Exhibit 10.33
THE OBLIGATIONS UNDER THIS STOCK PLEDGE AND CONTROL AGREEMENT ARE SUBORDINATED
TO THE CLAIMS OF UNION BANK OF CALIFORNIA, N.A. ("UBOC") PURSUANT TO AND IN
ACCORDANCE WITH THE TERMS OF THAT CERTAIN AMENDED AND RESTATED INTERCREDITOR AND
SUBORDINATION AGREEMENT DATED OF EVEN DATE HEREWITH, BETWEEN SECURED PARTY (AS
DEFINED BELOW) AND UBOC, AS AMENDED.
AMENDED AND RESTATED
STOCK PLEDGE AND CONTROL AGREEMENT
THIS AMENDED AND RESTATED STOCK PLEDGE AND CONTROL AGREEMENT dated as of
_________, 2002 (this "Agreement"), is made by OVERHILL FARMS, INC. ("Pledgor"),
in favor of XXXXXX XXXXXXXXX CAPITAL PARTNERS II, L.P., a California limited
partnership ("Secured Party").
RECITALS
A. Pledgor, OVERHILL CORPORATION (formerly known as Polyphase Corporation
and to be known from and after the effective date of the Spin-Off as Treecon
Resources, Inc.), a Nevada corporation ("TreeCon"), Overhill Ventures and the
Purchaser entered into that certain Securities Purchase Agreement dated as of
November 24, 1999, as amended by that certain Consent and First Amendment to
Securities Purchase Agreement dated as of August 23, 2000, and as further
amended by that certain Second Amendment to Securities Purchase Agreement dated
as of January 11, 2002, that certain Consent and Third Amendment dated as of
January 31, 2002, that certain Fourth Amendment dated as of June 28, 2002, and
that certain Fifth Amendment to Securities Purchase Agreement dated as of
September 11, 2002 (as so amended, the "Original Securities Purchase
Agreement").
B. In connection with the execution and delivery of the Original
Securities Purchase Agreement, Pledgor executed and delivered to Secured Party
that certain Company Pledge Agreement dated as of November 24, 1999 (the
"Original Pledge Agreement").
C. Pledgor, the entities from time to time parties to the Securities
Purchase Agreement as Guarantors (including Overhill Ventures) and Secured Party
are concurrently entering into that certain Amended and Restated Securities
Purchase Agreement dated of even date herewith (as amended from time to time,
the "Securities Purchase Agreement") pursuant to which, among other things, (a)
the parties thereto are amending and restating the Original Securities Purchase
Agreement, the Original Note and the Original Warrant and (b) at the request of
the Company, LLCP is consenting to the Spin-Off Related Matters, all on the
terms and subject to the conditions set forth therein.
D. Pledgor, Overhill Ventures and their Subsidiaries are members of a
consolidated group of entities whose success is mutually interdependent, and
each of Pledgor, Overhill Ventures and their Subsidiaries has derived, and
expects to continue to derive, substantial direct and indirect benefits from the
proceeds of the borrowings made available to Pledgor under the Note.
E. Pledgor is the record and beneficial owner of the Capital Stock listed
in Part A of Schedule I and the owner or holder of the promissory notes and
other instruments listed in Part B of Schedule I.
F. It is a condition precedent to Secured Party's agreement to consent to
the Spin-Off Related Matters that the Pledgor agrees to affirm, amend and
restate the Original Pledge Agreement on the terms and subject to the conditions
set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
consents and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby amend and restate the Original Pledge Agreement as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
and not otherwise defined herein shall have the respective meanings ascribed to
them in the Securities Purchase Agreement. The rules of construction set forth
in Sections 1.2 through 1.6 of the Securities Purchase Agreement shall likewise
govern the interpretation and construction of this Agreement. Terms not
otherwise defined directly herein or indirectly by reference shall have the
respective meanings assigned to such terms in the UCC. In addition, the
following capitalized terms shall have the following respective meanings:
"Pledged Collateral" shall have the meaning assigned to it in Section
Section 2.
"Pledged Entity" shall mean an issuer of any Pledged Stock or Pledged
Indebtedness.
"Pledged Indebtedness" shall mean the Indebtedness evidenced by the
promissory notes, instruments and letters of credit listed in Part B of
Schedule I.
"Pledged Stock" shall mean the capital stock listed in Part A of
Schedule I.
"Senior Liens" shall mean the Liens granted to the Senior Lender
pursuant to the Senior Collateral Documents.
"Secured Obligations" mean any and all Obligations, and all covenants
and duties regarding such amounts, of any kind or nature, present or
future, contingent or liquidated, whether or not evidenced by any note,
agreement or other instrument, the payment or performance of which is
provided for or arises now or hereafter under or in connection with the
Securities Purchase Agreement or any other Investment Document.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" means the Amended and Restated Security Agreement
dated of even date herewith by and among Pledgor, Overhill Ventures, other
subsidiaries of Pledgor from time to time a party thereto, and Secured
Party.
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2. Pledge. To secure the payment and performance in full of any and all
Secured Obligations, Pledgor hereby pledges, assigns and transfers to Secured
Party, and grants to Secured Party a first priority Lien (except for the Senior
Liens) in, and control over, and further affirms, ratifies and acknowledges the
continuing validity, enforceability, and perfection of, the assignments,
pledges, and grants to Secured Party of, the pledges and security interests
heretofore granted to Secured Party pursuant to the Original Pledge Agreement
all of the following, whether now owned and existing or hereafter acquired or
arising (collectively, the "Pledged Collateral"):
(a) the Pledged Stock, and the certificates representing such Pledged
Stock, and all dividends, distributions, cash, instruments and other property or
Proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Stock;
(b) any additional Capital Stock of a Pledged Entity from time to
time acquired by Pledgor in any manner (which shares shall be deemed to be part
of the Pledged Stock owned by Pledgor), and the certificates representing such
additional shares, and all dividends, distributions, cash, instruments,
financial assets, securities accounts, investment property, general intangibles,
and other property of any kind or nature, however evidenced, or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Capital Stock;
(c) the Pledged Indebtedness, and the promissory notes, instruments
and letters of credit evidencing such Pledged Indebtedness, and all interest,
cash, instruments and other property and assets from time to time received,
receivable or otherwise distributed in respect of such Pledged Indebtedness;
(d) all additional Indebtedness arising after the date hereof and
owing to Pledgor and evidenced by promissory notes, instruments or letters of
credit, together with such promissory notes, instruments and letters of credit,
and all interest, cash, instruments and other property and assets from time to
time received, receivable or otherwise distributed in respect of such Pledged
Indebtedness;
(e) any and all rights, powers, remedies and privileges of Pledgor
under or with respect to any of the foregoing; and
(f) any and all proceeds and products of any of the foregoing.
3. Security for Obligations. The pledge and security interest granted
pursuant to Section 2 secures, and the Pledged Collateral is security for, the
prompt payment and performance in full when due, whether at stated maturity, by
acceleration or otherwise, of all Secured Obligations.
4. Delivery of Pledged Collateral. All Pledged Collateral (including
certificates, promissory notes, instruments and letters of credit evidencing the
Pledged Collateral) shall be delivered to and held by or on behalf of Secured
Party pursuant to this Agreement after the Senior Indebtedness has been paid in
full in cash (unless all the Secured Obligations have been fully and finally
paid in cash prior to such time). Upon release of the Senior Liens thereon,
Pledgor shall, or shall cause the Senior Lender to, deliver the Pledged
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Collateral immediately to Secured Party. All Pledged Stock shall be accompanied
by effectively endorsed instruments of transfer or assignments in blank in favor
of Secured Party, all in form and substance satisfactory to Secured Party, and
all promissory notes or other instruments evidencing the Pledged Indebtedness
shall thereupon be endorsed by Pledgor pledging such Pledged Indebtedness, or
shall be accompanied by instruments of assignment, effectively endorsed in
blank. Notwithstanding anything to the contrary set forth herein, the parties
acknowledge and agree that, until all Secured Obligations have been fully and
finally paid in cash, (a) Senior Lender is holding all Pledged Collateral for
the benefit of Senior Lender and for the benefit of Secured Party for the
purpose of perfecting their respective Liens therein, and (b) delivery of any of
such Pledged Collateral to, together with any necessary indorsements in favor
of, Senior Lender shall be sufficient to discharge Pledgors' delivery
obligations hereunder with respect thereto.
5. Representations and Warranties. Pledgor represents and warrants to
Secured Party that:
(a) (i) Pledgor is, and at the time of delivery of the Pledged Stock
in accordance with the terms hereof will be, the sole holder of record and the
sole beneficial owner of such Pledged Stock, free and clear of any Lien thereon
or affecting the title thereto, except for any Lien created by this Agreement
and the Senior Liens, and (ii) Pledgor is, and at the time of delivery of the
Pledged Indebtedness in accordance with the terms hereof will be, the sole owner
and holder of such Pledged Indebtedness, free and clear of any Lien thereon or
affecting title thereto, except for any Lien created by this Agreement and the
Senior Liens.
(b) (i) All of the Pledged Stock has been duly authorized and validly
issued and are fully paid and nonassessable, and (ii) the Pledged Indebtedness
has been duly authorized, authenticated or issued and delivered by, and
constitutes the legal, valid and binding obligations of, each Pledged Entity
issuing same, and no such Pledged Entity is in default thereunder.
(c) Pledgor has the right and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged Collateral pledged by
Pledgor to Secured Party as provided herein.
(d) None of the Pledged Collateral has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject.
(e) Pledgor is the sole owner of the Pledged Stock pledged by it
hereunder and such Pledged Stock is presently represented by the certificates
listed in Part A of Schedule I. There are no existing options, warrants, calls
or commitments of any character whatsoever on or relating to the Pledged Stock.
(f) No Consent that has not been obtained prior to the date hereof is
required to be obtained from any Governmental Authority or any other Person (i)
for the pledge, grant of control, and ratification of the continuing grant by
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this
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Agreement by Pledgor, or (ii) for the exercise by Secured Party of the voting or
other rights provided for in this Agreement or the remedies in respect of such
Pledged Collateral pursuant to this Agreement, except as may be required in
connection with such disposition by laws affecting the offering and sale of
securities generally.
(g) Pledgor has good and marketable title to all Pledged Collateral.
The pledge, assignment and delivery of the Pledged Collateral pursuant to this
Agreement will create a valid and perfected a security interest (subject only to
the Senior Lien) in favor of Secured Party in the Pledged Collateral securing
the payment of the Secured Obligations, subject to no other Lien other than the
Senior Liens.
(h) This Agreement has been duly authorized, executed and delivered
by Pledgor and constitutes a legal, valid and binding obligation of Pledgor,
enforceable against Pledgor in accordance with its terms.
(i) The Pledged Stock constitutes that percentage of the issued and
outstanding Capital Stock of each Pledged Entity as set forth on Schedule I.
(j) Except as disclosed in Part B of Schedule I, none of the Pledged
Indebtedness held by Pledgor is subordinated in right of payment to any other
Indebtedness (except for the Secured Obligations and the Senior Indebtedness) or
subject to the terms of any indenture.
The representations and warranties set forth in this Section 5 shall
survive the execution, delivery and performance by Pledgor of this Agreement.
6. Covenants. Pledgor covenants and agrees that:
(a) Without the prior written consent of Secured Party, Pledgor will
not sell, assign, transfer, pledge, or otherwise encumber any of its rights in
or to any Pledged Collateral owned or held by it, or any unpaid dividends,
interest or other distributions or payments with respect to such Pledged
Collateral, or grant any Lien on such Pledged Collateral, except as expressly
permitted by the Securities Purchase Agreement (including the Senior Lien) or
this Agreement.
(b) Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and deliver letters of credit and take all such
actions as Secured Party from time to time may request in order to ensure to
Secured Party the benefits of the Liens upon and control over the Pledged
Collateral intended to be created by this Agreement, including the filing of any
necessary UCC financing statements that may be filed by Secured Party with or
(to the extent permitted by Applicable Laws) without the signature of Pledgor,
and will cooperate with Secured Party, at Pledgor's expense, in obtaining all
necessary consents and agreements, including control agreements over any
securities accounts, and making all necessary filings under Applicable Laws in
connection with such Liens or any sale or transfer of such Pledged Collateral.
Pledgor hereby authorizes Secured Party to, from time to time in any appropriate
jurisdiction, file one or more financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral without the
signature of Pledgor where permitted by Applicable Law. Such financing
statements may indicate that the Collateral is all assets of Pledgor.
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(c) Pledgor has and will defend the title to the Pledged Collateral,
and the Liens of Secured Party on such Pledged Collateral, against the claim of
any Person (other than the Senior Lender with respect to Senior Liens) and will
maintain and preserve such Liens.
(d) Pledgor will, upon obtaining ownership of any additional Capital
Stock, promissory notes or other instruments of a Pledged Entity, or Capital
Stock, promissory notes or other instruments otherwise required to be pledged to
Secured Party pursuant to any of the Investment Documents that does not already
constitute Pledged Collateral hereunder, promptly (and in any event within three
(3) Business Days after it acquires any such additional Capital Stock, notes or
other instruments) deliver to Secured Party a Pledge Amendment, effectively
endorsed in blank by Pledgor, in substantially the form of Exhibit A (each, a
"Pledge Amendment"), in respect of any such additional Capital Stock, notes or
other instruments, pursuant to which Pledgor shall pledge to Secured Party all
of such additional Capital Stock, notes and other Instruments. Pledgor hereby
authorizes Secured Party to attach each such Pledge Amendment to this Agreement
and agrees that all Pledged Stock and Pledged Indebtedness listed in any such
Pledge Amendment delivered to Secured Party shall for all purposes hereunder be
considered Pledged Collateral.
7. Pledgor's Rights. So long as no Default or Event of Default shall have
occurred and be continuing and until written notice shall be given to Pledgor in
accordance with Section 8(a):
(a) Pledgor shall have the right to vote and give consents with
respect to the Pledged Collateral pledged by it hereunder or any part thereof
for all purposes not inconsistent with the provisions of this Agreement, the
Securities Purchase Agreement or any other Investment Document; provided,
however, that no vote shall be cast, and no consent shall be given or action
taken, that would have the effect of impairing the position or interest of
Secured Party in respect of the Pledged Collateral or that would authorize,
effect or consent to (unless and to the extent expressly permitted by the
Securities Purchase Agreement or consented to in writing by Secured Party):
(i) the dissolution or liquidation, in whole or in part, of a
Pledged Entity;
(ii) the consolidation or merger of a Pledged Entity with any
other Person;
(iii) the sale, disposition or encumbrance of all or
substantially all of the assets of a Pledged Entity, except for Senior
Liens and Liens in favor of Secured Party;
(iv) any change in the authorized number of shares, the stated
capital or the authorized share capital of a Pledged Entity or the
issuance of any additional shares of its Stock; or
(v) the alteration of the voting rights with respect to the
Stock of a Pledged Entity.
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(b) Pledgor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends and interest paid in respect of the
Pledged Stock and Pledged Indebtedness pledged by it hereunder to the extent not
in violation of the Securities Purchase Agreement, except for any and all: (i)
dividends and interest paid or payable other than in cash in respect of any such
Pledged Collateral, instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any such Pledged
Collateral; (ii) dividends and other distributions paid or payable in cash in
respect of any such Pledged Stock in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in capital of a Pledged Entity; and (iii) cash paid, payable or
otherwise distributed in respect of principal of, or in redemption of, or in
exchange for, any such Pledged Collateral; provided, however, that until
actually paid all rights to such distributions shall remain subject to the
Senior Liens and the Lien in favor of Secured Party created by this Agreement
and the other Investment Documents.
(c) All dividends and interest (other than such cash dividends and
interest as are permitted to be paid to Pledgor in accordance with Section
Error! Reference source not found.) and all other distributions in respect of
any of the Pledged Stock or Pledged Indebtedness, whenever paid or made, unless
delivered to the Senior Lender pursuant to the Senior Collateral Documents,
shall be delivered to Secured Party to hold as Pledged Collateral and shall, if
received by Pledgor, be received in trust for the benefit of Secured Party, be
segregated from the other property or funds of Pledgor, and be forthwith
delivered to Secured Party as Pledged Collateral in the same form as so received
(with any necessary indorsements). Upon release of the applicable Senior Liens,
all dividends and interest (other than such cash dividends and interest as are
permitted to be paid to Pledgor in accordance with Section Error! Reference
source not found.) and all other distributions in respect of any of the Pledged
Stock or Pledged Indebtedness, whenever paid or made, shall be delivered to
Secured Party to hold as Pledged Collateral and shall, if received by Pledgor,
be received in trust for the benefit of Secured Party, be segregated from the
other property or funds of Pledgor, and be forthwith delivered to Secured Party
as Pledged Collateral in the same form as so received (with any necessary
indorsements)
8. Defaults and Remedies; Proxy.
(a) Upon the occurrence and during the continuation of any Default or
Event of Default, Secured Party (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 Pledged Collateral pledged by Pledgor
hereunder, to exchange certificates or instruments representing or evidencing
such Pledged Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest, principal
and other distributions made thereon, to sell in one or more sales after ten
(10) days' notice of the time and place of any public sale or of the time at
which a private sale is to take place (which notice Pledgor agrees is
commercially reasonable) the whole or any part of such Pledged Collateral and to
otherwise act with respect to such Pledged Collateral as though Secured Party
were the outright owner thereof. Any sale shall be made at a public or private
sale at Secured Party's place of business, or at any place in Los Angeles
County, California to be named in the notice of sale, either for cash or upon
credit or for future delivery at such price as Secured Party may deem fair, and
Secured Party may be the purchaser of the whole
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or any part of such Pledged Collateral so sold and hold the same thereafter in
its own right free from any claim of Pledgor or any right of redemption. Each
sale shall be made to the highest bidder, but Secured Party reserves the right
to reject any and all bids at such sale that, in its discretion, it shall deem
inadequate. Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of property at
sale are hereby waived and any sale hereunder may be conducted by an auctioneer
or any officer or agent of Secured Party. Secured Party's rights above are
subject to the rights of the Senior Lender under the Intercreditor Agreement.
UPON THE OCCURRENCE AND DURING THE CONTINUATION OF A DEFAULT OR EVENT
OF DEFAULT, PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS SECURED PARTY AS
THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL
PLEDGED BY PLEDGOR HEREUNDER, INCLUDING THE RIGHT TO VOTE THE PLEDGED STOCK OF
PLEDGOR, WITH FULL POWER OF SUBSTITUTION TO DO SO. THE APPOINTMENT OF SECURED
PARTY AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL THE TERMINATION DATE. IN ADDITION TO THE RIGHT TO VOTE THE
PLEDGED STOCK OF PLEDGOR, THE APPOINTMENT OF SECURED PARTY AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS,
PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED STOCK WOULD BE
ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH
PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF SUCH PLEDGED STOCK ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED STOCK OR ANY
OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUATION OF A
DEFAULT OR EVENT OF DEFAULT. NOTWITHSTANDING THE FOREGOING, SECURED PARTY SHALL
NOT HAVE ANY 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.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral pledged by Pledgor hereunder, (i)
the highest bid, if there is but one sale, shall be inadequate to discharge in
full all the Secured Obligations, or (ii) such Pledged Collateral is offered for
sale in lots, the highest bid for the lot offered for sale at any of such sales
would indicate to Secured Party, in its discretion, that the proceeds of the
sales of the whole of such Pledged Collateral would be unlikely to be sufficient
to discharge all the Secured Obligations, then Secured Party may, on one or more
occasions and in its discretion, postpone any of said sales by public
announcement at the time of sale or the time of previous postponement of sale,
and no other notice of such postponement or postponements of sale need be given,
any other notice being hereby waived; provided that any sale or sales made after
such postponement shall be after ten (10) days' notice to Pledgor.
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(c) If, following the occurrence and during the continuance of a
Default or Event of Default, Secured Party in its sole discretion determines
that, in connection with any actual or contemplated exercise of its rights (when
permitted under this Section 8) to sell the whole or any part of the Pledged
Collateral hereunder, it is necessary or advisable to effect a public
registration of all or part of the Pledged Collateral pursuant to the Securities
Act, then Pledgor shall, in an expeditious manner, cause the Pledged Entity that
issued Pledged Collateral owned or held by it to:
(i) Prepare and file with the Commission a registration
statement with respect to the Pledged Stock owned by it and in good
faith use commercially reasonable efforts to cause such registration
statement to become and remain effective;
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of the
Pledged Stock covered by such registration statement whenever Secured
Party shall desire to sell or otherwise dispose of such Pledged Stock;
(iii) Furnish to Secured Party such numbers of copies of a
prospectus and a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as
Secured Party may request in order to facilitate the public sale or
other disposition by Secured Party of the Pledged Stock owned by it;
(iv) Use commercially reasonable efforts to register or qualify
the Pledged Stock covered by such registration statement under such
other securities or blue sky laws of such jurisdictions within the
United States and Puerto Rico as Secured Party shall request, and do
such other reasonable acts and things as may be required of it to
enable Secured Party to consummate the public sale or other
disposition by Secured Party in such jurisdictions of such Pledged
Stock by Secured Party;
(v) Furnish, at the request of Secured Party, on the date that
Pledged Stock owned or held by it are delivered to the underwriters
for sale pursuant to such registration or, if the security is not
being sold through underwriters, on the date that the registration
statement with respect to such Pledged Stock becomes effective, (A) an
opinion, dated such date, of the independent counsel representing such
registrant for the purposes of such registration, addressed to the
underwriters, if any, and in the event such Pledged Stock is not being
sold through underwriters, then to Secured Party, in customary form
and covering matters of the type customarily covered in such legal
opinions; and (B) a comfort letter, dated such date, from the
independent certified public accountants of such registrant, addressed
to the underwriters, if any, and in the event such Pledged Stock is
not being sold through underwriters, then to Secured Party, in a
customary form and
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covering matters of the type customarily covered by such comfort
letters and as the underwriters or Secured Party shall reasonably
request. The opinion of counsel referred to above shall additionally
cover such other legal matters with respect to the registration in
respect of which such opinion is being given as Secured Party may
reasonably request. The comfort letter referred to above from the
independent certified public accountants shall additionally cover such
other financial matters (including information as to the period ending
not more than five Business Days prior to the date of such letter)
with respect to the registration in respect of which such letter is
being given as Secured Party may reasonably request; and
(vi) Otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably practicable
but not later than 18 months after the effective date of such
registration statement, an earnings statement covering the period of
at least 12 months beginning with the first full month after the
effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(d) All expenses incurred in complying with Section 8 (c), including
all registration and filing fees (including all expenses incident to filing with
the National Association of Securities Dealers, Inc.), printing expenses, fees
and disbursements of counsel for the registrant, the fees and expenses of
counsel for Secured Party, expenses of the independent certified public
accountants (including any special audits incident to or required by any such
registration) and expenses of complying with the securities or blue sky laws of
any jurisdictions, shall be paid by Pledgors.
(e) If, at any time when Secured Party shall determine to exercise
its right to sell the whole or any part of the Pledged Collateral hereunder,
such Pledged Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act (or any similar
statute), then Secured Party may, in its discretion (subject only to applicable
requirements of Applicable Laws), sell such Pledged Collateral or part thereof
by private sale in such manner and under such circumstances as Secured Party may
deem necessary or advisable, but subject to the other requirements of this
Section 8, and shall not be required to effect such registration or to cause the
same to be effected. Without limiting the generality of the foregoing, in any
such event, Secured Party in its discretion may (i) in accordance with
applicable securities laws proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Collateral or part thereof could be or shall have been filed under the
Securities Act (or similar statute), (ii) approach and negotiate with a single
possible purchaser to effect such sale, and (iii) restrict such sale to a
purchaser who is an accredited investor under the Securities Act and who will
represent and agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such Pledged
Collateral or any part thereof. In addition to a private sale as provided above
in this Section 8, if any of the Pledged Collateral shall not be freely
distributable to the public without registration under the Securities Act (or
similar statute) at the time of any proposed sale pursuant to this Section 8,
then Secured Party shall not be required to effect such
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registration or cause the same to be effected but, in its discretion (subject
only to applicable requirements of Applicable Laws), may require that any sale
hereunder (including a sale at auction) be conducted subject to restrictions:
(i) as to the financial sophistication and ability of any
Person permitted to bid or purchase at any such sale;
(ii) as to the content of legends to be placed upon any
certificates representing the Pledged Collateral sold in such sale,
including restrictions on future transfer thereof;
(iii) as to the representations required to be made by each
Person bidding or purchasing at such sale relating to such Person's
access to financial information about Pledgor and such Person's
intentions as to the holding of the Pledged Collateral so sold for
investment for its own account and not with a view to the distribution
thereof; and
(iv) as to such other matters as Secured Party may, in its
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in
compliance with the Bankruptcy Law and other laws affecting the
enforcement of creditors' rights and the Securities Act and all
applicable state securities laws.
(f) Pledgor recognizes that Secured Party may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to resort
to one or more private sales thereof in accordance with Section 8. Pledgor also
acknowledges that any such private sale may result in prices and other terms
less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private. Secured Party shall be under no obligation to
delay a sale of any of the Pledged Collateral for the period of time necessary
to permit the applicable Pledged Entity to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if Pledgor owning or holding such Pledged Collateral and the Pledged Entity
would agree to do so.
(g) Pledgor agrees, to the maximum extent permitted by Applicable
Laws, that following the occurrence and during the continuance of a Default or
Event of Default it will not at any time plead, claim or take the benefit of any
appraisal, valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement of this
Agreement, or the absolute sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder, and
Pledgor waives the benefit of all such laws to the extent it lawfully may do so.
Pledgor agrees that it will not interfere with any right, power or remedy of
Secured Party provided for in this Agreement or now or hereafter existing at law
or in equity or by statute or otherwise, or the exercise or beginning of the
exercise by Secured Party of any one or more of such rights, powers or remedies.
No failure or delay on the part of Secured Party to exercise any such right,
power or remedy and no notice or demand that may be given to or made upon
Pledgor by Secured Party with respect to any such remedies shall operate as a
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waiver thereof, or limit or impair Secured Party's right to take any action or
to exercise any power or remedy hereunder, without notice or demand, or
prejudice its rights as against Pledgor in any respect.
(h) Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to Secured Party, that
Secured Party shall have no adequate remedy at law in respect of such breach
and, as a consequence, agrees that each and every covenant contained in this
Section 8 shall be specifically enforceable against Pledgor, and Pledgor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that: (i) no Event of Default
has occurred under the Securities Purchase Agreement and (ii) Secured Party is
in breach of its obligations under this Agreement or the Securities Purchase
Agreement.
(i) Until the occurrence of a Default or an Event of Default, Secured
Party may not (i) repledge the Pledged Collateral to any other party, (ii) sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Pledged Collateral, or (iii) create, incur or permit the
existence of any Lien or option with respect to the Pledged Collateral (except
as contemplated by this Agreement).
9. Waiver. No delay on Secured Party's part in exercising any power of
sale, Lien, option or other right hereunder, and no notice or demand that may be
given to or made upon Pledgor by Secured Party with respect to any power of
sale, Lien, option or other right hereunder, shall constitute a waiver thereof,
or limit or impair Secured Party's right to take any action or to exercise any
power of sale, Lien, option, or any other right hereunder, without notice or
demand, or prejudice Secured Party's rights as against Pledgor in any respect.
10. Assignment. Secured Party may assign, indorse or transfer any
instrument evidencing all or any part of the Secured Obligations as provided in,
and in accordance with, the Securities Purchase Agreement or any Investment
Agreement, and the holder of such instrument shall be entitled to the benefits
of this Agreement.
11. Termination. This Agreement shall create a continuing security
interest in and to all of the Pledged Collateral, and the security interest
shall survive until, and this Agreement shall remain in full force and effect
and terminate only upon, the indefeasible payment (including payment in full in
cash in immediately available funds in the case of Secured Obligations
consisting of payment obligations) and performance in full of any and all
Secured Obligations and the expiration or earlier termination of all obligations
of the Secured Party under this Agreement and the other Investment Documents.
Immediately following the later to occur of (a) the termination of this
Agreement as provided above and (b) the Termination Date (as defined in the
Senior Credit Agreement), Secured Party shall promptly deliver to Pledgor the
Pledged Collateral pledged by Pledgor and delivered to Secured Party at the time
subject to this Agreement and all instruments of assignment executed in
connection therewith, free and clear of the Liens created in favor of Secured
Party under this Agreement and the other Investment Documents and, except as
otherwise provided herein, all of Pledgor's obligations hereunder shall at such
time terminate. Upon payment in full in cash of any Indebtedness evidenced by a
promissory note or other
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instrument delivered to Pledgor as Pledged Collateral, Secured Party will return
such instrument to Pledgor.
12. Lien Absolute. All rights of Secured Party hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Securities Purchase
Agreement, any other Investment Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Securities
Purchase Agreement, any other Investment Document or any other agreement or
instrument governing or evidencing any Secured Obligations;
(c) any exchange, release or non-perfection of any other Collateral
or any release or amendment or waiver of, or consent to departure from any
guaranty for, all or any of the Secured Obligations;
(d) the insolvency of Pledgor or any Guarantor or any other guarantor
of the obligations; or
(e) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Pledgor.
13. Release. Pledgor consents and agrees that Secured Party may at any
time, or from time to time, in its discretion:
(a) renew, extend or change the time of payment of, or the manner,
place or terms of payment of, all or any part of the Secured Obligations; and
(b) exchange, release or surrender all or any of the Collateral
(including the Pledged Collateral), or any part thereof, by whomsoever
deposited, that is now or may hereafter be held by or on behalf of Secured Party
in connection with all or any of the Secured Obligations; all in such manner and
upon such terms as Secured Party may deem proper, and without notice to or
further assent from Pledgor, it being hereby agreed that Pledgor shall be and
remain bound by this Agreement irrespective of the value or condition of any of
the Collateral and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time, exceed the aggregate principal
amount thereof set forth in the Securities Purchase Agreement or any other
agreement governing any Secured Obligations.
Pledgor hereby waives notice of acceptance of this Agreement,
presentment, demand, protest and notice of dishonor of any and all of the
Secured Obligations, and any delay by Secured Party in commencing suit against
any party hereto or Person liable hereon, and in giving any notice to or of
making any claim or demand hereunder upon Pledgor. No act or omission of any
kind on Secured Party's part (other than an act or omission that is
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finally determined by a referee or a court of competent jurisdiction to have
resulted solely from Secured Party's gross negligence or willful misconduct)
shall in any event affect or impair this Agreement.
14. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective even if: (a) any petition is filed by or against
Pledgor or any Pledged Entity for liquidation or reorganization; (b) Pledgor or
any Pledged Entity becomes insolvent or makes an assignment for the benefit of
creditors; (c) a receiver or trustee is appointed for all or any significant
part of Pledgor's or Pledged Entity's assets; or (d) at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
Applicable Laws, rescinded or reduced in amount, or must otherwise be restored
or returned by any obligee of the Secured Obligations, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
and Secured Party's Liens in the Pledged Collateral shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
15. Miscellaneous.
(a) Secured Party may execute any of its duties hereunder by or
through agents or employees and shall be entitled to advice of counsel
concerning all matters pertaining to its duties hereunder.
(b) Pledgor agrees to promptly reimburse Secured Party for actual
out-of-pocket expenses, including reasonable attorneys' fees, incurred by
Secured Party in connection with the enforcement of its rights and remedies
under this Agreement.
(c) Neither Secured Party nor any of its officers, directors,
employees, agents or counsel shall be liable for any action lawfully 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 as finally
determined by a referee or a court of competent jurisdiction.
(d) THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND ITS SUCCESSORS
AND ASSIGNS (INCLUDING A TRUSTEE OR DEBTOR-IN-POSSESSION ON BEHALF OF PLEDGOR),
AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY AND BINDING UPON,
SECURED PARTY AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND NONE OF THE TERMS
OR PROVISIONS OF THIS AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED
EXCEPT IN WRITING DULY SIGNED FOR AND ON BEHALF OF SECURED PARTY AND PLEDGOR.
16. Severability. If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of this
Agreement that are valid.
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17. Counterparts. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall be deemed an original, but
all of which together shall constitute one instrument.
18. Security Agreement. The Liens granted pursuant to this Agreement are
granted in conjunction with, and restate the Liens granted to Secured Party
pursuant to the Security Agreement. Pledgor hereby acknowledges and affirms that
additional rights and remedies of Secured Party with respect to the Liens
granted under this Agreement are set forth in the Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.
19. Governing Law. THIS AGREEMENT AND THE OBLIGATIONS OF THE PLEDGOR
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA (WITHOUT REFERENCE TO CONFLICT OF LAWS). Each Pledged Entity
by its signature below specifies the law of the State of California as the law
of the "issuer's jurisdiction" within the meaning of Section 8110 of the UCC.
20. Survival of Agreement. All covenants, agreements, representations and
warranties made by Pledgor herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by Secured Party and shall survive the
execution and delivery to Secured Party of the Notes pursuant to the Securities
Purchase Agreement, regardless of any investigation made by Secured Party, and
shall continue in full force and effect as long as any Secured Obligation is
outstanding and unpaid.
21. Amendment and Restatement. Effective on and as of the Effective Date,
this Agreement shall supersede the Original Pledge Agreement insofar as it is
inconsistent with this Agreement. However, the execution and delivery of this
Agreement shall not excuse, or constitute a waiver of, any Defaults or Events of
Default under the Original Pledge Agreement, it being understood that this
Agreement is not a termination of the Original Pledge Agreement but is a
modification (and, as modified, a continuation) thereof. Pledgor acknowledges
and agrees that the Original Pledge Agreement, as amended and restated hereby,
is affirmed in all respects and that the first priority liens and security
interests granted thereunder are continued hereby and under the Security
Agreement and the PTC Security Agreement.
22. Waiver of Jury Trial. PLEDGOR AND SECURED PARTY EACH KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL,
WAIVES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR
OTHER PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY RELATING TO (a) THIS
AGREEMENT, THE SECURITIES PURCHASE AGREEMENT, ANY OTHER INVESTMENT DOCUMENT OR
THE SECURED OBLIGATIONS, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF, OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY OR RELATED TO THIS AGREEMENT OR ANY
OTHER INVESTMENT DOCUMENT, OR (b) ANY CONDUCT, ACT OR OMISSION OF THE PARTIES OR
THEIR AFFILIATES (OR ANY OF THEM) WITH
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RESPECT TO THIS AGREEMENT, THE SECURITIES PURCHASE AGREEMENT, ANY OTHER
INVESTMENT DOCUMENT OR THE SECURED OBLIGATIONS, INCLUDING ANY PRESENT OR FUTURE
AMENDMENT THEREOF, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, REGARDLESS
OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER PROCEEDING. Pledgor (a)
certifies that neither Secured Party nor any representative, agent or attorney
of Secured Party has represented, expressly or otherwise, that Secured Party
would not, in the event of litigation, seek to enforce the foregoing waivers and
(b) acknowledges that, in entering into the Securities Purchase Agreement,
Secured Party are relying upon, among other things, the waivers and
certifications contained in this Section 22.
[REST OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
PLEDGOR
OVERHILL FARMS, INC., a Nevada corporation
By: _________________________________________________
Xxxxx Xxxxx
President and Chief Executive Officer
By: _________________________________________________
Xxxxxxx X. Xxxxxxx
Vice President and Chief Financial Officer
SECURED PARTY
XXXXXX XXXXXXXXX CAPITAL PARTNERS II,
L.P., a California limited partnership
By: LLCP California Equity Partners II, L.P., a
California limited partnership, its General
Partner
By: Xxxxxx Xxxxxxxxx Capital Partners, Inc.,
a California corporation, its General Partner
By: ________________________________________
Xxxxxx X. Xxxxxx
President
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The undersigned hereby joins in the above Amended and Restated Stock Pledge
and Control Agreement for the sole purpose of consenting to and being bound by
the provisions thereof, the undersigned hereby agreeing to cooperate fully and
in good faith with the Secured Party and the Company in carrying out the
provisions of such Agreement.
PLEDGED ENTITY
OVERHILL L.C. VENTURES, INC., a California
corporation
By: ___________________________________
Xxxxx Xxxxx
President
By: ___________________________________
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
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EXHIBIT A
FORM OF
PLEDGE AMENDMENT
This Pledge Amendment, dated as of __________ 200_, is delivered pursuant
to Section 6(d) of the Pledge Agreement referred to below. All defined terms
herein shall have the meanings assigned thereto or incorporated by reference in
the Pledge Agreement.
The undersigned hereby certifies that the representations and warranties in
Section 5 of the Pledge Agreement are and continue to be true and correct, both
as to the promissory notes, other instruments and the Capital Stock pledged
prior to this Pledge Amendment and as to the promissory notes, other instruments
and the Capital Stock pledged pursuant to this Pledge Amendment.
The undersigned agrees that this Pledge Amendment may be attached to that
certain Amended and Restated Stock Pledge and Control Agreement dated as of
_________, 2002 (as amended from time to time, the "Pledge Agreement"), by and
between Overhill Farms, Inc., a Nevada corporation, as "Pledgor," and Xxxxxx
Xxxxxxxxx Capital Partners II, L. P., as "Secured Party," and that the Pledged
Stock and Pledged Indebtedness listed on Exhibit A to this Pledge Amendment
shall be and become a part of the Pledged Collateral referred to in the Pledge
Agreement and shall secure all Secured Obligations referred to in the Pledge
Agreement. The undersigned acknowledges that any promissory notes, other
instruments or Capital Stock not included in the Pledged Collateral at the
discretion of Secured Party may not otherwise be pledged by Pledgor to any other
Person or otherwise be used as security for any obligations other than the
Secured Obligations.
"PLEDGOR"
By:________________________________
Name:______________________________
Title:_____________________________
Exhibit A
To Pledge Amendment
Pledged Stock
Class of Certificate No. of Percentage of
Issuer Stock No. Shares Outstanding Shares
------ ----- -- ------ ------------------
Pledged Indebtedness
Initial
Principal Interest
Pledged Entity Amount Issue Date Maturity Date Rate
-------------- ------ ---------- ------------- ----
