PLEDGE AGREEMENT
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of March 11, 1998,
is entered into by XXXX XXXXX, INC., a Delaware corporation ("FMI"), and each of
the undersigned Subsidiaries of FMI (the "Subsidiary Pledgors"; FMI and the
Subsidiary Pledgors are each individually referred to herein as a "Pledgor" and
collectively as "Pledgors"; provided that after the Closing Date, "Pledgors"
shall be deemed to include any new subsidiary of any Pledgor which executes an
acknowledgment to this Agreement pursuant to Section 7 hereof agreeing to be
bound by the terms hereof) in favor of BANKERS TRUST COMPANY, as administrative
agent (the "Administrative Agent") and collateral agent (the "Collateral Agent")
for the Beneficiaries (as hereinafter defined).
RECITALS
WHEREAS, FMI, as borrower, the lenders from time to time party thereto
(the "Loan Agreement Lenders"), the Administrative Agent and The Chase Manhattan
Bank, as syndication agent thereunder (the "Syndication Agent") are parties to
that certain Loan Agreement, dated as of the date hereof (as the same shall be
amended, supplemented or otherwise modified from time to time, the "Loan
Agreement");
WHEREAS, FMI, as lessee, FMS Trust 1997-1, as lessor (the "Lessor"),
Wilmington Trust Company, as owner trustee (the "Owner Trustee"), the investors
from time to time party thereto, the lenders from time to time party thereto
(the "Synthetic Lease Facility Lenders" and, collectively with the Loan
Agreement Lenders, the "Lenders"), the Administrative Agent and the Syndication
Agent are parties to that certain participation agreement, dated as of the date
hereof (as the same may be amended, supplemented or otherwise modified from time
to time, the "Participation Agreement" and, collectively with the other
documents contemplated by the Participation Agreement, the "Synthetic Lease
Facility") (the Synthetic Lease Facility, together with the Loan Agreement and
the other documents contemplated thereby, the "Facility Documents") (the
transactions contemplated by the Facility Documents being collectively referred
to as the "Extensions of Credit");
WHEREAS, pursuant to a guarantee, dated as of the date hereof, the
Subsidiary Pledgors have guaranteed the obligations of FMI under the
transactions contemplated by the Loan Agreement (the "Loan Guarantee");
PLEDGE AGREEMENT
WHEREAS, pursuant to a guarantee, dated as of the date hereof, FMI has
guaranteed the obligations of each Loan Party (other than FMI), the Lessor, and
the Owner Trustee under the Synthetic Lease Facility (the "Lessee Guarantee");
WHEREAS, pursuant to a guarantee, dated as of the date hereof, the
Subsidiary Pledgors have guaranteed the obligations of each Loan Party, the
Lessor and the Owner Trustee under the Synthetic Lease Facility (the "Synthetic
Lease Guarantee" and, collectively with the Loan Guarantee and the Lessee
Guarantee, the "Guarantees");
WHEREAS, FMI, the Subsidiary Pledgors, the Collateral Agent, Bankers
Trust Company, as Administrative Agent under the Loan Agreement, and Bankers
Trust Company, as Administrative Agent under the Synthetic Lease Facility, on
behalf of the Lenders, have entered into an Intercreditor and Collateral Agency
Agreement, dated as of the date hereof (the "Intercreditor Agreement"),
providing for, among other things, the appointment of the Administrative Agent
as Collateral Agent to administer and enforce the security interest granted
pursuant to this Agreement as provided therein;
WHEREAS, it is a condition precedent to the Facility Documents that
the Pledgors shall have entered into this Agreement and granted the pledges
provided herein; and
WHEREAS, each Pledgor wishes to grant pledges and security interests
in favor of Collateral Agent for the benefit of the Lenders and the persons who
may in the future become beneficiaries in accordance with the terms of the
Intercreditor Agreement and the Facility Documents (all such beneficially
interested parties being the "Beneficiaries"); and
WHEREAS, each Pledgor is the legal and beneficial owner of the shares
of capital stock or similar equity securities constituting voting interests
listed opposite the name of such Pledgor in Schedule I hereto (collectively, the
"Pledged Shares"), which shares constitute all of the issued and outstanding
shares of capital stock or similar equity securities of the corporations or
equivalent entities named therein;
NOW, THEREFORE, in consideration of the premises set forth herein and
in order to induce the Lenders to make loans and other extensions of credit
under the Facility Documents, the Pledgors hereby agree with the Collateral
Agent for the ratable benefit of the Beneficiaries as follows:
SECTION 1. Certain Defined Terms. Capitalized terms used herein
without definition herein shall have the meanings provided in the Loan
Agreement. The following terms as used herein shall have the following meanings:
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PLEDGE AGREEMENT
"Agreement" means this Pledge Agreement, as amended or supplemented
from time to time.
"Beneficiaries" shall have the meaning set forth in eighth WHEREAS
clause of this Agreement.
"Extensions of Credit" shall have the meaning set forth in the second
WHEREAS clause of this Agreement.
"Facility Documents" shall have the meaning set forth in the second
WHEREAS clause of this Agreement.
"Guarantee Obligations" shall have the meaning set forth in Section 3.
"Guarantees" shall have the meaning set forth in the fifth WHEREAS
clause of this Agreement.
"Indemnitee" shall have the meaning set forth in Section 16.
"Intercreditor Agreement" shall have the meaning set forth in the
sixth WHEREAS clause of this Agreement.
"Lenders" shall have the meaning set forth in the second WHEREAS
clause of this Agreement.
"Lessor" shall have the meaning set forth in the second WHEREAS clause
of this Agreement.
"Loan Agreement" shall have the meaning set forth in the first WHEREAS
clause of this Agreement.
"Loan Agreement Lenders" shall have the meaning set forth in the first
WHEREAS clause of this Agreement.
"Loan Guarantee" shall have the meaning set forth in the third WHEREAS
clause of this Agreement.
"Owner Trustee" shall have the meaning set forth in the second WHEREAS
clause of this Agreement.
"Participation Agreement" shall have the meaning set forth in the
second WHEREAS clause of this Agreement.
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PLEDGE AGREEMENT
"Pledge Acknowledgment" shall have the meaning set forth in Section 7.
"Pledge Amendment" shall have the meaning set forth in Section 7.
"Pledged Collateral" means:
(a) the Pledged Shares and the certificates representing the Pledged
Shares and any interest of a Pledgor in the entries on the books of any
financial intermediary pertaining to the Pledged Shares, and, subject to
Section 8, all dividends, cash, warrants, rights, 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 the Pledged
Shares;
(b) all additional shares of, and all securities convertible into and
warrants, options and other rights to purchase, stock of any issuer of the
Pledged Shares from time to time acquired by a Pledgor in any manner (which
shares shall be deemed to be part of the Pledged Shares), the certificates
or other instruments representing such additional shares, securities,
warrants, options or other rights and any interest of a Pledgor in the
entries on the books of any financial intermediary pertaining to such
additional shares, and, subject to Section 8, all dividends, cash,
warrants, rights, 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 additional shares, securities, warrants,
options or other rights;
(c) all shares of, and all securities convertible into and warrants,
options and other rights to purchase, stock of any Person that, after the
date of this Agreement, becomes, as a result of any occurrence, a direct
Subsidiary (other than an Insignificant Subsidiary) of any Pledgor (which
shares shall be deemed to be part of the Pledged Shares) and the
certificates or other instruments representing such shares, securities,
warrants, options or other rights and any interest of a Pledgor in the
entries on the books of any financial intermediary pertaining to such
shares, and, subject to Section 8, all dividends, cash, warrants, rights,
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 shares, securities, warrants, options or other rights; and
(d) to the extent not covered above, all Proceeds thereof.
"Pledged Shares" shall have the meaning set forth in the ninth WHEREAS
clause of this Agreement.
"Pledgor" means each of FMI and each Subsidiary Pledgor.
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PLEDGE AGREEMENT
"Proceeds" shall have the meaning assigned that term under the Uniform
Commercial Code (the "Code") as in effect in any relevant jurisdiction or under
relevant law and, in any event, shall include, but not be limited to, any and
all (i) proceeds of any indemnity or guaranty payable to any Pledgor or any
Beneficiaries from time to time with respect to any of the Pledged Collateral
and (ii) any other amounts from time to time paid or payable under or in
connection with any of the Pledged Collateral or otherwise receivable or
received when the Pledged Collateral is or proceeds are sold, collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary.
"Secured Obligations" shall have the meaning set forth in Section 3.
"Securities Act" means the Securities Act of 1993, as from time to
time amended.
"Subsidiary Pledgor" shall mean each of the Subsidiaries set forth on
the signature pages of this Agreement and any Subsidiary which becomes a party
hereto after the date hereof.
"Syndication Agent" means The Chase Manhattan Bank.
"Underlying Debt" shall have the meaning set forth in Section 3.
SECTION 2. Pledge of Security. Each Pledgor hereby pledges to
Collateral Agent and grants to Collateral Agent, for the ratable benefit of the
Lenders and any other holder of Secured Obligations, a first priority security
interest in the Pledged Collateral.
SECTION 3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is collateral security for, (i) the prompt payment and
performance in full when due, whether at stated maturity, by acceleration or
otherwise (including the payment of amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a) and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506 (b), or any successor
provision thereto), of all obligations of FMI under the Facility Documents,
whether now existing or hereafter arising, voluntary or involuntary, whether or
not jointly owed with others, direct or indirect, absolute or contingent,
liquidated or unliquidated, and whether or not from time to time decreased or
extinguished and later increased, created or incurred and all or any portion of
such obligations that are paid to the extent all or any part of such payment is
avoided or recovered directly or indirectly from the Collateral Agent or
Beneficiaries as a preference, fraudulent transfer or otherwise (all such
obligations being the "Underlying Debt"), (ii) all obligations of the Pledgors
under their Guarantees (the "Guarantee Obligations") and (iii) all obligations
or
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PLEDGE AGREEMENT
liabilities of every nature of Pledgors now or hereafter existing under this
Agreement (all such obligations of Pledgors, together with the Underlying Debt
and the Guarantee Obligations, being the "Secured Obligations").
SECTION 4. Delivery of Pledged Collateral. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Collateral Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or, as applicable, shall be accompanied
by the Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Collateral Agent. If an Event of Default shall have occurred and be continuing,
Collateral Agent shall have the right, at any time in its discretion and without
notice to any Pledgor, to transfer to or to register in the name of Collateral
Agent or any of its nominees any or all of the Pledged Collateral, subject only
to the revocable rights specified in Section 8(a) hereof. In addition,
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 5. Representations and Warranties. Each Pledgor represents and
warrants as follows:
(a) Pledged Collateral. All of the Pledged Shares pledged by such
Pledgor have been duly authorized and validly issued and are fully paid and
nonassessable. The Pledged Shares constitute all of the issued and outstanding
shares or membership interests, as the case may be, of each issuer thereof and
there are no outstanding options, warrants, rights to subscribe, stock purchase
rights or other agreements outstanding with respect to, or property that is now
or hereafter convertible into, or that requires the issuance or sale of, any
Pledged Shares.
(b) Ownership of Pledged Collateral. Such Pledgor is the legal, record
and beneficial owner of the Pledged Collateral pledged by such Pledgor free and
clear of any Lien except for the security interest created by this Agreement.
(c) Consents. No consent of any other party (including, without
limitation, stockholders or creditors of such Pledgor or any Person under any
contractual obligation of such Pledgor) and no consent, authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for the pledge by the Pledgor of the
Pledged Collateral pursuant to this Agreement and the grant by the Pledgor of
the security interest granted hereby or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the exercise by
Collateral Agent of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except (x) those which have been obtained or made and (y) as may be required in
connection with
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PLEDGE AGREEMENT
a disposition of Pledged Collateral by laws affecting the offering and sale of
securities generally).
(d) Perfection. The pledge and delivery to Collateral Agent of the
Pledged Collateral pursuant to this Agreement creates a valid and perfected
security interest of Collateral Agent, on behalf of the Beneficiaries, in the
Pledged Collateral of such Pledgor, securing the payment and performance of the
Secured Obligations, with the priority set forth herein, and all actions
necessary or desirable to perfect and protect such security interest have been
duly taken.
(e) Regulations G, T, U and X. The pledge of the Pledged Collateral
pursuant to this Agreement does not violate Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System.
SECTION 6. Certain Covenants. Each Pledgor hereby covenants that,
until the Secured Obligations have been indefeasibly paid in full, such Pledgor
will:
(a) not, (i) except as permitted by each of the Facility Documents,
sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Pledged Collateral pledged
hereunder by such Pledgor, (ii) create or permit to exist any Lien upon or with
respect to any of the Pledged Collateral, except for the security interest under
this Agreement or (iii) permit, except as permitted by each of the Facility
Documents, any issuer of Pledged Shares to merge or consolidate with any Person;
provided, however, that in the event any Pledged Collateral is sold, transferred
or otherwise disposed of in any transaction permitted by each of the Facility
Documents (as long as all such agreements are in effect, otherwise by whichever
agreements remain in effect), such Pledged Collateral shall, concurrently
therewith, be automatically released from the lien and security interest under
this Agreement and the Collateral Agent shall, at such Pledgor's expense,
execute and deliver to such Pledgor such documents as such Pledgor shall
reasonably request to evidence such release; provided that arrangements
satisfactory to the Collateral Agent have been made for delivery to it of the
amounts, if any, required to be paid to the Beneficiaries out of the net
proceeds of such disposition;
(b) (i) cause each issuer of Pledged Shares not to issue any stock or
other securities or membership interests in addition to or in substitution for
the Pledged Shares issued by such issuer, except to the Pledgor, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock, membership interests or other securities
of each issuer of Pledged Shares, and (iii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all shares of stock or
membership interests of any Person which, after the date of this Agreement,
becomes, as a result of any occurrence, a direct Subsidiary (other than an
Insignificant Subsidiary) of Pledgor; and
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PLEDGE AGREEMENT
(c) promptly deliver to Collateral Agent all written notices received
by it with respect to the Pledged Collateral.
SECTION 7. Further Assurances; Pledge Amendments.
(a) Each Pledgor agrees that at any time and from time to time, at the
expense of the Pledgors, such Pledgor shall promptly execute and deliver all
further instruments and documents, and take all further actions, that may be
necessary or desirable, or that Collateral Agent may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Pledged Collateral.
(b) Each Pledgor further agrees that it will, upon obtaining any
additional shares of stock, membership interests or other securities required to
be pledged hereunder as provided in Section 7(b) or (c) hereof, promptly (and in
any event within ten days) deliver to Collateral Agent a Pledge Amendment, duly
executed by such Pledgor, in substantially the form of Schedule II hereto (a
"Pledge Amendment"), in respect of the additional shares of stock or membership
interests to be pledged pursuant to this Agreement. Each Pledgor hereby
authorizes Collateral Agent to attach each Pledge Amendment to this Agreement
and agrees that all Pledged Shares listed on any Pledge Amendment delivered to
Collateral Agent shall for all purposes hereunder be considered Pledged
Collateral.
(c) Each Pledgor further agrees that it will cause any direct or
indirect Subsidiary (other than Insignificant Subsidiaries) acquired or created
after the Closing Date promptly after such acquisition or creation of such new
Subsidiary (and in any event within ten days after the date such acquisition or
creation, as the case may be) to deliver to Collateral Agent an acknowledgment
duly executed by such new Subsidiary in substantially the form of Schedule III
hereto (a "Pledge Acknowledgment").
SECTION 8. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default (as defined below) shall have
occurred and be continuing:
(i) The Pledgors shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of any of the
Facility Documents. It is understood, however, that neither (A) the voting
by Pledgors of any Pledged Shares for or the Pledgors' consent to the
election of directors at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such meeting nor
(B) the Pledgors' consent to or approval of any
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PLEDGE AGREEMENT
action otherwise permitted under each of the Facility Documents shall be
deemed inconsistent with the terms of any of the Facility Documents within
the meaning of this Section 8(a)(i), and no notice of any such voting or
consent need be given to Collateral Agent.
(ii) The Pledgors shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all dividends
and other distributions paid in respect of the Pledged Collateral;
provided, however, that any and all dividends, interest and other
distributions paid or payable in additional equity securities, or warrants,
options or similar rights to acquire additional equity securities shall be,
and shall forthwith be delivered to Collateral Agent to hold as, Pledged
Collateral and shall, if received by a Pledgor, be received in trust for
the benefit of Collateral Agent, be segregated from the other property or
funds of the Pledgor and be forthwith delivered to Collateral Agent as
Pledged Collateral in the same form as so received (with all necessary
endorsements).
(iii) Collateral Agent shall promptly execute and deliver (or cause to
be executed and delivered) to the appropriate Pledgor all such proxies,
dividend payment orders and other instruments as such Pledgor may from time
to time reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other consensual rights which it is entitled to
exercise pursuant to paragraph (i) above and to receive the dividends,
principal or interest payments which it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) Upon written notice from Collateral Agent to FMI, all rights of
Pledgors to exercise the voting and other consensual rights which they
would otherwise be entitled to exercise pursuant to Section 8(a)(i) shall
cease, and all such rights shall thereupon become vested in Collateral
Agent who shall thereupon have the right to exercise such voting and other
consensual rights.
(ii) All rights of Pledgors to receive the dividends, interest and
other payments which they would otherwise be authorized to receive and
retain pursuant to Section 8(a)(ii) shall cease, and all such rights shall
thereupon become vested in Collateral Agent who shall thereupon have the
right to receive and hold as Pledged Collateral such dividends, interest
and other payments which shall, upon written notice from Collateral Agent,
be paid to Collateral Agent.
(iii) All dividends, interest and other payments which are received by
any Pledgor contrary to the provisions of paragraph (ii) of this Section
8(b) shall be received in trust for the benefit of Collateral Agent, shall
be segregated from
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PLEDGE AGREEMENT
other funds of such Pledgor and shall forthwith be paid over to Collateral
Agent as Pledged Collateral in the same form as so received (with any
necessary endorsements).
(c) In order to permit Collateral Agent to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to Section
8(b)(i) hereof and to receive all dividends and other distributions which it may
be entitled to receive under Section 8(a)(ii) hereof or Section 8(b)(ii) hereof,
the Pledgors shall promptly execute and deliver (or cause to be executed and
delivered) to Collateral Agent all such proxies, dividend payment orders and
other instruments as Collateral Agent may from time to time reasonably request.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby irrevocably appoints Collateral Agent as such Pledgor's attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name of
such Pledgor or otherwise, from time to time in Collateral Agent's reasonable
discretion to take any action and to execute any instrument, including but not
limited to financing and continuation statements, which Collateral Agent may
deem necessary or advisable, subject to the terms and conditions of this
Agreement, to accomplish the purposes of this Agreement, including, without
limitation, (a) to receive, endorse and collect all instruments made payable to
such Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same, and (b) if an Event of Default shall have
occurred and be continuing, to ask, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Pledged Collateral, and to file any claims or take
any action or institute any proceedings which Collateral Agent may deem
necessary or desirable for the collection of any of the Pledged Collateral or to
enforce the rights of Collateral Agent with respect to any of the Pledged
Collateral.
SECTION 10. Collateral Agent May Perform. If a Pledgor fails to
perform any agreement contained herein, Collateral Agent may, upon thirty days'
notice to the Pledgor (unless otherwise expressly set forth in this Agreement or
an Event of Default shall have occurred and be continuing, in which case, no
notice shall be required) itself perform, or cause performance of, such
agreement, and the expenses of Collateral Agent incurred in connection therewith
shall be payable by the Pledgors under Section 16(b) hereof.
SECTION 11. Standard of Care. The powers conferred on Collateral Agent
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose on it any duty to exercise such powers. Collateral Agent shall be
deemed to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment substantially equivalent to that
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PLEDGE AGREEMENT
which Collateral Agent accords its own property consisting of negotiable
securities, it being understood that Collateral Agent shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not any Beneficiary has or is deemed to have
knowledge of such matters, (b) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Pledged Collateral) to preserve rights against any parties
with respect to any Pledged Collateral, (c) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value.
SECTION 12. Events of Default. The occurrence of any "Event of
Default" as defined in any of the Facility Documents (other than a "Credit
Agreement Event of Default" as defined in the Participation Agreement) shall
constitute an Event of Default under this Agreement.
SECTION 13. Remedies upon Default.
(a) Remedies Upon Default. If any Event of Default shall have occurred
and be continuing:
(i) Collateral Agent may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party
on default under the Code as in effect in the State of New York (or any
other state with jurisdiction over the Pledged Collateral) at that time,
and Collateral Agent may also in its sole discretion, without notice
(except as specified below), sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of Collateral Agent's offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as are commercially reasonable,
irrespective of the impact of any such sales on the market price of the
Pledged Collateral. Collateral Agent may be the purchaser of any or all of
the Pledged Collateral at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Pledged Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price of any Pledged Collateral payable by
Collateral Agent at such sale. Each 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 hereby waives (to the extent permitted by
law) all rights of redemption, stay and/or appraisal which it now has or
may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.
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PLEDGE AGREEMENT
Pledgors agree that, to the extent notice of sale shall be required by law,
at least ten days' notice to the Pledgors of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Collateral Agent shall not be obligated
to make any sale of Pledged Collateral regardless of notice of sale having
been given. Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. Each Pledgor hereby waives any claims against Collateral
Agent arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Collateral
Agent accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Pledged Collateral are insufficient to pay all the
Secured Obligations, the Pledgors shall be liable for the deficiency and
the fees of any attorneys employed by Collateral Agent to collect such
deficiency.
(ii) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as from time to time amended (the
"Securities Act"), and applicable state securities laws, Collateral Agent
may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of
such Pledged Collateral under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at prices and on
terms less favorable to Collateral Agent than those obtainable through a
public sale without such restrictions (including, without limitation, a
public offering made pursuant to a registration statement under the
Securities Act) and, notwithstanding such circumstances, each Pledgor
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of
any Pledged Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities
laws, even if such issuer would, or should, agree to so register it.
(iii) If Collateral Agent determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, the Pledgors shall
and shall cause each issuer of any Pledged Shares to be sold hereunder from
time to time to furnish to Collateral Agent all such information as
Collateral Agent may request in order to determine the number of shares and
other instruments included in the Pledged Collateral which may be sold by
Collateral Agent in exempt transactions
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PLEDGE AGREEMENT
under the Securities Act and the rules and regulations of the Securities
and Exchange Commission thereunder, as the same are from time to time in
effect.
(b) Decisions Relating to Exercise of Remedies. Notwithstanding
anything in this Agreement to the contrary, as provided in the Intercreditor
Agreement, the Collateral Agent shall exercise, or shall refrain from exercising
any remedy provided herein in accordance with the instructions of the Required
Lenders (as defined in the Intercreditor Agreement) and the Beneficiaries shall
be bound by such instructions; and the sole rights of the Beneficiaries under
this Agreement shall be (i) to be secured by the Pledged Collateral as provided
herein and (ii) to receive the payments provided for in Section 14 hereof.
SECTION 14. Application of Proceeds. All Proceeds received by
Collateral Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Pledged Collateral may, in the
discretion of Collateral Agent, be held by Collateral Agent as Pledged
Collateral for, and/or then or at any time thereafter applied in whole or in
part by Collateral Agent against the Secured Obligations in the following order
of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, and all expenses, liabilities and advances made
or incurred by Collateral Agent in connection therewith and all amounts for
which the Collateral Agent is entitled to indemnification hereunder and all
advances made by the Collateral Agent hereunder for the account of the Pledgors
or for the payment of all costs and expenses paid or incurred by the Collateral
Agent in connection with the exercise of any right or remedy hereunder, all in
accordance with Section 16 hereof;
SECOND: To the payment in full of all Secured Obligations in
accordance with Section 8 of the Intercreditor Agreement; and
THIRD: To the payment to or upon the order of the Pledgors, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 15. Collateral Agent. Collateral Agent shall be obligated and
shall have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of Pledged
Collateral) solely in accordance with the Intercreditor Agreement. Collateral
Agent may resign and a successor Collateral Agent may be appointed in the manner
provided for resignation and appointment of a successor in the Intercreditor
Agreement. Upon the acceptance of any appointment as a Collateral Agent by a
successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
13
PLEDGE AGREEMENT
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement and shall deliver any Pledged Collateral in its possession
to the successor Collateral Agent. After any retiring Collateral Agent's
resignation, the provisions of this Agreement shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement while it was
Collateral Agent.
SECTION 16. Indemnity and Expenses.
(a) The Pledgors jointly and severally agree to indemnify Collateral
Agent, each Beneficiary and each of the officers, directors, agents, employees
and affiliates of each of them (each an "Indemnitee"), from and against any and
all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting from the gross negligence or willful misconduct
of the Indemnitee seeking indemnification.
(b) Pledgors will upon demand pay to Collateral Agent the amount of
any and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which 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 Collateral, (iii) the exercise or
enforcement of any of the rights of Collateral Agent hereunder or (iv) the
failure by any Pledgor to perform or observe any of the provisions hereof.
SECTION 17. Waivers of Pledgor.
(a) Each Pledgor hereby waives any right to require Collateral Agent
to: (i) proceed against FMI, any guarantor of any of the Secured Obligations or
any other person or entity; (ii) proceed against or exhaust any other security
held from any other person or entity; (iii) give notice to any Pledgor of the
terms, time and place of any public or private sale of the Pledged Collateral or
any other security, or otherwise comply with Section 9504 of the Code (except as
provided in Section 13(a)(i)); (iv) pursue any other remedy in Collateral
Agent's power; or (v) except as otherwise expressly provided herein or in any
other Facility Document, make or give any presentments, demands for performance,
notices of nonperformance, protests, notices of protest or notices of dishonor
in connection with any obligations or evidences of indebtedness which constitute
in whole or in part the Secured Obligations or in connection with the creation
of new or additional Secured Obligations;
(b) Each Pledgor waives any defense arising by reason of: (i) any
disability or other defense of FMI, any Pledgor or any other entity, including,
without limitation, any defense based on or arising out of the unenforceability
of any of the
14
PLEDGE AGREEMENT
Secured Obligations, legal or equitable discharge of the Secured Obligations or
this Agreement or any statute of limitations affecting a Pledgor's liability
hereunder; (ii) the cessation from any cause whatsoever, other than payment in
full, of the Secured Obligations or the release or substitution of any sureties
or guarantors of the Secured Obligations; (iii) any act or omission by
Collateral Agent which directly or indirectly results in or aids the discharge
of any Pledgor or any of the Secured Obligations by operation of law or
otherwise; (iv) the release of any other collateral securing the Secured
Obligations or the failure by Collateral Agent to perfect or maintain the
perfection of any such other collateral; (v) any modification of the Secured
Obligations, in any form whatsoever, including, but not limited to the renewal,
extension, acceleration or other change in the time for payment of the Secured
Obligations, and any change in the terms of the Secured Obligations, including,
but not limited to, any increase or decrease of the rate of interest on the
Secured Obligations; and (vi) any law limiting the liability of or exonerating
guarantors or sureties; and
(c) until all the Secured Obligations shall have been paid in full,
each Pledgor waives any right to enforce any remedy which Collateral Agent now
has or may hereafter have against any person or entity guaranteeing or securing
the Secured Obligations, and waives any benefit of, or any right to participate
in any security whatsoever now or hereafter held by Collateral Agent for the
Secured Obligations.
SECTION 18. Continuing Security Interest; Transfer of Indebtedness.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall, unless released and/or terminated pursuant to Section 15
of the Intercreditor Agreement, (a) remain in full force and effect until
indefeasible payment in full of all Secured Obligations, the cancellation or
termination of the Commitments to extend credit under the Facility Documents and
the cancellation or expiration of all outstanding letters of credit, (b) be
binding upon each Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Collateral Agent hereunder, to the benefit of
Collateral Agent and each Beneficiary and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), subject to the provisions of the Facility Documents, each Beneficiary may
assign or otherwise transfer any Debt held by it to any other person or entity,
and such other person or entity shall thereupon become vested with all the
benefits in respect thereof granted to a Beneficiary herein or otherwise. Upon
the earlier of (i) indefeasible payment in full of all Secured Obligations, the
cancellation or termination of the Commitments to extend credit under the
Facility Documents, the cancellation or expiration of all outstanding letters of
credit or (ii) the release and termination of the pledge pursuant to Section 15
of the Intercreditor Agreement, each Pledgor shall be entitled to the return,
upon its request and at its expense, against receipt and without recourse to
Collateral Agent, of such of the Pledged Collateral pledged by such Pledgor
hereunder as shall not have been sold or otherwise applied pursuant to the terms
hereof.
15
PLEDGE AGREEMENT
SECTION 19. Additional Beneficiaries. Each lender, or agent on behalf
of each lender, which becomes a party to the Intercreditor Agreement from time
to time shall thereupon be deemed a Beneficiary hereunder and shall be entitled
to all of the rights and benefits of a Beneficiary hereunder subject to the
terms of this Agreement and the Intercreditor Agreement.
SECTION 20. No Waiver by Beneficiary; Authority of Pledgor. No failure
on the part of Collateral Agent to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
Collateral Agent of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative to the fullest extent permitted by
law and are not exclusive of any remedies provided by law. It is not necessary
for Collateral Agent to inquire into the powers of any Pledgor or the officers,
directors or agents acting or purporting to act on behalf of any of them.
SECTION 21. Amendment, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by any Pledgor herefrom, shall in
any event be effective unless the same shall be in writing and signed by
Collateral Agent on behalf of the Required Lenders (as defined in the
Intercreditor Agreement), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 22. Addresses for Notices. Unless otherwise specifically
provided herein, any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied,
telexed or sent by United States mail or courier service and shall be deemed to
have been given when delivered in person, upon receipt (in the case of telecopy
or telex) or four business days after depositing it in the United States mail,
registered or certified, with postage prepaid and properly addressed; provided
that any notice sent to Collateral Agent shall not be effective until received.
For purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this Section 22) shall be as set
forth under each party's name on the signature pages hereof.
SECTION 23. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein, terms defined in Article 9 of the Code are used herein as
therein defined.
16
PLEDGE AGREEMENT
SECTION 24. Severability. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdictions,
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.
SECTION 25. Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against any Pledgor with respect to this Agreement
may be brought in any state or federal court of competent jurisdiction sitting
in New York, New York, and by execution and delivery of this Agreement, each
Pledgor accepts for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 22. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law. A copy of any such process so
served shall be mailed by registered mail to such Pledgor at its address
referred to in Section 22 hereof, except that unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of process. If any agent appointed by any Pledgor refuses to accept
service, such Pledgor hereby agrees that service upon it by mail shall
constitute sufficient notice. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Collateral Agent to bring proceedings against any Pledgor in the courts of any
other jurisdiction.
SECTION 26. Waiver of Jury Trial. Each Pledgor and Collateral Agent
hereby agree to waive their respective rights to jury trial of any claim or
cause of action based upon or arising out of this Agreement. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. Each Pledgor and
Collateral Agent acknowledge that this waiver is a material inducement for each
Pledgor and Collateral Agent to enter into a business relationship, that each
Pledgor and Collateral Agent have already relied on the waiver in entering into
this Agreement and that each will continue to rely on the waiver in their
related future dealings. Each Pledgor and Collateral Agent further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
17
PLEDGE AGREEMENT
AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO TRIAL BY THE COURT.
SECTION 27. Marshaling; Payments Set Aside. Collateral Agent shall not
be under any obligation to marshal any assets in favor of any Pledgor or any
other party or against or in payment of any or all of the Secured Obligations.
To the extent that any Pledgor makes a payment or payments to Collateral Agent
or Collateral Agent enforces its security interests or exercises its rights of
setoff, and such payment or payments or proceeds of such enforcement or setoff
or any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
SECTION 28. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement or be given any substantive effect.
SECTION 29. Counterparts. This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which together shall constitute one and the same Agreement.
[Remainder of page intentionally left blank.]
18
PLEDGE AGREEMENT
IN WITNESS WHEREOF, Pledgors have caused this Agreement to be duly executed
and delivered by their officers thereunto duly authorized as of the date first
above written.
"PLEDGORS"
XXXX XXXXX, INC.,
XXXX XXXXX STORES, INC.
XXXXX'X FOOD & DRUG CENTERS, INC.
B&B STORES, INC.,
FM HOLDING CORPORATION,
ROUNDUP CO.,
QUALITY FOOD CENTERS, INC.
XXXXXX MARKETS, INC.
FOOD 4 LESS HOLDINGS, INC.
XXXX XXXXX JEWELERS, INC.
SMITTY'S SUPERMARKETS, INC.
SMITTY'S SUPER VALU, INC.
QUALITY FOOD, INC.
QUALITY FOOD HOLDINGS, INC.
RALPHS GROCERY COMPANY
CALA CO.
FOOD 4 LESS OF SOUTHERN
CALIFORNIA, INC.
ALPHA BETA COMPANY
By: XXXXX X. XXXXX
-------------------------------------
Title: Vice President & Secretary
1
PLEDGE AGREEMENT
Notice Address for Pledgors:
[ ]
Attention:
With copies to:
[ ]
2
PLEDGE AGREEMENT
"Administrative Agent" and
"Collateral Agent"
BANKERS TRUST COMPANY
By:
-------------------------------------
Title:
----------------------------------
Notice Address:
3
PLEDGE AGREEMENT
SCHEDULE I
to the Pledge Agreement
Attached to and forming a part of the Pledge Agreement dated as of
March 11, 1998 between Pledgors and Bankers Trust Company, as Administrative
Agent and Collateral Agent.
Pledgor: Xxxx Xxxxx, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Xxxx Xxxxx Stores, Inc. Common 1A $.01 100
Quality Food Centers, Common QF 20005 $.0001 100
Inc.
Food 4 Less Holdings, Common 263 $.01 100
Inc.
Xxxxx'x Food & Drug Common 1A $.01 100
Centers, Inc.
-----------------------------------------------------------------------------------------------------------
Pledgor: Xxxx Xxxxx Stores, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Roundup Co. Common 2 $1.00 1,000
Xxxx Xxxxx of Alaska, Common 2 $1.00 1,000
Inc.
Xxxx Xxxxx of Common 2 $1.00 1,000
California, Inc.
Distribution Trucking Common 3 npv 100
Company
B&B Stores, Inc. Common 3 $1.00 1,000
CB&S Advertising Common 3 $100.00 100
Agency, Inc.
-----------------------------------------------------------------------------------------------------------
I-1
PLEDGE AGREEMENT
FM Holding Common 2 $.50 1,000
Corporation
FM Retail Services, Inc. Common 2 npv 100
Xxxx Xxxxx Jewelers, Common 2 $.01 100
Inc.
FM Inc. Common 2 npv 100
-----------------------------------------------------------------------------------------------------------
Pledgor: Xxxxx'x Food & Drug Centers, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Xxxxx'x Beverage of Common 11 $10.00 500
Wyoming
Western Property Common 11 npv 10,000
Investment Group, Inc.
Smitty's Supermarkets, Common 1 $.01 1,000
Inc.
Richies, Inc. Common 3 npv 1,000
Treasure Valley Land N/A 1 N/A 100%
Company, L.C. interest
-----------------------------------------------------------------------------------------------------------
Pledgor: B&B Stores, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
B&B Pharmacy, Inc. Common 2 $10.00 5,000
-----------------------------------------------------------------------------------------------------------
Pledgor: FM Holding Corporation
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Grand Central, Inc. Common 2 $1.00 2,172,561
-----------------------------------------------------------------------------------------------------------
I-2
PLEDGE AGREEMENT
Pledgor: Roundup Co.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
X X Properties, Inc. Common 1 npv 100
-----------------------------------------------------------------------------------------------------------
Pledgor: Xxxx Xxxxx Jewelers, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Merksamer Jewlers, Common 8 npv 40,030
Inc.
-----------------------------------------------------------------------------------------------------------
Pledgor: Quality Food Centers, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Xxxxxx Markets, Inc. Common C-3101 $.01 1
Second Story, Inc. Common 1 npv 1,000
Quality Food, Inc. Common 1 $.001 100
KU Acquisition Common 1 npv 100
Corporation
-----------------------------------------------------------------------------------------------------------
Pledgor: Xxxxxx Markets, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Xxxxxx Realty, Inc. Common 2 $100.00 200
-----------------------------------------------------------------------------------------------------------
Pledgor: Food 4 Less Holdings, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Ralphs Grocery Common 1 $.01 1,513,938
Company
-----------------------------------------------------------------------------------------------------------
I-3
Pledgor: Ralphs Grocery Company
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Xxxxxx'x, Inc. Common 4 $.50 1,000
Cala Co. Common 3 $.01 1,000
Food 4 Less of Southern Common 1 $.01 1,000
California, Inc.
Xxxxxxxx Stores, Inc. Common 1 npv 100
-----------------------------------------------------------------------------------------------------------
Pledgor: Cala Co.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Bay Area Warehouse Common 1 npv 1,000
Stores, Inc.
Cala Foods, Inc. Common 179 $1.00 400,000
Xxxx Markets, Inc. Common I $10.00 7,520
Xxxx Markets, Inc. Common J $10.00 7,200
-----------------------------------------------------------------------------------------------------------
Pledgor: Food 4 Less of Southern California, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Alpha Beta Company Common 4 npv 1,000
-----------------------------------------------------------------------------------------------------------
Pledgor: Alpha Beta Company
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Food 4 Less GM, Inc. Common 1 npv 1,000
Food 4 Less Common 1 npv 1,000
Merchandising, Inc.
-----------------------------------------------------------------------------------------------------------
I-4
PLEDGE AGREEMENT
Food 4 Less of Common 4 npv 1,000
California, Inc.
-----------------------------------------------------------------------------------------------------------
Pledgor: Smitty's Supermarkets, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Smitty's Super Valu, Common 5 $.01 1,000
Inc.
-----------------------------------------------------------------------------------------------------------
Pledgor: Smitty's Super Valu, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Saint Xxxxxxxx Holding Common 4 $100.00 2,010
Company
Compare, Inc. Common 2 npv 100
Smitty's Equipment Common 2 npv 1,000
Leasing, Inc.
-----------------------------------------------------------------------------------------------------------
Pledgor: Quality Food, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
Quality Food Holdings, Common 1 $1.00 100
Inc.
-----------------------------------------------------------------------------------------------------------
Pledgor: Quality Food Holdings, Inc.
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
QFC Sub, Inc. Common 1 $.001 100
-----------------------------------------------------------------------------------------------------------
I-5
PLEDGE AGREEMENT
SCHEDULE II
to the Pledge Agreement
[FORM OF PLEDGE AMENDMENT]
This Pledge Amendment, dated March __, 1998, is delivered pursuant to
Section 8 of the Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge Agreement dated
March __, 1998, between Xxxx Xxxxx, Inc. and its Subsidiaries who are
signatories thereto and Bankers Trust Company, as Administrative Agent and
Collateral Agent (the "Pledge Agreement"; capitalized terms defined therein
being used herein as therein defined) and that the Pledged Shares listed on this
Pledge Amendment shall be deemed to be part of the Pledged Shares and shall
become part of the Pledged Collateral and shall secure the Secured Obligations
as provided in the Pledge Agreement.
[PLEDGOR]
By:
-------------------------------------
Title:
----------------------------------
Class Stock Par Number
Stock Issuer of Stock Certificate Nos. Value of Shares
------------ -------- ---------------- ----- ---------
II-1
PLEDGE AGREEMENT
SCHEDULE III
to the Pledge Agreement
[FORM OF ACKNOWLEDGMENT OF NEW SUBSIDIARY]
Reference is hereby made to the Pledge Agreement dated as of March __,
1998 (the "Pledge Agreement") among Xxxx Xxxxx, Inc. and its Subsidiaries who
are signatories thereto and Bankers Trust Company, as Administrative Agent and
Collateral Agent in which this Acknowledgment and its attachments are
incorporated.
The undersigned is a new Subsidiary (which is not an Insignificant
Subsidiary) and, as such, is required to pledge its Pledged Shares to secure the
Secured Obligations (all as defined in the Pledge Agreement) as provided in the
Pledge Agreement. The undersigned hereby represents and warrants that it is the
legal and beneficial owner of the shares of capital stock or similar equity
securities described in Schedule 1 hereto which shares constitute all of the
issued and outstanding shares of all classes of capital stock or similar equity
securities of the Subsidiary or Subsidiary so listed.
The undersigned acknowledges the terms of the Pledge Agreement and
agrees to be bound thereby.
[NEW SUBSIDIARY]
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
Notice Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
III-1
PLEDGE AGREEMENT
SCHEDULE 1
to the Acknowledgment to New Subsidiary
Capital Stock (or similar equity securities) of Subsidiaries
1-1
