Exhibit 10.19
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of ___________ __, 1997, made by
_________________ (the "Executive") in favor of Xxxxxxx'x Food Markets, a
Texas corporation (the "Company").
W I T N E S S E T H:
WHEREAS, in connection with the Management Stockholder's Agreement dated
as of _________ __, 1997 by and between the Company and the Executive (as
amended, supplemented or otherwise modified from time to time, the
"Stockholder's Agreement"), the Company has agreed to make a loan (the
"Loan") to the Executive for the acquisition of Purchase Stock (as defined in
the Stockholder's Agreement), to be evidenced by a note substantially in the
form of Exhibit A hereto (the "Note");
WHEREAS, the Executive will be the legal and beneficial owner of the
shares of Pledged Stock (as hereinafter defined) issued by the Company; and
WHEREAS, it is a condition precedent to the obligation of the Company to
make the Loan to the Executive that the Executive shall have executed and
delivered this Pledge Agreement to the Company.
NOW, THEREFORE, in consideration of the premises and to induce the
Company to make the Loan, the Executive hereby agrees with the Company, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined
in the Stockholder's Agreement or the Note, as the case may be, and used
herein shall have the meanings assigned to them in the Stockholder's
Agreement and the Note, respectively.
(a) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be amended, modified
or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in effect in the
State of New York.
"Collateral": the Pledged Stock and all Proceeds.
"Collateral Account": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Company.
"Default": any event that is or with the passage of time or the giving of
notice or both would be an Event of Default under the Note.
"Obligations": the collective reference to the unpaid principal of and
interest on the Note and all other obligations and liabilities of the
Executive to the Company (including, without limitation, interest accruing at
the then applicable rate provided in the Note after the maturity of the Loan
and interest accruing at the then applicable rate provided in the Note after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Executive,
whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding), whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with the Note and this Agreement or any other
document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, costs, expenses or otherwise.
"Person": any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
"Pledged Stock": the shares of capital stock listed on Schedule 1
hereto, together with all stock certificates received upon exercise of any
such options or rights of any nature whatsoever that may be issued or granted
by the Company to the Executive while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon or distributions
with respect thereto.
"Securities Act": the Securities Act of 1933, as amended.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Pledge; Grant of Security Interest. The Executive hereby delivers to
the Company all the Pledged Stock and hereby grants to the Company a first
security interest in the Collateral, as collateral security for the prompt
and complete
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payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
3. Stock Powers. Concurrently with the delivery to the Company of each
certificate representing one or more shares of Pledged Stock to the Company,
the Executive shall deliver an undated stock power covering such certificate,
duly executed in blank by the Executive with, if the Company so requests,
signature guaranteed.
4. Covenants. The Executive covenants and agrees with the Company that,
from and after the date of this Agreement until this Agreement is terminated
and the security interests created hereby are released:
(a) If the Executive shall (i) as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any reclassification,
increase or reduction of capital or any certificate issued in connection with
any reorganization), option or rights, whether in addition to, in
substitution of, as a conversion of, or in exchange for any shares of the
Pledged Stock, or otherwise in respect thereof or (ii) acquire ownership of
shares of Common Stock upon the exercise of stock options, the Executive
shall accept the same as the agent of the Company, hold the same in trust
for the Company, and deliver the same forthwith to the Company in the exact
form received, duly indorsed by the Executive to the Company, if required,
together with an undated stock power covering such certificate duly executed
in blank by the Executive and with, if the Company so requests, signature
guaranteed, to be held by the Company, subject to the terms hereof, as
additional collateral security for the Obligations.
(b) Without the prior written consent of the Company, the Executive
will not (1) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Collateral, (2) create, incur or permit
to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Collateral, or any interest therein, except for the
security interests created by this Agreement or (3) enter into any agreement
or undertaking restricting the right or ability of the Executive or the
Company to sell, assign or transfer any of the Collateral.
(c) The Executive shall maintain the security interest created by this
Agreement as a first, perfected security interest and shall defend such
security interest against claims and demands of all Persons whomsoever. At
any time and from time to time, upon the written request of the Company, and
at the sole
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expense of the Executive, the Executive will promptly and duly execute and
deliver such further instruments and documents and take such further actions
as the Company may reasonably request for the purposes of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or chattel paper shall be
immediately delivered to the Company, duly endorsed in a manner satisfactory
to the Company, to be held as Collateral pursuant to this Agreement.
(d) The Executive shall pay, and save the Company harmless from, any
and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
5. Cash Dividends; Voting Rights. Unless an Event of Default shall have
occurred and be continuing and the Company shall have given notice to the
Executive of the Company's intent to exercise its corresponding rights
pursuant to Section 6 below, the Executive shall be permitted to receive all
cash dividends paid in respect of the Pledged Stock and to exercise all
voting and corporate rights with respect to the Pledged Stock.
6. Rights of the Company. If an Event of Default shall occur and be
continuing and the Company shall give notice of its intent to exercise such
rights to the Executive the Company shall have the right to receive any and
all cash dividends paid in respect of the Pledged Stock and make application
thereof to the Obligations in such order as the Company may determine.
7. Remedies. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Company's election, the Company may apply all
or any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the Company may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Company may exercise, in addition to all other rights and remedies granted in
this Agreement and in any other instrument or agreement securing, evidencing
or relating to the Obligations, all rights and remedies of a secured party
under the Code. Without limiting the generality of the foregoing, the
Company, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law
referred to below) to or upon the Executive or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived),
may in
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such circumstances forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the
over-the-counter market, at any exchange, broker's board or office of the
Company or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Company shall have the
right upon any such public sale or sales, and, to the extent permitted by
law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in the
Executive, which right or equity is hereby waived or released. The Company
shall apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred in
respect thereof or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Company hereunder, including, without limitation, reasonable attorneys' fees
and disbursements of counsel to the Company, to the payment in whole or in
part of the Obligations, in such order as the Company may elect, and only
after such application and after the payment by the Company of any other
amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the Code, need the Company account for the surplus, if
any, to the Executive. To the extent permitted by applicable law, the
Executive waives all claims, damages and demands he may acquire against the
Company arising out of the exercise by the Company or the Executive of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.
The Executive shall remain liable for any deficiency if the proceeds of any
sale or other disposition of Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by the
Company to collect such deficiency.
8. Execution of Financing Statements. Pursuant to Section 9-402 of the
Code, the Executive authorizes the Company to file financing statements with
respect to the Collateral without the signature of the Executive in such form
and in such filing offices as the Company reasonably determines appropriate
to perfect the security interests of the Company under this Agreement. A
carbon, photographic or other reproduction of this Agreement shall be
sufficient as a financing statement for filing in any jurisdiction.
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9. Notices. All notices, requests and demands to or upon the Company or
the Executive to be effective shall be in writing (or by telex, facsimile or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (1) when delivered by hand or (2) if given by mail,
when deposited in the mails by certified mail, return receipt requested, or
(3) if by telex, facsimile or similar electronic transfer, when sent and
receipt has been confirmed, addressed to the Company or the Executive at its
address or transmission number for notices provided in section 25(b) of the
Stockholder's Agreement. The Company and the Executive may change their
addresses and transmission numbers for notices by notice in the manner
provided in this Section.
10. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Executive and the Company, provided that any provision of this Agreement
may be waived by the Company in a letter or agreement executed by the Company
or by telex or facsimile transmission from the Company.
(a) The Company shall not by any act (except by a written instrument
pursuant to paragraph 11 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on
the part of the Company, any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by
the Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company would otherwise
have on any future occasion.
(b) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
12. Section Headings. The section headings used in this Agreement are
for convenience of reference only and are not to
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affect the construction hereof or be taken into consideration in the
interpretation hereof.
13. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Executive and shall inure to the benefit of the
Company and their successors and assigns.
14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.
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[NAME OF EXECUTIVE]
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SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
