EXHIBIT 10.24
REPAYMENT AND STOCK PLEDGE AGREEMENT
This Repayment and Stock Pledge Agreement (this "Agreement" or "Pledge
Agreement") is made as of November 24, 1998 between Fresh Enterprises, Inc., a
California corporation ("Pledgee"), and Louis A. Siracusa ("Pledgor").
Recitals
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A. Pursuant to Pledgor's purchase of shares of Pledgee's common stock,
no par value ("Common Stock"), under the Restricted Stock Purchase Agreement
dated November 24, 1998 (the "Purchase Agreement"), between Pledgor and Pledgee
under Pledgee's 1998 Stock Plan, as amended (the "Stock Plan"), and Pledgor's
payment for such shares with monies advanced pursuant to that certain promissory
note executed by Pledgor in favor of the Pledgee dated November 24, 1998 (the
"Note"), Pledgor has purchased 80,519 shares of Common Stock (the "Shares") at a
price of $6.80 per share, for a total purchase price of $547,529.20.
B. It is a condition precedent to the extension of credit pursuant to
the Note that the Pledgor shall have executed and delivered this Pledge
Agreement in favor of the Pledgee.
NOW, THEREFORE, in consideration of the foregoing and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Creation and Description of Security Interest. Pledgor hereby grants a
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lien on and pledges all of the Shares (herein sometimes referred to as the
"Collateral") represented by certificate number 5, duly endorsed in blank or
with executable stock powers in form and substance satisfactory to Pledgee, and
herewith delivers said certificate to the Secretary of Pledgee (the "Escrow
Agent"), who shall hold said certificate subject to the terms and conditions of
this Pledge Agreement.
The pledged stock shall be held by the Escrow Agent as security for the
repayment of the Note, and any costs and expenses incurred in the enforcement or
attempted enforcement of the Note, and any extensions or renewals thereof, and
the Escrow Agent shall not encumber, sell or otherwise dispose of such Shares
except in accordance with the provisions of this Pledge Agreement.
2. Pledgor's Representations and Covenants. Pledgor represents and
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covenants to Pledgee, its successor and assigns, as follows:
(a) Pledgor will pay the principal sum of the Note secured hereby,
together with interest thereon, at the time and in the manner provided
in the Note.
(b) The Shares are free of all other encumbrances, defenses and
liens (other than the lien granted hereunder), and Pledgor will not
encumber or allow to be encumbered the Shares without the prior written
consent of Pledgee or enter into any agreement that could restrict
Pledgee's exercise of its rights hereunder or under the Note.
(c) Pledgor shall pay, prior to the delinquency date, all taxes,
liens,
assessments and other charges levied against the Collateral, and in
the event Pledgor fails to do so, Pledgee shall have the right, but
not the obligation, to pay all or any portion of such taxes and
charges without contesting the validity or legality thereof. Any
payment made by Pledgee pursuant to this Section 2(c) shall become part
of the indebtedness of Pledgor secured hereunder, and until paid by
Pledgor, shall bear interest at the default rate per annum set forth in
the Note.
3. Voting Rights. During the term of this pledge, Pledgor shall vote the
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Shares pledged hereunder solely in accordance with the provisions of the
Shareholders' Agreement.
4. Stock Adjustments. In the event during the term of this Agreement of
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any stock dividend, reclassification, readjustment or other changes declared or
made in the capital structure of Pledgee, all new, substituted and additional
shares or other securities issued by reason of any such change shall be
delivered to and held by the Pledgee under the terms of this Pledge Agreement
in the same manner as the Shares originally pledged hereunder. In the event of
substitution of such securities, Pledgor, Pledgee and Escrow Agent shall
cooperate and execute such documents as are reasonable so as to provide for the
substitution of such Collateral and, upon such substitution, references to
"Shares" in this Pledge Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Warrants and Rights. In the event that, during the term of this
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Agreement, subscription warrants or other rights or options shall be issued in
connection with the Shares, such rights, warrants and options shall be the
property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the Shares then held by
Pledgee shall be immediately delivered to Pledgee, to be held under the terms
of this Agreement in the same manner as the Shares pledged hereunder.
6. Repayment. Pledgor hereby agrees that at any time if Borrower shall
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have received any cash payment or other distribution in respect of, or upon
transfer, sale or other disposition of, the Shares, then and in each such case,
Pledgor shall immediately deliver to Pledgee such amount as in partial or full
payment of principal and interest on the Note.
7. Default. Pledgor shall be deemed to be in default of the Note and of
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this Pledge Agreement upon the occurrence of any of the following events (each
such event, an "Event of Default"):
(a) Payment of principal or interest on the Note shall be
delinquent for a period of 30 days or more beyond the due date
thereof; or
(b) Pledgor fails to perform any of the covenants or other
agreements set forth in this Agreement for a period of 10 days; or
(c) Any representation or warranty herein shall be untrue in
any material respect; or
(d) Pledgee shall cease to have a valid perfected first
priority lien on all or any part of the Collateral.
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8. Pledgee's Rights Upon or Event of Default.
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(a) In the case of an Event of Default, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor,
and Pledgee shall thereafter be entitled to pursue all remedies
available to a secured party under the California Uniform Commercial
Code in effect from time to time (whether or not applicable to the
Collateral) or available at law or equity or otherwise.
(b) In the case of an Event of Default, in addition to any
other rights or remedies otherwise available, Pledgee may, without
notice and at its option, with respect to any Collateral which shall
then be in, or shall thereafter come into, the possession or custody of
Pledgee, Pledgee may sell or cause the same to be sold at any broker's
board or at any public or private sale, in one or more sales or lots,
at such price or prices as Pledgee may deem best, for cash or on credit
or for future delivery, without assumption of any credit risk. The
purchaser of any or all Collateral so sold shall thereafter hold the
same absolutely, free from any lien, encumbrance or right of any kind
whatsoever. Unless any of the Collateral threatens to decline speedily
in value or is or becomes of a type sold on a recognized market,
Pledgee will give Pledgor reasonable notice of the time and place of
any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Collateral
conducted in conformity with reasonable commercial practices of banks,
insurance companies, commercial finance companies or other financial
institutions disposing of property similar to the Collateral shall be
deemed to be commercially reasonable. Any requirements of reasonable
notice shall be met if such notice is mailed to the Pledgor at least
ten (10) days before the time of the sale or disposition. Any other
requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived. Pledgee may, in its own name or in the
name of a designee or nominee, buy any of the Collateral at any public
sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and attorneys' fees, expenses and
disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Collateral. Pledgee shall be under no
obligation to delay a sale of any of the Collateral for the period of
time necessary to register such securities for public sale under the
Securities Act of 1933, as amended (the "Securities Act"), or under any
other applicable securities laws. In view of the fact that the
Securities Act and other applicable securities laws may impose certain
restrictions on the method by which a sale of the Collateral may be
effected, Pledgor agrees that upon the occurrence of an Event of
Default, Pledgee may, from time to time, attempt to sell all or any
part of the Collateral
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by means of a private sale, restricting the prospective purchasers to
those who will represent and agree that they are purchasing for
investment only and not for distribution. Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable to
Pledgor 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, Pledgor agrees that any such
private sale shall be deemed to have been made in a commercially
reasonable manner and that Pledgee shall have no obligation to engage
in public sales and no obligation to delay the sale of any Collateral
for the period of time necessary to permit the registration thereof for
a form of public sale requiring registration under the Securities Act
or under any other applicable securities laws. Pledgor waives any
claims against Pledgee arising by reason of the fact that the price at
any private sale was less than the price that might have been obtained
at a public sale, even if Pledgee shall accept the first offer received
and does not offer the Collateral to more than one prospective
purchaser.
9. Withdrawal or Substitution of Collateral. Pledgor shall not sell,
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withdraw, pledge, substitute, grant any options in or otherwise dispose of all
or any part of the Collateral without the prior written consent of Pledgee.
10. Term. The pledge of Shares set forth herein shall continue until the
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indefeasible payment in full in cash of all indebtedness secured hereby, at
which time the Shares shall be promptly delivered to Pledgor, without any
representation, warranty or covenant thereto or any recourse in respect thereof.
11. Recourse. In addition to the Collateral pledged hereunder, as
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additional security for the payment and performance of all obligations of
Pledgor hereunder and under the Note, Pledgor hereby agrees that the Company
shall have recourse to personal assets of Pledgor (other than the Collateral)
in an amount not to exceed $13,682.30; provided, however, that Pledgee shall
have recourse to Pledgor's personal assets pursuant to this Section 11 only in
the event that the Fair Market Value of the Collateral in possession of Pledgee
at the Maturity Date is less than seventy-five percent (75%) of the outstanding
unpaid principal balance of the Note on such date. For purposes of this Section
11, "Fair Market Value" shall be determined pursuant to the Plan except in the
event the Common Stock is not publicly traded on an exchange or quoted on
NASDAQ or a successor quotation system, in which case the "Fair Market Value"
for purposes hereof shall be the value of the Collateral (determined without
additional premiums for control or discounts for minority interests or
restrictions on transfer) determined by an independent valuation consultant or
appraiser of recognized national standing selected by Pledgee and consented to
by Pledgor, which consent shall not be unreasonably withheld.
12. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
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proceeding is instituted by or against him, or if a receiver is appointed for
the property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, or the Pledgor shall take any action in furtherance of any of the
foregoing, or the Pledgor shall generally not, or shall be unable to, or shall
admit in writing his inability to, pay his debts as they become due, the entire
amount unpaid on the Note shall become immediately due and payable, and Pledgee
may proceed as provided in the case of an Event of Default.
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13. Invalidity of Particular Provisions. Pledgor and Pledgee agree that
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the enforceability or invalidity of any provision or provisions of this
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
14. Successors or Assigns. Pledgor and Pledgee agree that all of the terms
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of this Agreement shall be binding on their respective permitted successors and
assigns, and that the term "Pledgor" and the term "Pledgee" as used herein shall
be deemed to include, for all purposes, the respective designees, successors,
assigns, heirs, executors and administrators. Pledgor shall not assign or
otherwise transfer all or any of his rights and obligations hereunder without
the prior written consent of Pledgee, in its sole discretion. This Agreement
shall be freely assignable by Pledgee.
15. Defined Terms. Capitalized terms used herein without definition shall
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have the meanings ascribed to such terms under the Purchase Agreement or the
Stock Plan.
16. Governing Law. This Pledge Agreement shall be interpreted and
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governed by the internal laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Repayment and
Stock Pledge Agreement as of the day and year first above written.
/s/ Louis A. Siracusa
"PLEDGOR" ________________________________
Louis A. Siracusa
2392 Waipua
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Address
Paia, HI 96779
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"PLEDGEE" FRESH ENTERPRISES, INC.,
a California corporation
By: /s/ Frank M. Vest, Jr.
____________________________
Title: Secretary
__________________________
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