Collateral Agent upon demand in the same form as
so received (with any necessary endorsement). Any and all money
and other property paid over to or received by the Collateral
Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in a non-interest-bearing
account to be established by the Collateral Agent upon receipt of
such money or other property and shall be applied in accordance
with the provisions of Section 7. After all Events of Default
have been cured or waived, the Collateral Agent shall, within
five Business Days after all such Events of Default have been
cured or waived, repay to the Pledgors all cash dividends,
distributions, interest or principal that such Pledgors would
otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) above and which remain in such account.
(c) Upon the occurrence and during the continuance of
an Event of Default, at the Collateral Agent's option and
following written notice from the Collateral Agent to the
Pledgors (such written notice to be effective immediately upon
the giving thereof as provided below), all rights of the Pledgors
to exercise the voting, consensual, partnership, managerial and
membership rights and powers they are entitled to exercise
pursuant to paragraph (a)(i) of this Section 5, and the
obligations of the Collateral Agent under paragraph (a)(ii) of
this Section 5, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole
and exclusive right and authority to exercise such voting,
consensual, partnership, managerial and membership rights and
powers, including, without limitation, the right to act by
shareholder, partner, member or other interestholder consent.
Such authorization shall constitute an irrevocable voting proxy
from each Pledgor to the Collateral Agent or, at the Collateral
Agent's option, to the Collateral Agent's nominee.
SECTION 6. Remedies upon Default. Upon the occurrence
and during the continuance of an Event of Default, the Collateral
Agent shall have, in addition to any other rights given under
this Pledge Agreement or by law, all of the rights and remedies
with respect to the Collateral of a secured party under the
Uniform Commercial Code as in effect in the State of New York.
After the occurrence and during the continuance of an Event of
Default and following written notice to the applicable Pledgor or
Pledgors, the Collateral Agent (personally or through an agent)
is hereby authorized and empowered to transfer and register in
its name or in the name of its nominee the whole or any part of
the Collateral, to exercise all voting rights with respect
thereto, to collect and receive all cash dividends and other
distributions made thereon, and to otherwise act with respect to
the Collateral as though the Collateral Agent were the outright
owner thereof (and the sole member and manager of DFSC, in the
case of the Pledged Membership Interests), the Pledgors hereby
irrevocably constituting and appointing the Collateral Agent as
the proxy and attorney-in-fact of the Pledgors, with full power
of substitution to do so, such proxy becoming effective upon the
occurrence and during the continuance of an Event of Default and
following written notice thereof; provided, however, that the
Collateral Agent shall have no duty to exercise any such right or
to preserve the same and shall not be liable for any failure to
do so or for any delay in doing so. In addition, upon the
occurrence and during the continuance of an Event of Default,
subject to applicable regulatory and legal requirements, the
Collateral Agent may sell the Collateral, 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
as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account for investment
and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the
right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser
at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Pledgor, and each
Pledgor waives all rights of redemption, stay, valuation and
appraisal such Pledgor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter
enacted. Upon taking of possession of any Collateral hereunder,
the Collateral Agent shall deal with such Collateral in the same
manner as it deals with similar property for its own account.
Unless any of the Collateral threatens to decline
speedily in value or is or becomes of a type sold on a recognized
market, the Collateral Agent shall give the Pledgors 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,
commercial finance companies, insurance companies or other
financial institutions disposing of property similar to the
Collateral shall be deemed to be commercially reasonable.
Notwithstanding any provision to the contrary contained herein,
the Pledgors agree that any requirements of reasonable notice
shall be met if such notice is received by the applicable
Pledgors as provided below at least ten (10) days before the time
of the sale or disposition; provided, however, that the
Collateral Agent may give any shorter notice that is commercially
reasonable under the circumstances. Such notice, in the case of
a public sale, shall state the time and place for such sale and,
in the case of a sale at a 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 Collateral, or portion
thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice of such
sale. At any such sale, the Collateral, or portion thereof, to
be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall
determine not to do so, regardless of the fact that notice of
sale of such Collateral shall have been given. The Collateral
Agent 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 sale, and such
sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or
any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid in full by the
purchaser or purchasers thereof, but the Collateral Agent shall
not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may be sold again upon
like notice. At any public sale made pursuant to this Section 6,
any Secured Party may bid for or purchase, free from any right of
redemption, stay or appraisal on the part of any Pledgor (all
said rights being also waived and released), the Collateral or
any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to it from any
Pledgor as a credit against the purchase price, and it may, upon
compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Pledgor
therefor. For purposes hereof, (a) a written agreement to
purchase the Collateral or any portion thereof shall be treated
as a sale thereof, (b) the Collateral Agent shall be free to
carry out such sale pursuant to such agreement and (c) no Pledgor
shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may proceed by a
suit or suits at law or in equity to foreclose upon the
Collateral and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-
appointed receiver. Any sale pursuant to the provisions of this
Section 6 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-504(3) of the
Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions.
In addition to the foregoing rights, each Pledgor of
Pledged Partnership Interests consents and agrees to vote in
favor of the admission as a partner in the applicable partnership
of any purchaser of the Pledged Partnership Interests (upon the
written request of such purchaser delivered to such Pledgor in
accordance with the terms hereof) pursuant to this Section 6, and
agrees that such purchaser shall be a transferee of all of such
Pledgor's right, title and interest in the Pledge Partnership
Interests, including, without limitation, any voting or other
control rights.
SECTION 7. Application of Proceeds of Sale. The
proceeds of any sale of Collateral pursuant to Section 6, as well
as any Collateral consisting of cash, shall be applied by the
Collateral Agent as follows:
FIRST, to the payment of all costs and expenses
incurred by the Collateral Agent in connection with
such sale or otherwise in connection with this
Agreement, any other Loan Document or any of the
Obligations, including all court costs and the
reasonable fees, other charges and disbursements of its
agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any
other Loan Document on behalf of any of the Pledgors
and any other costs or expenses incurred in connection
with the exercise of any right or remedy hereunder or
thereunder;
SECOND, to the payment in full of the Obligations
owed to the Lenders and the Issuing Lender in respect
of the Loans made by them and outstanding and the
amounts owing in respect of any LC Disbursement, pro
rata as among the Lenders, and the Issuing Lender in
accordance with the amount of such Obligations owed to
them;
THIRD, to the payment and discharge in full of the
Obligations (other than those referred to above) pro
rata as among the Secured Parties in accordance with
the amount of such Obligations owed to them and to
provide cash collateral for the undrawn amount of all
Letters of Credit then outstanding; and
FOURTH, to the Pledgors, their successors or
assigns, or as a court of competent jurisdiction may
otherwise direct.
The Collateral Agent shall have absolute discretion as
to the time of application of any such proceeds, moneys or
balances in accordance with this Agreement. Upon any sale of the
Collateral by the Collateral Agent (including pursuant to a power
of sale granted by statute or under a judicial proceeding), the
receipt by the Collateral Agent or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of
the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the
purchase money paid over to the Collateral Agent or such officer
or be answerable in any way for the misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent.
(a) The Pledgors jointly and severally agree to pay upon demand
to the Collateral Agent the amount of any and all reasonable and
documented expenses, including the reasonable fees, other charges
and disbursements of its counsel and of any experts or agents,
that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Securities, (iii) the
exercise or enforcement of any of the rights of the Collateral
Agent hereunder or (iv) the failure by any Pledgor to perform or
observe any of the provisions hereof.
(b) Without limitation of their indemnification
obligations under the other Loan Documents, but in any event
subject to the limits set forth in Section 10.05 of the Credit
Agreement, the Pledgors jointly and severally agree to indemnify
the Collateral Agent and the Indemnitees against, and hold each
of them harmless from, any and all losses, claims, damages,
liabilities and related expenses, including reasonable and
documented counsel fees and expenses, incurred by or asserted
against any of them arising out of, in any way connected with, or
as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding
relating hereto or to the Collateral, whether or not any
Indemnitee is a party thereto, provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses have
resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security
Documents. The provisions of this Section 8 shall remain
operative and in full force and effect regardless of the
termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the
Obligations, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Collateral Agent or any
other Secured Party. All amounts due under this Section 8 shall
be payable on written demand therefor and shall bear interest at
the Default Rate (as defined in the Credit Agreement).
SECTION 9. Collateral Agent Appointed Attorney-in-
Fact. Each Pledgor appoints the Collateral Agent the attorney-
in-fact of such Pledgor for the purpose of carrying out the
provisions of this Agreement and taking any action and executing
any instrument that the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Collateral Agent shall have the
right, upon the occurrence and during the continuance of an Event
of Default, with full power of substitution either in the
Collateral Agent's name or in the name of any Pledgor, to ask
for, demand, xxx for, collect, receive and give acquittance for
any and all moneys due or to become due and under and by virtue
of any Collateral, to endorse checks, drafts, orders and other
instruments for the payment of money payable to such Pledgor
representing any interest or dividend or other distribution
payable in respect of the Collateral or any part thereof or on
account thereof and to give full discharge for the same, to
settle, compromise, prosecute or defend any action, claim or
proceeding with respect thereto, to sell, assign, endorse,
pledge, transfer and to make any agreement respecting, or
otherwise deal with, the same, and to exercise all rights of a
shareholder, partner, member and manager (in each case upon
election of the Collateral Agent) such as all voting, consent,
managerial and other member and partnership rights, and to
arrange for the transfer of all or any part of the Pledged
Collateral on the books of the applicable issuer, partnership or
limited liability company to the name of the Collateral Agent or
the Collateral Agent's nominee; provided, however, that nothing
herein contained shall be construed as requiring or obligating
the Collateral Agent to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received
by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or
any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent
and the other Secured Parties shall be accountable only for
amounts actually received as a result of the exercise of the
powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to
any Pledgor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
SECTION 10. Waivers, Amendment. (a) No failure or
delay of the Collateral Agent in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of
the Collateral Agent hereunder and of the other Secured Parties
under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise
have. No waiver of any provisions of this Agreement or consent
to any departure by any Pledgor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No
notice or demand on any Pledgor in any case shall entitle such
Pledgor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to a written
agreement entered into between the Pledgors and the Collateral
Agent, with the prior written consent of the Required Lenders.
SECTION 11. Securities Act, etc. In view of the
position of the Pledgors in relation to the Pledged Securities,
or because of other current or future circumstances, a question
may arise under the Securities Act of 1933, as now or hereafter
in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities
Laws") with respect to any disposition of the Pledged Securities
permitted hereunder. The Pledgors understand that compliance
with the Federal Securities Laws might very strictly limit the
course of conduct of the Collateral Agent if the Collateral Agent
were to attempt to dispose of all or any part of the Pledged
Securities, and might also limit the extent to which or the
manner in which any subsequent transferee of any Pledged
Securities could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral
Agent in any attempt to dispose of all or part of the Pledged
Securities under applicable Blue Sky or other state securities
laws or similar laws analogous in purpose or effect. The
Pledgors recognize that in light of the foregoing restrictions
and limitations the Collateral Agent may, with respect to any
sale of the Pledged Securities, limit the purchasers to those who
will agree, among others things, to acquire such Pledged
Securities for their own account, for investment, and not with a
view to the distribution or resale thereof. The Pledgors
acknowledge and agree that in light of the foregoing restrictions
and limitations, the Collateral Agent, in its sole and absolute
discretion, (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such
Pledged Securities or part thereof shall have been filed under
the Federal Securities Laws and (b) may approach and negotiate
with a single potential purchaser to effect such sale. The
Pledgors acknowledge and agree that any such sale might result in
prices and other terms less favorable to the seller than if such
sale were a public sale without such restrictions. In the event
of any such sale, the Collateral Agent shall incur no
responsibility or liability for selling all or any part of the
Pledged Securities at a price that the Collateral Agent, in its
sole and absolute discretion, may in good xxxxx xxxx reasonable
under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale
were deferred until after registration as aforesaid or if more
than a single purchaser were approached. The provisions of this
Section 11 will apply notwithstanding the existence of a public
or private market upon which the quotations or sales prices may
exceed substantially the price at which the Collateral Agent
sells.
SECTION 12. Registration, etc. Each Pledgor agrees
that, upon the occurrence and during the continuance of an Event
of Default hereunder, if for any reason the Collateral Agent
desires to sell any of the Pledged Securities at a public sale,
it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its best efforts to take or
to cause the issuer of such Pledged Securities (or the applicable
partnership or limited liability company) to take such action and
prepare, distribute and/or file such documents, as are required
or advisable in the reasonable opinion of counsel for the
Collateral Agent to permit the public sale of such Pledged
Securities. Each Pledgor further agrees to indemnify, defend and
hold harmless the Collateral Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates
and controlling persons from and against all loss, liability,
expenses, costs of counsel (including, without limitation,
reasonable and documented fees and expenses to the Collateral
Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss,
liability, expense or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any
prospectus (or any amendment or supplement thereto) or in any
notification or offering circular, or arises out of or is based
upon any alleged omission to state a material fact required to be
stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused
by any untrue statement or omission based upon information
furnished in writing to any Pledgor or the issuer of such Pledged
Securities by the Collateral Agent or any other Secured Party
expressly for use therein. Each Pledgor further agrees, upon
such written request referred to above, to use its best efforts
to qualify, file or register, or cause the issuer of such Pledged
Securities to qualify, file or register, any of the Pledged
Securities under the Blue Sky or other securities laws of such
states as may be requested by the Collateral Agent and keep
effective, or cause to be kept effective, all such
qualifications, filings or registrations. The Pledgors will bear
all costs and expenses of carrying out their obligations under
this Section 12. The Pledgors acknowledge that there is no
adequate remedy at law for failure by them to comply with the
provisions of this Section 12 and that such failure would not be
adequately compensable in damages, and therefore agree that their
agreements contained in this Section 12 may be specifically
enforced.
SECTION 13. Security Interest Absolute. All rights of
the Collateral Agent hereunder, the grant of a security interest
in the Collateral and all obligations of the Pledgors hereunder
shall be absolute and unconditional irrespective of (a) any lack
of validity or enforceability of the Credit Agreement, any other
Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent
to any departure from the Credit Agreement, any other Loan
Document, any other agreement or instrument relating to any of
the foregoing, (c) any exchange, release or nonperfection of any
other collateral, or any release or amendment or waiver of or
consent to or departure from any guaranty, for all or any of the
Obligations or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Pledgor
in respect of the Obligations or in respect of this Agreement
(other than the indefeasible payment in full of all the
Obligations).
SECTION 14. Termination or Release. (a) This
Agreement and the security interests granted hereby shall
terminate when all the Obligations have been indefeasibly paid in
full in cash and the Lenders have no further commitment to lend
under the Credit Agreement, the LC Exposure and KPR LC Exposure
have been reduced to zero and the Issuing Lender has no further
obligation to issue Letters of Credit under the Credit Agreement.
(b) In connection with any termination or release
pursuant to paragraph (a), the Collateral Agent shall execute and
deliver to such Pledgor, at such Pledgor's expense, all documents
that such Pledgor shall reasonably request to evidence such
termination or release and shall return any and all Collateral in
the Collateral Agent's possession. Any execution and delivery of
documents pursuant to this Section 14 shall be without recourse
to or warranty by the Collateral Agent.
SECTION 15. Notices. All communications and notices
hereunder shall be in writing and given as provided in Section
10.01 of the Credit Agreement.
SECTION 16. Further Assurances. Each Pledgor agrees
to do such further acts and things, and to execute and deliver
such additional conveyances, assignments, agreements and
instruments, as the Collateral Agent may at any time reasonably
request in connection with the administration and enforcement of
this Agreement or with respect to the Collateral or any part
thereof or in order better to assure and confirm unto the
Collateral Agent its rights and remedies hereunder.
SECTION 17. Binding Agreement; Assignments. Whenever
in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns
of such party; and all covenants, promises and agreements by or
on behalf of the Pledgors that are contained in this Agreement
shall bind and inure to the benefit of their respective
successors and assigns. This Agreement shall become effective as
to any Pledgor when a counterpart hereof executed on behalf of
such Pledgor shall have been delivered to the Collateral Agent
and a counterpart hereof shall have been executed on behalf of
the Collateral Agent, and thereafter shall be binding upon such
Pledgor and the Collateral Agent and their respective successors
and assigns, and shall inure to the benefit of such Pledgors, the
Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that no Pledgor shall
have the right to assign its rights or obligations hereunder or
any interest herein or in the Collateral (and any such attempted
assignment shall be void), except as expressly contemplated by
this Agreement or the other Loan Documents. It shall not be a
condition to the effectiveness of this Agreement against any
Pledgor that any other Pledgor shall have executed this
Agreement.
SECTION 18. Survival of Agreement; Severability.
(a) All covenants, agreements, representations and warranties
made by the Pledgors herein and in the certificates or other
instruments prepared, delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the making by the Lenders of
the Loans and the issuance of the Letters of Credit by the
Issuing Lender, regardless of any investigation made by the
Secured Parties or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued
interest on any Loan or any other fee or amount payable under any
this Agreement or any other Loan Document is outstanding and
unpaid and as long as the Commitments have not been terminated.
(b) If any one or more of the provisions contained in
this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 19. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together,
shall constitute but one instrument, and shall become effective
as provided in Section 17.
SECTION 21. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement
shall be applicable to this Agreement.
SECTION 22. Jurisdiction; Consent to Service of
Process. (a) Each Pledgor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may
be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right
that the Collateral Agent or any other Secured Party may
otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Pledgor or its
properties in the courts of any jurisdiction.
(b) Each Pledgor irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the other Loan Documents in any New
York State or Federal court. Each of the parties hereto
irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in
Section 15. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 23. Waiver of Jury Trial. Each party hereto
waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection
with this Agreement. Each party hereto (a) certifies that no
representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would
not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section.
SECTION 24. Additional Pledgors. Pursuant to Section
6.10 of the Credit Agreement, certain Subsidiaries are required
to enter into this Agreement as Pledgors within the applicable
time period specified by the Credit Agreement. Upon execution
and delivery, after the date hereof, by the Collateral Agent and
a subsidiary of an instrument in the form of Annex 1, such
subsidiary shall become a Subsidiary Pledgor hereunder with the
same force and effect as if originally named as a Subsidiary
Pledgor herein. The execution and delivery of any instrument
adding an additional Pledgor as a party to this Agreement shall
not require the consent of any Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force
and effect notwithstanding the addition of any new Pledgor as a
party to this Agreement.
SECTION 25. Headings. Section headings used herein
are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Pledge Agreement as of the day and year first above
written.
FOODBRANDS AMERICA, INC.
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
RKR-GP, INC.
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
CONTINENTAL DELI FOODS, INC.
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXXXXX SPECIALTY BRANDS COMPANY
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
PAFCO IMPORTING COMPANY, INC.,
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
NATIONAL SERVICE CENTER, INC.,
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXXXXX FOOD SERVICE COMPANY,
L.L.C.
by
CONTINENTAL DELI FOODS, INC.,
manager
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
KPR HOLDINGS, L.P.
by
RKR-GP, INC., general partner
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXXX CERTIFIED EXPRESS, INC.,
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
FBAI INVESTMENTS CORPORATION,
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
XXXXXXX PACKING CO., INC.
/S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Vice President
CHEMICAL BANK, as Collateral Agent,
/S/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Managing Director
