Attachment 1
LOAN AGREEMENT
between
FLEMING COMPANIES, INC.
and
___________________________
___________, 1999
TABLE OF CONTENTS
Page
1. Loan Amount and Purpose . . . . . . . . . . . . . . . . . . . .1
2. Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2.1 Interest . . . . . . . . . . . . . . . . . . . . . . .1
2.2 Interest Moratorium. . . . . . . . . . . . . . . . . .1
2.3 Payments . . . . . . . . . . . . . . . . . . . . . . .1
3. Collateral and Security Agreement . . . . . . . . . . . . . . .1
4. Conditions of Lending . . . . . . . . . . . . . . . . . . . . .2
4.1 Loan Documents . . . . . . . . . . . . . . . . . . . .2
4.2 No Violation . . . . . . . . . . . . . . . . . . . . .2
4.3 No Default . . . . . . . . . . . . . . . . . . . . . .2
5. Representations and Warranties . . . . . . . . . . . . . . . . .2
5.1 Capacity and Power . . . . . . . . . . . . . . . . . .2
5.2 No Conflict. . . . . . . . . . . . . . . . . . . . . .2
6. Covenants of the Borrower . . . . . . . . . . . . . . . . . . .2
6.1 Mandatory Prepayments. . . . . . . . . . . . . . . . .2
6.2 Pledged Shares . . . . . . . . . . . . . . . . . . . .2
7. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
7.1 Nonpayment of Note . . . . . . . . . . . . . . . . . .3
7.2 Breach of Agreement. . . . . . . . . . . . . . . . . .3
7.3 Representations and Warranties . . . . . . . . . . . .3
7.4 Insolvency . . . . . . . . . . . . . . . . . . . . . .3
7.5 Receivership . . . . . . . . . . . . . . . . . . . . .3
7.6 Judgment . . . . . . . . . . . . . . . . . . . . . . .3
7.7 Termination for Cause. . . . . . . . . . . . . . . . .3
8. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
8.1 Termination. . . . . . . . . . . . . . . . . . . . . .4
8.2 Acceleration of Note . . . . . . . . . . . . . . . . .4
8.3 Selective Enforcement. . . . . . . . . . . . . . . . .4
8.4 Waiver of Default. . . . . . . . . . . . . . . . . . .4
9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . .4
9.1 Expenses . . . . . . . . . . . . . . . . . . . . . . .4
9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . .5
9.3 Severability . . . . . . . . . . . . . . . . . . . . .5
9.4 Construction and Venue . . . . . . . . . . . . . . . .5
9.5 No Waiver. . . . . . . . . . . . . . . . . . . . . . .5
9.6 Counterparts . . . . . . . . . . . . . . . . . . . . .6
Exhibit "A" - Promissory Note
Exhibit "B" - Security Agreement
Exhibit "C" - Form of UCC-1 Financing Statement
Exhibit "D" - Form of Stock Power Separate from Certificate
Exhibit "E" - Form of Notice to Transfer Agent
LOAN AGREEMENT
THIS AGREEMENT is entered into effective this ____ day of
___________, 1999, between _____________________, an individual
(the "Borrower"), and Fleming Companies, Inc., an Oklahoma
corporation (the "Lender").
W I T N E S S E T H:
1. Loan Amount and Purpose. Subject to the terms and
conditions of this Agreement, the Lender agrees to lend to the
Borrower such amounts as the Borrower may from time to time
request prior to April 1, 2004, but not to exceed principal
advances in the aggregate amount of _________________ Dollars
($____________). The loan proceeds will be used solely to
purchase shares of Lender's common stock, par value $2.50 per
share (the "Shares").
2. Note. The loans to be made hereunder will be evidenced
by the Promissory Note (the "Note") in the form of Exhibit "A"
attached hereto as a part hereof and payable on the following
terms:
2.1 Interest. Except as otherwise provided in Section 2.2
hereof and in the Note, the unpaid principal balance of
the Note will bear interest at the rate of seven
percent (7%) per annum. Interest will be payable
quarterly throughout the loan term commencing on
_____________, 1999, and on the last day of each
successive December, March, June and September
thereafter until the Note is paid in full. All
interest will be computed at a per diem charge for the
actual number of days elapsed on the basis of a year
consisting of three hundred sixty-five (365) days.
2.2 Interest Moratorium. Interest shall neither accrue nor
be payable so long as Borrower is the full time
employee of Lender. Interest shall accrue and be
payable as set forth in Section 2.1 from and after the
first day following Borrower's termination as a full
time employee of Lender.
2.3 Payments. Each payment on the Note will be applied
first to accrued and unpaid interest, if any, and the
remainder to the principal balance of the Note. The
entire unpaid principal balance of the Note, together
with all accrued and unpaid interest thereon, if any,
will be due and payable upon acceleration as provided
in the Note or, if not accelerated, on April 1, 2005.
3. Collateral and Security Agreement. Payment of the Note
will be secured by a first lien on and security interest
in the Collateral (as defined in the Security Agreement
in the form of Exhibit "B" attached hereto as a part
hereof; the "Security Agreement"). All existing and
future Collateral will be subject to the Security
Agreement.
4. Conditions of Lending. The obligation of the Lender to
perform this Agreement and to make the initial or any subsequent
advance under the Note is subject to the following conditions
precedent:
4.1 Loan Documents. This Agreement, the Note, the Security
Agreement, UCC-1 Financing Statements, Stock Powers,
the Notice to Transfer Agent, and any related documents
and all extensions, amendments and modifications
thereof (collectively the "Loan Documents") will have
been duly executed, acknowledged (where appropriate) by
all parties thereto and delivered to the Lender, all in
form and substance satisfactory to the Lender.
Borrower's spouse and any other joint owner of the
Collateral must execute and deliver a Security
Agreement, UCC-1 Financing Statement, Stock Power and
Notice to Transfer Agent to the Lender prior to any
advance being made hereunder.
4.2 No Violation. The advance shall not cause the Lender
to be in violation of any law, rule, regulation or
covenant applicable to the Lender.
4.3 No Default. There will have occurred and be continuing
no event of default as of the date of this Agreement or
the date of any advances under the Note.
5. Representations and Warranties. In order to induce the
Lender to enter into and perform the Loan Documents, the Borrower
represents and warrants to the Lender as follows:
5.1 Capacity and Power. The Borrower has adequate
capacity, power and legal right to enter into, execute,
deliver and perform the terms of the Loan Documents, to
borrow money, to give security for borrowings (either
alone or together with any additional Pledgor who has
executed the Security Agreement) and to consummate the
transactions contemplated by the Loan Documents.
5.2 No Conflict. The execution, delivery and performance
of the Loan Documents by the Borrower will not violate
any law, regulation, rule or any other agreement or
instrument binding on the Borrower or the Collateral.
6. Covenants of the Borrower. Until the expiration of the
Lender's obligation to advance funds under this Agreement and
payment in full of the Note:
6.1 Mandatory Prepayments. The Borrower will promptly
apply at least one-half of any cash proceeds and one
hundred percent (100%) of all distributions (other than
scheduled dividends) received in respect of the
Collateral as prepayments of principal amounts owing
under the Note. In the event of a voluntary sale,
shares cannot be released if such release would cause
the Lender to fail to satisfy Regulation U.
6.2 Pledged Shares. All Shares acquired by Borrower with
the proceeds of the Note and all Shares acquired by
Borrower relating to the Shares pledged as Collateral,
whether by dividend, stock split or otherwise, shall be
pledged to the Lender hereunder and shall immediately
be subject to the security interest created by the
Security Agreement. All certificates representing such
Shares shall be issued in the individual name of the
Borrower; provided that certificates evidencing Shares
may be registered jointly in the name of the Borrower
and any joint owner if such joint owner shall have
executed and delivered a Security Agreement, UCC-1
Financing Statement, Stock Powers and a Notice to
Transfer Agent. Borrower shall direct the transfer
agent or the issuer, as applicable, to deliver
certificates representing the Shares directly to the
office of Lender's Corporate Secretary.
7. Default. The Lender may terminate all of the Lender's
obligations under the Loan Documents and may declare the Note and
all other indebtedness and obligations of the Borrower owing to
the Lender to be due and payable if any of the following events
of default occur and have not been cured or waived by the Lender:
7.1 Nonpayment of Note. Default in payment when due of any
interest on or principal of the Note; or
7.2 Breach of Agreement. Default in the performance or
observance of any covenant contained in the Loan
Documents or under the terms of any other instrument
delivered to the Lender in connection with this
Agreement; or
7.3 Representations and Warranties. Any representation or
statement made or furnished to the Lender by or on
behalf of the Borrower proves to be false or erroneous
in any material respect or any warranty ceases to be
complied with in any material respect; or
7.4 Insolvency. The Borrower admits the inability to pay
the Borrower's debts as such debts mature; or any
bankruptcy, reorganization, readjustment of debt,
liquidation or receivership proceedings by or against
the Borrower is commenced under the Bankruptcy Code, as
amended, or any part thereof, or under any other laws,
for the relief of debtors, whether state or federal,
now or hereafter existing; or
7.5 Receivership. The appointment of a receiver or trustee
for the Borrower or for any substantial part of the
Collateral; or
7.6 Judgment. Entry by any court of a final judgment
against the Borrower attaching any part of the
Collateral by any means, including, without limitation,
levy, distraint, replevin or self-help, which is not
discharged or stayed within ten (10) days thereof; or
7.7 Termination for Cause. Borrower is terminated as an
employee of Lender for Cause as defined herein. For
purposes of this Agreement, "Cause" shall be deemed to
exist when Borrower shall have committed any
intentional act which involves moral turpitude and
which causes a significant adverse effect on Borrower,
its business, properties or prospects.
8. Remedies. On the occurrence of an event of default the
Lender may, at the Lender's option:
8.1 Termination. Terminate the Lender's obligations
hereunder, including the obligation to make any
advances under the Note.
8.2 Acceleration of Note. Declare the Note and all sums
due pursuant to the Loan Documents to be immediately
due and payable, whereupon the same will become
forthwith due and payable, and the Lender will be
entitled to proceed to selectively and successively
enforce the Lender's rights under the Loan Documents or
any other instruments delivered to the Lender in
connection with the Loan Documents; provided that if
any event of default specified in Sections 7.4, 7.5 or
7.6 shall occur, all amounts owing under the Loan
Documents, including the Note, shall thereafter become
due and payable concurrently therewith, and the
Lender's obligations hereunder shall automatically
terminate, without presentment, demand, protest, notice
of default, notice of acceleration or intention to
accelerate or other notice of any kind, all of which
the Borrower hereby expressly waives; and further
provided that if any event of default specified in
Section 7.7 shall occur, all amounts owing under the
Loan Documents, including the Note, shall become due
and payable on the ninetieth (90th) day following such
termination without presentment, demand, protest,
notice of default, notice of acceleration or intention
to accelerate or other notice of any kind, all of which
the Borrower hereby expressly waives.
8.3 Selective Enforcement. In the event the Lender elects
to selectively and successively enforce the Lender's
rights under any one or more of the instruments
securing payment of the indebtedness evidenced by the
Note, such action will not be deemed a waiver or
discharge of any other lien or encumbrance securing
payment of any of the indebtedness evidenced by the
Note until such time as the Lender has been paid in
full all sums advanced by the Lender plus all accrued
interest thereon.
8.4 Waiver of Default. The Lender may, by an instrument or
instruments in writing, signed by the Lender, waive any
default which has occurred and any of the consequences
of such default, and, in such event, the Lender and the
Borrower will be restored to their respective former
positions, rights and obligations hereunder. Any
default so waived will, for all purposes of this
Agreement, be deemed to have been cured and not to be
continuing, but no such waiver will extend to any
subsequent or other default or impair any consequence
of such subsequent or other default.
9. Miscellaneous. It is further agreed as follows:
9.1 Expenses. All reasonable out-of-pocket expenses
incurred by the Lender in connection with the
enforcement of the Loan Documents including, without
limitation, reasonable attorneys' fees, will be paid by
the Borrower.
9.2 Notices. All notices, requests and demands will be
served by hand delivery, telefacsimile or by registered
or certified mail, with return receipt requested, as
follows:
To the Borrower: _________________________
_________________________
_________________________
Fax No. ( ) _____________
To the Lender: Fleming Companies, Inc.
P.O. Box 26647
Oklahoma City, Oklahoma 73126-0647
Fax No. (405) 841-8504
Attention: Treasury Department/Margin Loans
or at such other address as either party designates for
such purpose in a written notice to the other party.
Notice will be deemed to have been given on the date
actually received in the event of personal or
telefacsimile delivery or on the date two (2) days
after notice is deposited in the mail, properly
addressed, postage prepaid.
9.3 Severability. In the event any one or more of the
provisions contained in any of the Loan Documents is
determined to be invalid, illegal or unenforceable in
any respect in any jurisdiction, the validity, legality
and enforceability of such provision or provisions will
not in any way be affected or impaired thereby in any
other jurisdiction nor will the validity, legality and
enforceability of the remaining provisions contained in
the Loan Documents in any way be affected or impaired
thereby.
9.4 Construction and Venue. This Agreement and the
documents issued hereunder are executed and delivered
as an incident to a lending transaction negotiated and
to be performed in Oklahoma City, Oklahoma. The Loan
Documents are intended to constitute a contract made
under the laws of the State of Oklahoma and to be
construed in accordance with the internal laws of the
State of Oklahoma. The descriptive headings of the
paragraphs of this Agreement are for convenience only
and are not to be used in the construction of the
content of this Agreement. All actions relating to or
arising under the Loan Documents will be instituted in
the courts of the State of Oklahoma sitting in Oklahoma
County, Oklahoma, or the United States District Court
for the Western District of Oklahoma, and the Borrower
irrevocably and unconditionally waives any objection to
the venue in such court and any claim that any action
has been brought in an inconvenient forum.
9.5 No Waiver. No advance of loan proceeds under the Loan
Documents will constitute a waiver of any of the
Borrower's representations, warranties, conditions or
covenants under the Loan Documents.
9.6 Counterparts. This Agreement may be executed via
telefacsimile in two or more counterparts and it will
not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof. Each
counterpart will be deemed an original, but all
counterparts together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the Borrower and the Lender have
executed this Agreement effective on the date first above written.
______________________________
__________________, individually
(the "Borrower")
FLEMING COMPANIES, INC.,
an Oklahoma corporation
By:_______________________________
_______________________________
(the "Lender")
Attachment 2
EXHIBIT A
PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, ______________________,
an individual (the "Borrower"), promises to pay to the order of
Fleming Companies, Inc., an Oklahoma corporation (the "Lender"),
at P.O. Box 26647, Oklahoma City, Oklahoma 73126-0647, or at such
other place as may be designated in writing by the holder of this
Note, the principal sum as set forth on Schedule 1 attached
hereto and made a part hereof as follows:
Prior to default, the unpaid principal balance of this Note
will bear interest at seven percent (7%) per annum, payable
quarterly throughout the loan term commencing on the date
first indicated on Schedule 1, and on the last day of each
successive December, March, June and September thereafter
until this Note is paid in full. All interest will be
computed at a per diem charge for the actual number of days
elapsed on the basis of a year consisting of three hundred
sixty five (365) days; provided, however, that interest
shall neither accrue nor be payable so long as Borrower
remains the full-time employee of Lender.
All payments will be applied first to any accrued and unpaid
interest on this Note and the remainder to the principal
balance of this Note. The entire unpaid principal balance
of this Note, together with all accrued and unpaid interest
thereon, if any, will be due and payable upon acceleration
hereunder or, if not accelerated, on April 1, 2005.
The Borrower will promptly apply not less than 50% of any
cash proceeds and 100% of any distributions (other than
scheduled dividend payments) received in respect of the
Collateral as prepayments of the principal amount owing
under the Note.
Except as otherwise defined herein all terms defined in the
Loan Agreement of even date herewith between the Borrower and the
Lender (the "Loan Agreement") will have the same meanings herein
as therein. Any sum not paid when due will bear interest at
nine percent (9%) per annum and will be paid at the time of and
as a condition precedent to the curing of any default under the
Loan Documents. During the existence of any such default, the
holder of this Note may apply payments received on any amount due
hereunder as the holder may determine. The Borrower will have
the right to prepay this Note in whole or in part at any time
without penalty.
Advances and payments hereunder shall be recorded on
Schedule 1 to this Note and initialed by Borrower. Schedule 1
shall be prima facie evidence of all advances and payments made
under the Note and of the unpaid balance of this Note. All
advances hereunder shall be made by the Lender in accordance with
the terms of the Loan Agreement.
All Shares acquired by Borrower with the proceeds of this
Note and all Shares acquired by Borrower relating to the Shares
pledged as Collateral hereunder, whether by dividend, stock
split, or otherwise, shall be pledged to the Lender hereunder and
shall immediately be subject to the security interest created by
the Security Agreement entered into in connection herewith. All
certificates representing such Shares shall be registered in
Borrower's individual name; provided that certificates evidencing
Shares may be registered jointly in the name of any joint owner
if such joint owner shall have executed and delivered to the
Lender a Security Agreement, UCC-1 Financing Statement, Stock
Powers and a Notice to Transfer Agent with respect to such
Shares. Borrower shall direct the transfer agent or the issuer
of the Shares, as applicable, to deliver certificates representing
the Shares directly to the office of Lender's Corporate Secretary.
The Borrower agrees that if, and as often as, this Note is
placed in the hands of an attorney for collection or to defend or
enforce any of the holder's rights hereunder or under any
instrument securing payment of the same, the Borrower will pay to
such holder its reasonable attorneys' fees and all reasonable
expenses incurred in connection therewith, whether or not an
action shall be instituted to enforce this Note.
This Note is given by the Borrower and accepted by the
holder hereof pursuant to a lending transaction contracted,
consummated and to be performed in Oklahoma City, Oklahoma, and
this Note is to be construed according to the laws of the State
of Oklahoma.
This Note is issued subject to the terms of the Loan
Agreement and is secured by the Loan Documents. On the breach of
any provision of this Note, or any provision of the Loan
Documents at the option of the holder, the entire unpaid
indebtedness evidenced by this Note will become due, payable and
collectible then or thereafter as the holder may elect,
regardless of the date of maturity of this Note. Notice of the
exercise of such option is hereby expressly waived. Failure by
the holder to exercise such option will not constitute a waiver
of the right to exercise the same in the event of any subsequent
default.
The failure of the Lender to exercise any of the remedies or
options set forth in this Note, or in any instrument securing
payment hereof, upon the occurrence of one or more events of
default, shall not constitute a waiver of the right to exercise
the same or any other remedy at any subsequent time in respect to
the same or any other event of default. The acceptance by the
Lender of any payment which is less than the total of all amounts
due and payable at the time of such payment shall not constitute
a waiver of the right to exercise any of the foregoing remedies
or options at that time or any subsequent time, or nullify any
prior exercise of such remedy or option, without the express
consent of the Lender.
Time is of the essence of each obligation of the Borrower
hereunder.
For the purposes of computing interest under this Note,
payments of all or any portion of the principal sum owing under
this Note will not be deemed to have been made until such
principal payments are received by the Lender in collected funds.
The makers, endorsers, sureties, guarantors and all other
persons who may become liable for all or any part of this
obligation severally waive presentment for payment, protest,
demand and notice of nonpayment. Said parties consent to any
extension of time (whether one or more) of payment hereof, the
modification (whether one or more) of payment hereof, release or
substitution of all or part of the security for the payment
hereof or release of any party liable for payment of this
obligation. Any such extension or release may be made without
notice to any such party and without discharging such party's
liability hereunder.
IN WITNESS WHEREOF, the Borrower has executed this
instrument effective the date first above written.
___________________________________
___________________,individually
(the "Borrower")
Attachment 3
EXHIBIT B
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is executed effective the ____ day
of ____________, 1999, between _____________________, an
individual (the "Debtor" and a "Pledgor" hereunder), and
_____________________, an individual (one of the "Pledgors"
hereunder; collectively, the "Pledgors"), each having a notice
address of ____________________________, and Fleming Companies,
Inc., an Oklahoma corporation having a notice address at P.O. Box
26647, Oklahoma City, Oklahoma 73126-0647 (the "Secured Party").
W I T N E S S E T H :
WHEREAS, the Debtor is liable to the Secured Party under
that certain Promissory Note of even date herewith (the "Note")
in connection with that certain Loan Agreement (the "Loan
Agreement") of even date herewith between the Debtor and the
Secured Party; and
WHEREAS, as a material condition precedent to the Secured
Party's entering into the Loan Agreement, the Pledgors have
agreed to secure payment of the Note by granting the Secured
Party a lien, security interest and pledge covering certain
assets of the Pledgors; and
WHEREAS, each Pledgor wishes to grant to each other Pledgor,
severally, an irrevocable power of attorney to amend and modify
the list of assets covered by this Security Agreement attached
hereto as Schedule I.
NOW, THEREFORE, (i) in order to comply with the terms and
conditions of the Loan Agreement; (ii) for and in consideration
of the premises and the agreements herein contained; and (iii)
for other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, the Pledgors
hereby agree with the Secured Party as follows:
1. Definitions. Unless otherwise defined herein, all
terms which are defined in the Loan Agreement will have the same
meanings herein as therein unless the context otherwise requires,
and all terms used herein which are defined in the Oklahoma
Uniform Commercial Code ("UCC") will have the same meanings
herein unless the context otherwise requires.
2. Security Interest. As collateral security for the
Secured Indebtedness, the Pledgors hereby grant to the Secured
Party a security interest in, an assignment of, and a general
lien upon the following described property (the "Collateral"):
2.1 all of the Pledgors' right, title and interest in and
to the shares of common stock of Fleming Companies,
Inc., par value $2.50 per share, described at Schedule
I attached hereto (as such schedule may be amended from
time to time by the Secured Party or by one or more of
the Pledgors), and all certificates representing such
property, and all tangible and intangible rights in
connection therewith and all accounts, contract rights
and general intangibles relating thereto (the "Shares");
2.2 any additional Shares from time to time delivered to or
deposited with the Secured Party as security for the
obligations of the Debtor to the Secured Party or
otherwise pursuant to the terms of this Agreement,
including all Shares purchased with the proceeds of the
Note and any additional Shares pledged by Pledgors
pursuant to the Loan Agreement or otherwise; and
2.3 all cash, securities, dividends (whether cash, property
or stock), preferential, conversion or other rights
attaching to the Shares, all distributions or payments
in partial or complete liquidation or redemption or as
a result of reclassifications, readjustments,
reorganizations or changes in the capital structure of
the issuer of the Shares and all rights and privileges
pertaining thereto and all subscriptions, warrants,
options and any other rights issued by the issuer of
the Shares or any other person upon or in connection
with the Shares and all other proceeds, products,
additions to, replacements of, substitutions for and
accessions of any and all Collateral described in this
Section 2.
3. Upon the prepayment of all or any portion of the
principal amount of the Secured Indebtedness, Borrower shall be
entitled to receive, free and clear of the security interest
created by the Loan Documents, certificates representing that
number of Shares equal to the product of (x) the number of Shares
subject to the Security Agreement immediately prior to the
prepayment multiplied by (y) a fraction, the numerator of which
shall be the dollar amount of the principal prepayment and the
denominator of which shall be the principal amount of the Secured
Indebtedness immediately prior to the prepayment; provided,
however, that no collateral shall be released if the Secured
Party would not be in compliance with Reg. U immediately
following such proposed release. Certificates shall be delivered
to Borrower as soon as practicable after release hereunder.
4. Secured Indebtedness. The security interest granted
hereby in the Collateral is given to secure the Debtor's payment
of: (a) the Note together with interest thereon, if any; (b) all
extensions, renewals, amendments, modifications, substitutions
and changes in form to the Note; (c) all costs and expenses
incurred in connection with the collection of the Note and
enforcement of the Loan Documents and the Secured Party's rights
under this Agreement and all other Loan Documents, including
attorneys' fees and expenses; (d) all advances made by the
Secured Party to protect the security hereof, including advances
made for or on account of levies, insurance, repairs, taxes and
for maintenance or recovery of the Collateral, together with
interest thereon at the rate specified in the Note; and (e)
performance of the agreements herein set forth (the foregoing
items (a) through (e) are collectively referred to herein as the
"Secured Indebtedness").
5. Debtors' Representations and Covenants. The Pledgors
hereby warrant, represent and agree as follows:
5.1 Principal Place of Business. The Debtor's principal
place of business is P.O. Box 26647, Oklahoma City,
Oklahoma 73126-0647.
5.2 Title. The Pledgors have absolute title to the
Collateral free and clear of all liens, encumbrances,
negative pledges and security interests except the
security interest hereby granted to the Secured Party,
and the Pledgors warrant and will defend the same unto
the Secured Party against the claims and demands of all
other persons and parties whomsoever.
5.3 Transfers. Without the prior written consent of the
Secured Party, the Pledgors agree that the Pledgors
will not sell, exchange or in any manner dispose of any
of the Collateral or any interest therein nor permit
any other lien, encumbrance or security interest to
attach thereto except those contemplated herein.
5.4 Secured Party's Security Interest. This Agreement
creates a valid and binding security interest in the
Collateral securing the Secured Indebtedness. There
are no consents required in connection with the grant
by the Pledgors of the security interests in the
Collateral. The Pledgors have good, right and lawful
authority to pledge the Collateral in the manner hereby
done or contemplated. All filings and other actions
necessary or appropriate to perfect or protect such
security interest will be or have been duly taken.
5.5 Further Assurances. The Pledgors will from time to
time sign, execute, deliver and file, alone or with the
Secured Party, any financing statements, stock powers,
notices to issuers of securities constituting
collateral security, security agreements or other
documents; procure any instruments or documents as may
be reasonably requested by the Secured Party; and take
all further action that may be necessary or desirable,
or that the Secured Party may reasonably request, to
confirm, perfect, preserve and protect the security
interests intended to be granted hereby, and in
addition, the Pledgors hereby authorize the Secured
Party to execute and deliver on behalf of the Pledgors
and file such financing statements, stock powers,
security agreements and other documents without the
signature of the Pledgors either in the Secured Party's
name or in the name of the Pledgors and as agent and
attorney-in-fact for the Pledgors. The Pledgors shall
do all such additional and further acts or things, give
such assurances and execute such documents or
instruments as the Secured Party requires to vest more
completely in and assure to the Secured Party its
rights under the Loan Documents.
5.6 Filing Reproductions. At the option of the Secured
Party, a carbon, photographic or other reproduction of
this Agreement or of a financing statement covering the
Collateral shall be sufficient as a financing statement
and may be filed as a financing statement.
5.7 Possession. Physical possession of the certificates
representing or evidencing the Shares, together with
duly executed stock powers, shall be delivered to and
held by Secured Party.
6. Secured Party's Expenditures. If the Pledgors fail to
make any expenditure or pay any sum necessary to discharge any
lien, encumbrance, levy, security interest or other charge on the
Collateral as required hereby, the Secured Party may but shall
not be required to make any expenditure for such purpose or
purposes and all sums so expended shall be payable on demand,
shall bear interest at the rate specified in the Note and all
such sums and interest will additionally be secured hereby. The
Pledgors will pay all costs of filing any financing, continuation
or termination statements with respect to the security interest
granted hereby in the Collateral.
7. Powers of Attorney. The Pledgors hereby grant the
following irrevocable powers of attorney:
7.1 Secured Party. The Secured Party is hereby fully
authorized and empowered (without the necessity of any
further consent or authorization from the Pledgors), and the
Pledgors hereby constitute, appoint and make the Secured
Party, the Pledgors' true and lawful attorney-in-fact and
agent for the Pledgors and in the Pledgors' name, place and
stead with full power of substitution, in the Secured
Party's name or the Pledgors' name or otherwise, for Secured
Party's sole use and benefit, but at the Pledgors' cost and
expense, to exercise, without notice, all or any of the
following powers at any time with respect to all or any of
the Collateral after the occurrence of any default under
this Agreement or any of the other Loan Documents which has
not been timely cured: (a) all voting rights, all other
corporate rights and all conversion, exchange, subscription
or other rights pertaining to the Shares, whether or not the
Shares have been registered in the Secured Party's name and
this Agreement will constitute the Pledgors' proxy to the
Secured Party for such purpose; (b) to demand, sue for,
collect, receive and give acquittance for any and all monies
due or to become due by virtue thereof and otherwise deal
with proceeds; (c) to receive, take, endorse, assign and
deliver any and all checks, notes, drafts, documents and
other negotiable and non-negotiable instruments and chattel
paper taken or received by the Secured Party in connection
therewith; (d) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto; (e) to
sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof as fully and effectively
as if the Secured Party were the absolute owner thereof; and
(f) to extend the time of payment of any or all thereof and
to grant waivers and make any allowance or other adjustment
with reference thereto; provided, however, the Secured Party
shall be under no obligation or duty to exercise any of the
powers hereby conferred upon it and shall be without
liability for any act or failure to act in connection with
the collection of, or the preservation of any rights under,
any Collateral.
7.2 Other Pledgors. Each Pledgor is hereby fully
authorized and empowered severally by each other Pledgor
(without the necessity of any further consent or
authorization from any Pledgor), and each Pledgor hereby
severally constitutes, appoints and makes each other
Pledgor, the granting Pledgor's true and lawful
attorney-in-fact and agent to amend, modify or supplement
the list of shares pledged hereunder from time to time on
Schedule I attached hereto. This grant shall be irrevocable
and shall be deemed to be coupled with an interest until all
of the Secured Indebtedness is paid in full as the same
becomes due and payable and until the Secured Party, upon
request of the Pledgors, has executed a written termination
statement pursuant to Section 10 hereof.
8. Default; Remedies. On the occurrence of any event of
default under any of the Loan Documents or if the Pledgors fail
to keep, observe, comply with and perform all of the material
obligations and undertakings under this Agreement or any of the
other Loan Documents or fail to pay any principal or interest on
the Note when due, then, and in any such event, the Secured Party
may, at its option and without notice to any party, declare all
or any portion of the Secured Indebtedness to be due and payable
and may proceed to enforce payment of the same, to exercise any
or all rights and remedies provided herein, in the other Loan
Documents, and by the UCC and otherwise available at law or in
equity. All remedies hereunder are cumulative, and any
indulgence or waiver by the Secured Party shall not be construed
as an abandonment of any other right hereunder or of the power to
enforce the same or another right at a later time. Whether the
Secured Party elects to exercise any other rights or remedies
under this Agreement or applicable law, the Secured Party will be
entitled to have a receiver appointed to take possession of the
Collateral without notice, which notice the Pledgors hereby
waive, notwithstanding anything contained in this Agreement or
any law heretofore or hereafter enacted.
9. Secured Party's Duties. The powers conferred upon the
Secured Party by this Agreement are solely to protect its
interest in the Collateral and will not impose any duty upon the
Secured Party to exercise any such powers. The Secured Party
shall be under no duty whatsoever to make or give any
presentment, demand for performance, notice of nonperformance,
protest, notice of protest, notice of dishonor, or other notice
or demand in connection with any of the Collateral or the Secured
Indebtedness, or to take any steps necessary to preserve any
rights against prior parties. The Secured Party shall not be
liable for failure to collect or realize upon any or all of the
Secured Indebtedness or Collateral, or for any delay in so doing,
nor shall the Secured Party be under any duty to take any action
whatsoever with regard thereto.
10. Continuing Agreement. This is a continuing Agreement
and the grant of a security interest hereunder shall remain in
full force and effect and all the rights, powers and remedies of
the Secured Party hereunder shall continue to exist until all of
the Secured Indebtedness is paid in full as the same becomes due
and payable and until the Secured Party, upon request of the
Pledgors, has executed a written termination statement,
reassigned to the Pledgor, without recourse, the Collateral and
all rights conveyed hereby and returned possession of any
Collateral in the Secured Party's possession to the Pledgors.
11. Preservation of Liability. Neither this Agreement nor
the exercise by the Secured Party of (or the failure to so
exercise) any right, power or remedy conferred herein or by law
shall be construed as relieving any person liable on the Secured
Indebtedness from liability on the Secured Indebtedness and for
any deficiency thereon.
12. Waivers. It is the intention of the Pledgors and
Secured Party that the validity of this Security Agreement shall
not be impaired by any defenses given to sureties or guarantors
at law or in equity. Nonexercise by the Secured Party of any
right or remedy of the Secured Party provided in the Note, Loan
Agreement or other Loan Documents shall in no manner affect the
validity or enforceability of this Agreement or give any Pledgors
any recourse against the Secured Party.
12.1 Certain Actions. Each Pledgor agrees that from time to
time, without affecting the Pledgors' obligations
hereunder or the Secured Party's rights in the
Collateral, and without giving notice to or obtaining
the consent of any Pledgor, and without liability on
the Secured Party's part, the Secured Party may, at its
option, (i) extend the time for payment of the Note or
any interest thereon, (ii) release anyone liable under
the Loan Agreement or Note; (iii) renew, rearrange,
consolidate or modify the Note; (iv) take or release
any security or additional security for the Note or
Loan Agreement; (v) increase or decrease the rate of
interest payable on the Note; or (vi) grant any other
leniencies, indulgences, or compromises under the Loan
Agreement or Note as the Secured Party may deem
appropriate or desirable.
12.2 Certain Defenses. Each Pledgor hereby waives
diligence, presentment, demand, notice of demand,
notice of nonpayment or dishonor, protest, notice of
protest and all other notices of any kind whatsoever as
to the Note, or any renewal, extension, rearrangement,
consolidation or modification thereof. Each Pledgor
agrees that it shall not be necessary for the Secured
Party, in order to enforce this Agreement, first, (i)
to exhaust its remedies against the Debtor, any
guarantor or others liable on the obligations evidenced
by the Note or (ii) to enforce the Secured Party's
rights in any other security given to secure the Note.
Each Pledgor further waives, to the fullest extent
permitted by law, (i) all defenses given to sureties or
guarantors at law or in equity other than the actual
payment of the sums evidenced by the Note and secured
by this Agreement and the performance of the other
covenants and agreements contained herein and (ii) any
defense it may have to any liability hereunder based on
any asserted lack of diligence, delay in prosecuting
any action with regard to the Note, or any impairment
of any other security for payment of the Note.
12.3 Additional Waivers. The validity of this Agreement as
to the indebtedness secured by the Note shall not be
affected in any manner whatsoever on account of any or
all of the following: (i) incapacity, death,
disability, dissolution or termination of any person or
entity; (ii) the failure of the Secured Party to file
or enforce a claim against the estate (either in
administration, bankruptcy or other proceedings) of the
Debtor, any Pledgor or any other person or entity;
(iii) any defenses, setoffs or counterclaims which may
be available to the Debtor or any other person or
entity; (iv) any modifications, extensions, amendments,
consents, releases or waivers with respect to the Note
or any other instrument now or hereafter securing the
payment of the Note, or any guaranty of the Note; (v)
any failure of the Secured Party to give any notice to
any Pledgor of any default under any other instrument
securing payment of the Note; or (vi) any impairment,
modification, change, release or limitation of the
liability of, or stay of actions or lien enforcement
proceedings against, the Debtor, its Collateral or its
estate in bankruptcy resulting from the operation of
any present or future federal or state statute relating
to bankruptcy or insolvency or from the decision of any
court relating thereto. The Secured Party shall not be
required to pursue any other remedies before invoking
the benefits of this Agreement and, specifically, it
shall not be required to exhaust its remedies against
the Debtor or any guarantor or surety or to proceed
against any other security now or hereafter existing
for the payment of any of the indebtedness evidenced by
the Note. The Secured Party may exercise its rights
hereunder without bringing a separate action against
the Debtor.
13. Notices. Any notice or demand under this Agreement or
in connection with this Agreement may be given at the addresses
set forth in the initial paragraph of this Agreement or by
telefacsimile, but actual notice, however given or received, will
always be effective.
14. Successors and Assigns. The covenants and agreements
herein contained by or on behalf of the Pledgors shall bind the
Pledgors, and the Pledgors' legal representatives, successors and
assigns and shall inure to the benefit of the Secured Party and
the Secured Party's successors and assigns.
15. Invalidity. If any provision hereof shall for any
reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof.
16. Construction. This Agreement will be governed by and
construed in accordance with the laws of the State of Oklahoma
applicable to contracts made and to be performed entirely within
the State of Oklahoma.
IN WITNESS WHEREOF, this Agreement is executed effective the
date first above written.
___________________________________
____________________, individually
(the "Debtor" and a "Pledgor")
___________________________________
_____________________, individually
(Additional "Pledgor")
FLEMING COMPANIES, INC.,
an Oklahoma corporation
By:________________________________
________________________________
(the "Lender")