STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (the "Agreement") is made and
entered into this ___ day of January, 2002, by and between
Seaboard Flour Corporation, a Delaware corporation (the
"Pledgor"), and Seaboard Corporation, a Delaware corporation (the
"Pledgee").
WITNESSETH:
WHEREAS, the Pledgor is the beneficial owner of One Hundred
Thousand (100,000) shares of the common voting stock of Pledgee
(the "Pledged Shares") represented in the corporate records of
Pledgee by certificate No. 1505; and
WHEREAS, concurrently with the execution of this Agreement,
the Pledgor is executing and delivering to the Pledgee a
promissory note (together with all renewals and extensions
thereof, the "Note") in the face amount of Nine Million One
Hundred Three Thousand Five Hundred Eighteen and 29/100 Dollars
($9,103,518.29), together with interest on all principal amounts
outstanding thereunder, and any other obligations or advances
owed by Pledgor to Pledgee, now or in the future, including all
applicable interest (such amounts, the "Obligations"); and
WHEREAS, the Pledgee desires to secure the repayment of the
Obligations by the pledge of the Pledged Shares upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements herein contained, the Pledgor and
Pledgee hereby agree as follows:
1. Pledge. As security for the due and punctual payment of all
amounts due and payable pursuant to the Note and the Obligations,
together with accrued interest thereon, the Pledgor hereby
pledges, hypothecates, assigns, transfers, sets over and grants
to the Pledgee, its successors and assigns a security interest in
and lien upon all of the Pledgor's right, title and interest in
and to the Pledged Shares, as identified on the attached Schedule
1. Concurrently herewith, the Pledgor has delivered to the
Pledgee the Pledged Shares, together with the attached stock
power duly endorsed in blank. Said certificate and the Pledged
Shares shall be held and disposed of by the Pledgee in accordance
with the terms and conditions of this Agreement. The Pledgee is
hereby authorized with respect to the Pledged Shares, whether or
not there has been any default in the payment or the performance
of any obligation secured by the Pledged Shares, to endorse the
Pledged Shares in the name of the Pledgor and cause any part or
all of the Pledged Shares to be transferred of record into the
Pledgee's name or the name of its nominee. During the term of
the pledge made hereunder, any additional shares of stock,
rights, warrants, securities or other property issued or
distributed upon or in respect of any of the Pledged Shares,
including any and all such property issued or distributed as the
result of any stock dividends, stock splits, reverse stock
splits, recapitalizations, reorganizations, exchanges or
substitutions or other distribution, whether in liquidation or
otherwise, shall be immediately pledged, delivered, paid and set
over by the Pledgor to the Pledgee hereunder as additional
collateral and shall constitute Pledged Shares for purposes of
this Agreement. Pledgor's delivery of such additional shares of
stock, rights, warrants, securities and other property shall be
deemed to constitute the delivery and pledge thereof to the
Pledgee pursuant to this Agreement.
2. Margin Requirements. Pledgor shall maintain a 25% margin
(equivalent to a 75% loan to value or 133% collateral coverage)
as long as the outstanding Obligations do not exceed
$8,000,000.00. Pledgor shall maintain a 35% margin (equivalent
to a 65% loan to value or 153% collateral coverage) as long as
the outstanding Obligations exceed $8,000,000.00 but do not
exceed $10,000,000.00. Pledgor shall maintain a 50% margin
(equivalent to a 50% loan to value or 200% collateral coverage)
as long as the outstanding Obligations exceed $10,000,000.00. If
at any time hereunder the above-stated margins are not
maintained, Pledgor shall promptly pay down the outstanding
Obligations or provide additional shares of Pledgee (which shall
constitute Pledged Shares hereunder) or other collateral
acceptable to Pledgee, such that the margins are maintained.
3. Representations, Warranties and Covenants. The Pledgor
represents, warrants and agrees as follows:
a. The Pledgor has the unrestricted right, power and authority
to execute this Agreement, to perform the Pledgor's obligations
hereunder and to transfer and create a security interest in the
Pledged Shares in the manner and for the purpose contemplated
hereby.
b. The pledge and delivery of the Pledged Shares pursuant to
this Agreement create a valid and perfected first priority
security interest in the Pledged Shares in favor of the Pledgee.
4. Events of Default. The occurrence of any one or more of the
following events shall constitute a default hereunder (each an
"Event of Default"):
a. the Pledgor's default in the performance of any of the
terms, agreements or covenants of this Agreement and the
expiration of thirty (30) days' notice and opportunity to cure
such Event of Default; or
b. an event of default as specifically defined in the Note or
any other default with regard to the Obligations; or
c. the dissolution, termination of existence, insolvency,
suspension of active business or business failure of or by the
Pledgor; or
d. the making of any general assignment for the benefit of
creditors by the Pledgor or the commencement by the Pledgor of a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect; or
e. the appointment of a receiver, trustee or other similar
official for all or substantially all of the Pledgor's property
or assets, or the filing of a bankruptcy petition against the
Pledgor in a court of competent jurisdiction that commences an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, which appointment
or petition is not contested by the Pledgor, or which appointment
or petition is not removed or dismissed within ninety (90) days;
or
f. acceleration of the maturity of any liability or obligation
of the Pledgor to anyone other than the Pledgee, which
acceleration has a material adverse effect on the Pledgee; or
g. service of any warrant of attachment or garnishment or the
making or issuance of any lien, levy or similar process on or
with respect to the Pledgor which has a material adverse effect
on the Pledgee and which remains in effect for, or is not
removed, dismissed or vacated within, ninety (90) days.
5. Dividends and Voting Rights. So long as no Event of Default
shall have occurred and be continuing, the Pledgor shall be
entitled (a) to receive any and all cash dividends declared and
paid in respect of the Pledged Shares (other than liquidating
dividends) and (b) to exercise any and all voting and other
consensual rights in respect thereof. The Pledgor shall give the
Pledgee at least five (5) days' prior written notice of the
manner in which it intends to exercise any such right or the
reasons for refraining from exercising such right. So long as no
Event of Default shall have occurred and be continuing, if the
Pledged Shares or any part thereof shall have been transferred
into the name of the Pledgee or its nominee, upon the written
request of the Pledgor, the Pledgee or its nominee shall execute
and deliver to the Pledgor appropriate powers of attorney or
proxies to vote the Pledged Shares.
6. The Pledgee's Remedies Upon Default. If any Event of
Default shall have occurred, the Pledgee may do any one or more
of the following in such order as it may elect:
a. cause any or all of the Pledged Shares to be transferred
into its name or that of its nominee and obtain registration of
such transfer or transfers, regardless of whether such action
effects a foreclosure of the pledge evidenced hereby, without
relieving the Pledgor of its obligations under Article Nine of
the Uniform Commercial Code, as enacted in the State of Kansas
(the "Uniform Commercial Code"), the Pledgor hereby irrevocably
constituting and appointing the Pledgee and any nominee of the
Pledgee the attorney-in-fact of the Pledgor for such purpose,
with full power of substitution; and
b. vote any or all of the Pledged Shares or revoke any or all
proxies or powers of attorney given to the Pledgor and give any
or all consents, waivers and ratifications in respect thereof and
otherwise act with respect thereto as though it were the outright
owner thereof, the Pledgor hereby irrevocably constituting and
appointing the Pledgee and any nominee of the Pledgee the proxy
and attorney-in-fact of the Pledgor for such purpose, with full
power of substitution; and
c. receive all dividends and all other distributions of any
kind on any or all of the Pledged Shares.
7. Other Rights and Remedies. The rights and remedies afforded
to the Pledgee hereunder shall be cumulative and in addition to
and not in limitation of any rights and remedies which the
Pledgee may have under applicable law, including the Uniform
Commercial Code. The exercise or partial exercise of any right
or remedy of the Pledgee hereunder or under applicable law shall
not preclude or prejudice the further exercise of that right or
remedy or the exercise of any other right or remedy of the
Pledgee.
8. Waiver. No delay or omission on the part of the Pledgee in
exercising any right hereunder shall operate as a waiver of such
right or any other right hereunder or under any instrument or
agreement evidencing or relating to any of the obligations
secured hereby. A waiver on any one occasion shall not be
construed as a bar or waiver of any right or remedy on any future
occasion.
9. Return of Pledged Shares. Promptly following the receipt by
the Pledgee of payment in full of the Note in accordance with its
terms, the Pledgee will, upon written demand by the Pledgor,
redeliver to the Pledgor the Pledged Shares, any stock powers
related thereto and any other collateral held pursuant to this
Agreement, without recourse to the Pledgee.
10. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given on the date of service if
personally served on the party to whom such communication is to
be given, or on the third day after mailing if mailed to the
party to whom such communication is to be given by first class
mail, postage prepaid, and properly addressed as follows:
The Pledgor:
Seaboard Flour Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxxxxxxx 00000
Attn: X. X. Xxxxxx
The Pledgee:
Seaboard Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxxxx Xxxxxxx, Xxxxxx 00000
Attn: Legal Affairs
11. Expenses. The Pledgor will upon demand pay to the Pledgee
the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts
and agents, whether or not involving a case or proceeding before
any federal or state court, that the Pledgee may incur in
connection with (a) the administration of this Agreement, (b) the
custody or preservation of, or the sale of, collection from or
other realization upon, any of the Pledged Shares, (c) the
exercise or enforcement of any of the rights of the Pledgee
hereunder, or (d) the failure by the Pledgor to perform or
observe any of the provisions hereof.
12. Indemnification. Neither the Pledgee, nor any director,
officer, agent or employee of the Pledgee, shall be liable for
any action taken or omitted to be taken by it or them hereunder
or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Pledgor hereby agrees to
indemnify and hold harmless the Pledgee and its officers,
directors, employees, agents, representatives, successors and
assigns from and against any and all liability incurred by any of
them hereunder or in connection herewith, unless such liability
shall be due to its or their own gross negligence or willful
misconduct.
13. Binding. This Agreement and all of the provisions hereof
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective legal representatives,
successors and assigns and may be amended only by a written
instrument signed by each of the parties hereto.
14. Continuing Pledge. The pledge made hereunder is of a
continuing nature and applies to any and all debt of the Pledgor
owing to the Pledgee under the Note or the Obligations, and the
Pledgee may continue to make advances to the Pledgor at any time
and from time to time in reliance upon the pledge made hereunder
until the Pledgee actually receives written notice from the
Pledgor of the discontinuance hereof in respect of any debt
arising or incurred by the Pledgor under the Note or any other
Obligations; provided, however, that the receipt of such notice
shall not in any way whatsoever impair, affect, release or
discharge the Pledgee's lien on or rights with respect to any of
the Pledged Shares or impair or affect in any way any of the
Pledgee's rights, powers, remedies or authority hereunder in
respect of any debt or obligation under the Note or any other
Obligations arising or incurred prior to the Pledgee's receipt of
such notice, and that this pledge shall remain in effect until
all such debt or obligation under the Note or any other
Obligations arising or incurred prior to such receipt, and all
interest thereon, has been fully paid or satisfied.
15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original
and altogether but one instrument.
16. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of Kansas.
17. Jurisdiction; Venue. PLEDGOR IRREVOCABLY AGREES THAT ALL
ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT ARISING OUT
OF OR FROM OR RELATED TO THIS AGREEMENT, SHALL BE LITIGATED IN
COURTS HAVING SITUS IN THE COUNTY OF XXXXXXX, STATE OF KANSAS.
PLEDGOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED IN XXXXXXX COUNTY, KANSAS.
PLEDGOR HEREBY DESIGNATES AND APPOINTS THE CT CORPORATION SYSTEM,
OR ANY OTHER PERSON HAVING AND MAINTAINING A PLACE OF BUSINESS IN
KANSAS WHOM PLEDGOR MAY FROM TIME TO TIME HEREAFTER DESIGNATE,
HAVING GIVEN PLEDGEE THIRTY (30) DAYS' WRITTEN NOTICE THEREOF, AS
PLEDGOR'S TRUE AND LAWFUL ATTORNEY AND DULY AUTHORIZED AGENT FOR
SERVICE OF LEGAL PROCESS. PLEDGOR AGREES THAT SERVICE OF SUCH
PROCESS UPON SUCH PERSON SHALL CONSTITUTE PERSONAL SERVICE OF
PROCESS UPON PLEDGOR. PLEDGOR SHALL CAUSE SUCH PERSON TO CONSENT
TO THE APPOINTMENT HEREUNDER, AND TO AGREE THAT PROMPTLY AFTER
RECEIPT OF ANY SUCH PROCESS, SUCH PERSON SHALL FORWARD THE SAME
BY CERTIFIED OR REGISTERED MAIL, TOGETHER WITH ALL PAPERS AFFIXED
THERETO, TO PLEDGEE.
MAKER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR
CHANGE THE VENUE OF OR RIGHT TO JURY TRIAL IT MAY HAVE IN
ANY LITIGATION BROUGHT WITH RESPECT TO THIS NOTE.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
SEABOARD FLOUR CORPORATION
By:
Title:
"PLEDGOR"
SEABOARD CORPORATION
By:
Title:
"PLEDGEE"
