Document:

<PAGE>

                               PLEDGE AGREEMENT
                               ----------------

     This Pledge Agreement (the "Agreement") is made on July 5, 2000, by and
among the Khaledi Family Trust dated May 17, 1995, Parviz Vazin and Vida Vazin
(jointly and severally, the "Pledgor"), whose address is c/o K.V. Mart Co., 1245
E. Watson Center Road, Carson, California 90745-4207, Attention: President,
Unified Western Grocers, Inc., a California corporation ("Unified" or
"Pledgee"), whose address is 5200 Sheila Street, Commerce, California 90040,
Attention: Secretary, and Grocers Capital Company as bailee of the Pledged
Collateral ("GCC" or "Bailee"), whose address is 5200 Sheila Street, Commerce,
California 90040, Attention: Secretary.

     1.   Recital.  This Agreement is made with respect to the following facts
          -------
and circumstances:

               (a) Unified is entering into a Term Loan Agreement dated the date
     hereof (the "Loan Agreement") with  1999 Lawndale Associates LLC (the
     "Company"), and Pledgor has agreed to guaranty the Company's obligations
     pursuant to the Loan Agreement and a related $3,000,000 Promissory Note
     (the "Note").

               (b) Unified would not enter into the Loan Agreement unless the
     Pledgor agreed to enter into this Agreement, and the Pledgor, as a material
     inducement and consideration to Unified to enter into the Loan Agreement,
     is willing to execute and deliver this Agreement and agree to and be bound
     by its terms.

               (c) GCC, a wholly-owned subsidiary of Unified, has agreed to act
     as bailee of the Pledged Collateral on behalf of Unified pursuant to UCC
     (S) 9305, and currently holds the Pledged Collateral as pledgee pursuant to
     a Pledge Agreement dated March 26, 1999, between Pledgor and GCC (the
     "Prior Pledge").

     2.   Definitions.  In addition to capitalized terms elsewhere defined in
          -----------
this Agreement, the following terms shall have the following meanings:

          2.1  "Obligations" means all of the indebtedness, obligations and
                -----------
liabilities of the Pledgor to Unified, whether direct or indirect, joint or
several, absolute or contingent, liquidated or disputed, due or to become due,
now existing or hereafter arising under the Guaranty dated of even date (the
"Guaranty").

                                      -1-
<PAGE>

          2.2  "Pledged Collateral" means Pledgor's Securities, together with
                ------------------
all proceeds thereof, including any securities and monies received and at the
time held by Pledgee or Bailee hereunder.

          2.3  "Securities" means all stock and other securities of  K.V. Mart
                ----------
Co., a California corporation, now owned or hereafter acquired by Pledgor,
including, without limitation, the Securities listed on Exhibit A attached
hereto.

     3.   Pledge of Securities.
          --------------------

          3.1  Pledge.  To secure the Obligations, Pledgor hereby (a) grants to
               ------
Pledgee a first priority security interest in the Pledged Collateral; (b)
pledges, and acknowledges the prior deposit for security with GCC of, as bailee
for purposes of perfection, the Securities owned by Pledgor on the date hereof;
and (c) pledges, assigns, transfers, hypothecates, mortgages and sets over to
Pledgee all of Pledgor's right, title and interest in and to the Pledged
Collateral, (and in and to the certificates or instruments evidencing any
Pledged Collateral), to be held by Pledgee or Bailee upon the terms and
conditions set forth in this Agreement.

          3.2  Subsequently Acquired Securities.  If Pledgor shall acquire (by
               --------------------------------
purchase, stock dividend or otherwise) any additional Securities, at any time or
from time to time after the date hereof, Pledgor will forthwith pledge and
deposit such Securities as security with Pledgee and deliver to Pledgee or
Bailee certificates therefor accompanied by stock powers duly executed in blank
by Pledgor or such other instruments of transfer as are acceptable to Pledgee,
and will concurrently deliver to Pledgee a certificate executed by Pledgor
describing such Securities and certifying that the same have been duly pledged
with Pledgee or Bailee hereunder.

     4.   Representations and Warranties.  Pledgor represents and warrants that
          ------------------------------
on the date hereof:

          4.1  Securities.  The Securities consist of the number and type of
               ----------
Securities listed on Exhibit A attached hereto, Pledgor is the holder of record
and beneficial owner of such Securities, and such Securities are validly issued
and fully paid and nonassessable.

          4.2  Title.  Pledgor is, or will be, as the case may be, the legal,
               -----
record and beneficial owner of, and has good and marketable title to, the
Securities, pledged by it hereunder, subject to no security interest, lien,
adverse claim or other encumbrance (except the security interest created by this
Agreement).

          4.3  Authority.  Pledgor has full power, authority and legal right to
               ---------
pledge all Pledged Collateral pursuant to this Agreement and this Agreement
creates a valid, perfected security interest enforceable against the Pledged
Collateral, in which

                                      -2-
<PAGE>

Pledgor now has rights, and will create a valid, perfected security interest
enforceable against the Pledged Collateral in which Pledgor later acquires
rights when Pledgor acquires those rights, subject only to the rights of GCC
pursuant to the Prior Pledge.

          4.4  Consents.  No consent, filing, recording or registration is
               --------
required in connection with Pledgor's execution and delivery of this Agreement
and pledge of the Pledged Collateral, nor is any such required to perfect the
security interest in the Pledged Collateral granted under this Agreement.

          4.5  No Violations.  Neither the execution and delivery of this
               -------------
Agreement, nor the taking of any action in compliance with it, will violate or
breach any law, regulation, rule, order or judicial action binding on Pledgor or
any agreement or instrument to which Pledgor is a party, or result in the
creation of any lien, security interest, adverse claim or other encumbrance,
against the Pledged Collateral except that created by this Agreement and the
Prior Pledge.

          4.6  No Defaults.  No Default (as defined in Section 9 of this
               -----------
Agreement) has occurred or is continuing.

          4.7  Representations and Warranties.  Each of the representations and
               ------------------------------
warranties of Pledgors contained in the Purchase Agreement are true and correct.

     5.   Appointment of Agents; Endorsements.  Pledgee shall have the right to
          -----------------------------------
appoint one or more agents for the purpose of retaining physical possession of
the Securities, which may be held (in Pledgee's discretion) in the name of
Pledgor, endorsed or assigned in blank or in favor of Pledgee or any nominee or
nominees of Pledgee or an agent appointed by Pledgee, or in the name of Unified
as pledgee.

     6.   Voting Rights, Dividends and Distributions.
          ------------------------------------------

          6.1  Voting and Dividends.  Unless and until a Default (as defined in
               --------------------
Section 9 of this Agreement) shall have occurred and be continuing: (a) Pledgor
shall be entitled to vote any and all Securities and to give consents, waivers
or ratifications in respect thereof, provided that no vote shall be cast nor any
consent, waiver or ratification given or any action taken which would violate or
be inconsistent with any of the terms of this Agreement or which would cause a
violation of any of the covenants and agreements of the Company or the Pledgor
contained in the Loan Agreement or the Guaranty; and, (b) all cash dividends
payable in respect of the Pledged Collateral shall be paid to Pledgor, provided
that all cash dividends payable in respect of the Pledged Collateral which are
determined by Pledgee, in its discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital shall be
paid to Pledgee and retained by it as part of the Pledged Collateral.

                                      -3-
<PAGE>

          6.2  Distributions.  Whether or not a Default (as defined in Section 9
               -------------
of this Agreement) shall have occurred or be continuing, Pledgee shall be
entitled to receive directly, and to retain as part of the Pledged Collateral,
(a) all other or additional stock or securities or property (other than cash)
paid or distributed by way of dividend in respect of any Securities; (b) all
other or additional stock or other securities or property (including cash) paid
or distributed in respect of any Securities by way of stock split, spinoff,
split-up, reclassification, combination of shares or similar rearrangement; and,
(c) all other or additional stock or other securities or property (including
cash) which may be paid in respect of the Pledged Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of assets, liquidation or
similar corporate reorganization.

     7.   Covenants.  Pledgor covenants and agrees that: (a) Pledgor will defend
          ---------
Pledgee's right, title and security interest in and to the Pledged Collateral
against the claims and demands of all persons and entities; (b) Pledgor will pay
all expenses, including attorneys' fees, incurred by Pledgee in the perfection,
preservation, realization, enforcement and exercise of its rights under this
Agreement; (c) Pledgor will indemnify, defend and hold Pledgee harmless from and
against any and all claims, losses, liabilities, actions, costs and expenses
(including reasonable attorneys' fees and costs) suffered or incurred by Pledgee
arising out of or resulting from its interest in the Pledged Collateral; (d)
Pledgor will not sell or otherwise transfer or dispose of, grant any option or
right with respect to, or create, incur, assume or suffer to exist any lien,
security interest, claim or other encumbrance in or against the Pledged
Collateral or any portion of it (except the security interest created by this
Agreement); (e) Pledgor will give Pledgee notice of any litigation or adverse
claim concerning or involving the Pledged Collateral or any part of it; (f)
Pledgor will notify Pledgee promptly in writing of any Default (as defined in
Section 9 of this Agreement) or any event or occurrence that might have an
adverse effect on the Pledged Collateral or any part of it; (g) Pledgor will
execute and deliver to Pledgee all financing statements and other documents and
instruments that Pledgee requests, in order to maintain a valid, first priority
perfected security interest in the Pledged Collateral and every part of it; and,
(h) Pledgor will promptly furnish to Pledgee such reports and other information
relating to the Pledged Collateral and any part of it as Pledgee may from time
to time request.

     8.   Pledgee's Duties.  Pledgee and GCC, as its bailee, each has no duty or
          ----------------
liability for the Pledged Collateral except to exercise reasonable care while it
is in Pledgee's or GCC's possession and except as otherwise expressly set forth
in this Agreement. It is understood and agreed that the obligations of Pledgee
and GCC as holder of the Pledged Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. Without limiting the foregoing:

                                      -4-
<PAGE>

          8.1  Preservation of Rights.  Pledgee and GCC each shall not be
               ----------------------
required to take any steps necessary to preserve any rights in any Pledged
Collateral against prior parties or to protect, perfect, preserve or maintain
any security interest given to secure any Pledged Collateral.

          8.2  Reasonable Care.  Pledgee and GCC each shall be deemed to have
               ---------------
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if it deals with the Pledged Collateral in such
manner as Pledgee or GCC deals with similar property for its own account.

          8.3  Accountability.  Pledgee and GCC each shall be accountable only
               --------------
for any amounts it actually receives, and it shall not be liable to Pledgor for
any act or failure to act.

     9.   Default.  The occurrence of any one or more of the following shall
          -------
constitute a Default under this Agreement: (a) a breach or default by the
Company or the Pledgor under the Loan Agreement or the Guaranty or a breach or
default by the Company under the Note; (b) Pledgor fails or refuses to perform
or discharge any covenant or obligation under this Agreement, or any present or
further rider, amendment or supplement to this Agreement, or any other agreement
between Pledgor and Pledgee or GCC evidencing the Obligations or securing them;
(c) any representation or warranty made by or on behalf of Pledgor in or with
respect to this Agreement or made by or on behalf of Pledgor in or with respect
to the Purchase Agreement is false; (d) there is a seizure or attachment of, or
a levy on, the Pledged Collateral or any part of it; (e) Pledgor does or fails
to do anything that allows obligations to become due before their stated
maturity, or becomes insolvent or unable to meet its debts as they mature; or
(f) Pledgor files, or acquiesces in or consents to the filing of, any
proceedings under the Federal Bankruptcy Code or any other law providing for the
relief of debtors, or is the subject of any involuntary proceedings under the
Federal Bankruptcy Code or any other law providing for the relief of debtors and
such involuntary proceedings are not dismissed within thirty (30) days of their
commencement.

     10.  Remedies.  At any time when a Default has occurred and is continuing:
          --------

          10.1 Remedies.  In addition to any other rights or remedies which
               --------
Pledgee may have under this Agreement or at law or equity, Pledgee may:

               (a) Exercise any and all rights and remedies which Pledgee may
     have under or with respect to the Loan Agreement, the Note and the
     Guaranty, all to the extent and in such order as Pledgee may determine in
     its sole discretion.

                                      -5-
<PAGE>

               (b) Exercise any and all rights and remedies available to a
     secured party after default, including, without limitation, the rights and
     remedies of secured parties under the California Uniform Commercial Code.

               (c) Perform any of the Pledgor's obligations under this Agreement
     for the Pledgor's account, and any money expended or obligations incurred
     in doing so, including reasonable attorneys' fees and costs and interest at
     the highest rate permitted by law, will be charged to the Pledgor and
     secured by the security interest granted under this Agreement.

               (d) Receive all amounts payable in respect to the Pledged
     Collateral otherwise payable to Pledgor; transfer all or any part of the
     Pledged Collateral into Pledgee's or GCC's name or the name of its nominee
     or nominees; and, vote all or any part of the Pledged Collateral (whether
     or not transferred into the name of Pledgee or GCC) and give all consents,
     waivers and ratifications in respect of all or any part of the Pledged
     Collateral and exercise all rights, options and privileges and otherwise
     act with respect to the Pledged Collateral as thought Pledgee were the
     owner thereof (Pledgor hereby irrevocably constituting Pledgee the proxy
     and attorney-in-fact of Pledgor, with full power of substitution to do so).

               (e) At any time or from time to time to sell, assign and deliver,
     or grant options to purchase, all or any part of the Pledged Collateral, or
     any interest therein, at public or private sale, without demand of
     performance, advertisement or notice of intention to sell, or of the time
     or place of sale, or adjournment thereof, or redeem or otherwise (all of
     which are hereby waived by Pledgor), for cash, on credit or for other
     property, for immediate for future delivery without any assumption of
     credit risk, and for such price or prices and on such terms as Pledgee in
     its absolute discretion may determine, provided that notice of the time and
     place of any such sale shall be given to Pledgor in the manner provided in
     this Section 10.2 of this Agreement.  Pledgor hereby waives and releases to
     the fullest extent permitted by law any right or equity of redemption with
     respect to the Pledged Collateral, whether before or after sale under this
     Agreement, and all rights, if any, of marshaling the Pledged Collateral and
     any other security for any Obligations or otherwise.  At any such sale,
     unless prohibited by applicable law, Pledgee may bid for and purchase all
     or any part of the Pledged Collateral so sold free from any such right or
     equity of redemption.  Pledgee and GCC shall not be liable for failure to
     collect or realize upon any or all of the Pledged Collateral or for any
     delay in so doing nor shall Pledgee and GCC be under any obligation to take
     any action whatsoever with regard thereto.

          10.2 Notice of Sale.  Pledgee's notice of the time and place of public
               --------------
sale of the Pledged Collateral, or the time on or after which a private sale or
other

                                      -6-
<PAGE>

disposition of the Pledged Collateral will be made, is reasonable if given to
Pledgor in the manner for giving notices under this Agreement at least five (5)
days before the public or private sale.

          10.3 Pledgor's Duties.  Pledgor must assemble all records relating to
               ----------------
the Pledged Collateral and make them available to Pledgee as Pledgee directs,
and execute all documents and instruments on Pledgee's request that Pledgee
considers necessary or advisable to exercise its rights under this Agreement.

     11.  Registration.  If at any time when Pledgee shall determine to exercise
          ------------
its right to sell all or any Securities, such Securities or the part thereof to
be sold shall not, for any reason whatsoever, be effectively registered under
the Securities Act of 1933, as then in effect, Pledgee may, in its sole
discretion, sell any such Securities by private sale in such manner and under
such circumstances as Pledgee reasonably may deem necessary or advisable in
order that such sale may legally be effected without such registration, provided
that notice of the time and place of any such sale shall be given to Pledgor in
the manner provided in Section 10.2 of this Agreement and that such sale shall
be conducted in a commercially reasonable manner.  Without limiting the
generality of the foregoing, in any such event, Pledgee, in its sole discretion,
may proceed to make such private sale notwithstanding that a registration
statement for the purpose of registering such Securities or part thereof shall
have been filed under such Securities Act, may approach and negotiate with a
single possible purchaser to effect such sale, and may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Securities or any part thereof. In the event of any such sale, Pledgee
shall incur no responsibility or liability for selling all or any Securities at
a price which Pledgee may in good faith deem reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if such Securities were registered as aforesaid.

     12.  Termination.  When all Obligations have been irrevocably paid,
          -----------
performed and discharged in full, this Agreement shall terminate, and Pledgee,
at the request and expense of Pledgor, promptly will execute and deliver to
Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and, subject to satisfaction of all prior
obligations of Pledgor pursuant to the Prior Pledge, will assign, transfer and
deliver to Pledgor (without recourse and without any representation or warranty)
such of the Pledged Collateral as may be in the possession of Pledgee or GCC as
its bailee and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement.

                                      -7-
<PAGE>

     13.  Other Provisions.
          ----------------

          13.1 Expenses.  The Pledgor agrees to pay all attorneys' fees and all
               --------
other costs and expenses which may be incurred by Pledgee in the enforcement or
collection of this Agreement whether or not suit is filed.

          13.2 Interest.  All amounts required to be paid to Pledgee by the
               --------
Pledgor pursuant to the provisions of this Agreement shall bear interest from
the date upon which such amounts are due to the date of payment thereof at the
highest rate permitted by law.  All payments of such amounts by the Pledgor
shall include any such accrued interest.

          13.3 Governing Law.  The validity, construction and performance of
               -------------
this Agreement shall be governed by the laws, without regard to the laws as to
choice or conflict of laws, of the State of California.

          13.4 Entire Agreement.  This Agreement embodies the entire agreement
               ----------------
and understanding between Pledgee and the Pledgor pertaining to the subject
matter of this Agreement, and supersedes all prior agreements, understandings,
negotiations, representations and discussions, whether verbal or written, of
such parties, pertaining to that subject matter.

          13.5 Assignment; Binding Effect.  Neither this Agreement nor any
               --------------------------
rights or obligations under this Agreement may be assigned by the Pledgor
without the prior written consent of Pledgee. Subject to the foregoing, the
provisions of this Agreement shall bind and inure to the benefit of Pledgee and
the Pledgor and their respective heirs, executors, personal representatives,
successors and assigns.

          13.6 Notices.  Whenever Pledgee or the Pledgor desire or are required
               -------
to give any notice, demand or request with respect to this Agreement, each such
communication shall be in writing and shall be given by personal service or
mailed by Certified Mail, postage prepaid, return receipt requested, addressed
as set forth in the first paragraph of this Agreement.  Such communications sent
shall be effectively given when they are received by the addressee thereof, but
if sent by Certified Mail, they shall be effectively given three (3) days after
being deposited in the United States Mail. Pledgee, GCC and the Pledgor may
change their respective address for such communications by giving notice to the
other in conformity with this Section.

          13.7 Amendment and Waiver.  This Agreement may not be amended,
               --------------------
modified or supplemented except by a writing duly executed by the Pledgor and a
duly authorized officer of Pledgee.  No provision of this Agreement or right of
Pledgee under this Agreement can be waived except by a writing duly executed by
a duly authorized officer of Pledgee.  No waiver by Pledgee of a Default under
this Agreement shall be construed as a waiver of any subsequent or different
Default, and

                                      -8-
<PAGE>

no forbearance by Pledgee to seek a remedy for any Default by Pledgor shall be
construed as a waiver of any right or remedy with respect to such Default.

          13.8  Severability.  The invalidity or unenforceability of any
                ------------
particular provision of this Agreement shall not affect the other provisions,
and this Agreement shall be construed in all respects as if any invalid or
unenforceable provision were omitted.

          13.9  Further Action.  The Pledgor agrees to perform any further acts
                --------------
and to execute and deliver any other documents or instruments which may be
necessary in the sole discretion of Pledgee to effect the provisions of this
Agreement.

          13.10 Headings.  The Section and other headings contained in this
                --------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

                                      -9-
<PAGE>

          13.11 Joint and Several.  If this Agreement is signed by more than
                -----------------
one party as Pledgor, each and all of the agreements and obligations contained
herein shall be deemed to be the joint and several agreements and obligations of
each such party executing this Agreement as Pledgor.

                       [SIGNATURES ARE ON THE NEXT PAGE]

                                      -10-
<PAGE>

     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the year and date first above written.

PLEDGEE:                                    PLEDGOR:

Unified Western Grocers, Inc.,             Khaledi Family Trust dated May 17,
a California Corporation                   1995

By:_________________________________       By: ________________________________
   Richard J. Martin                           Darioush Khaledi, Trustee
   Executive Vice President,
   Finance and Administration, and
   Chief Financial Officer

                                           ____________________________________
                                               Parviz Vazin

By:_________________________________
   Robert M. Ling, Jr.
   Executive Vice President,
   General Counsel and Secretary

                                           ____________________________________
                                               Vida Vazin

GCC:

Grocers Capital Company,
a California corporation

By:_________________________________
   David A. Woodward,
   Vice President & CFO

By:_________________________________
   Robert M. Ling, Jr.,
   Secretary

                                      -11-
<PAGE>

                                   EXHIBIT A
                                SECURITIES LIST

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Certificate      Date            Title        Number        Registered
                 ----            -----
    No.                                      of Shares        Owner
    ---                                      ---------        -----
--------------------------------------------------------------------------------
<S>          <C>             <C>             <C>          <C>
     10      March 26, 1999  Common Stock     3,725.9     Paul Vazin
--------------------------------------------------------------------------------
     11      March 26, 1999  Common Stock     5,157.7     Darioush Khaledi,
                                                          Trustee of the Khaledi
                                                          Family Trust dated
                                                          May 17, 1995
--------------------------------------------------------------------------------
                             Total            8,883.6
--------------------------------------------------------------------------------
</TABLE>

                                      -12-<PAGE>

                               PLEDGE AGREEMENT
                               ----------------

     This Pledge Agreement (the "Agreement") is made on July 5, 2000, by and
between Salomeh Khaledi and Khashayar Khaledi (jointly and severally, the
"Pledgor"), whose address is c/o K.V. Mart Co., 1245 E. Watson Center Road,
Carson, California 90745-4207, Attention: President, Unified Western Grocers,
Inc., a California corporation ("Unified" or "Pledgee"), whose address is 5200
Sheila Street, Commerce, California 90040, Attention: Secretary, and Grocers
Capital Company as bailee of the Pledged Collateral ("GCC" or "Bailee"), whose
address is 5200 Sheila Street, Commerce, California 90040, Attention: Secretary.

     1.   Recital.  This Agreement is made with respect to the following facts
          -------
and circumstances:

               (a) Unified is entering into a Term Loan Agreement dated the date
     hereof (the "Loan Agreement") with  1999 Lawndale Associates LLC (the
     "Company"), and Pledgor has agreed to pledge all shares of K.V. Mart Co.
     owned by Pledgor as collateral for the Company's obligations pursuant to
     the Loan Agreement and a related $3,000,000 Promissory Note (the "Note").

               (b) Unified would not enter into the Loan Agreement unless the
     Pledgor agreed to enter into this Agreement, and the Pledgor, as a material
     inducement and consideration to Unified to enter into the Loan Agreement,
     is willing to execute and deliver this Agreement and agree to and be bound
     by its terms.

               (c) GCC, a wholly-owned subsidiary of Unified, has agreed to act
     as bailee of the Pledged Collateral on behalf of Unified pursuant to UCC
     (S) 9305, and currently holds the Pledged Collateral as pledgee pursuant to
     a Pledge Agreement dated March 26, 1999, between Pledgor, certain other
     pledgors and GCC (the "Prior Pledge").

     2.   Definitions.  In addition to capitalized terms elsewhere defined in
          -----------
this Agreement, the following terms shall have the following meanings:

          2.1  "Obligations" means all of the indebtedness, obligations and
                -----------
liabilities of the Company to Unified, whether direct or indirect, joint or
several, absolute or contingent, liquidated or disputed, due or to become due,
now existing or hereafter arising under the Loan Agreement and/or The Note.

          2.2  "Pledged Collateral" means Pledgor's Securities, together with
                ------------------
all proceeds thereof, including any securities and monies received and at the
time held by Pledgee or Bailee hereunder.

                                      -1-
<PAGE>

          2.3  "Securities" means all stock and other securities of  K.V. Mart
                ----------
Co., a California corporation, now owned or hereafter acquired by Pledgor,
including, without limitation, the Securities listed on Exhibit A attached
hereto.

     3.   Pledge of Securities.
          --------------------

          3.1  Pledge.  To secure the Obligations, Pledgor hereby (a) grants to
               ------
Pledgee a first priority security interest in the Pledged Collateral; (b)
pledges, and acknowledges the prior deposit of the Pledged Collateral for
security with GCC, as bailee for purposes of perfection, the Securities owned by
Pledgor on the date hereof; and (c) pledges, assigns, transfers, hypothecates,
mortgages and sets over to Pledgee all of Pledgor's right, title and interest in
and to the Pledged Collateral, (and in and to the certificates or instruments
evidencing any Pledged Collateral), to be held by Pledgee or Bailee upon the
terms and conditions set forth in this Agreement.

          3.2  Subsequently Acquired Securities.  If Pledgor shall acquire (by
               --------------------------------
purchase, stock dividend or otherwise) any additional Securities, at any time or
from time to time after the date hereof, Pledgor will forthwith pledge and
deposit such Securities as security with Pledgee and deliver to Pledgee or
Bailee certificates therefor accompanied by stock powers duly executed in blank
by Pledgor or such other instruments of transfer as are acceptable to Pledgee,
and will concurrently deliver to Pledgee a certificate executed by Pledgor
describing such Securities and certifying that the same have been duly pledged
with Pledgee or Bailee hereunder.

          3.3  Suretyship Relationship.  This Agreement constitutes a security
               -----------------------
agreement and is given in part as security for obligations of persons
(hereinafter collectively called "Obligors") other than the undersigned.  Each
of the undersigned hereby expressly waives diligence, demand, presentment,
protest, and notice of every kind and nature whatsoever, and consents that the
Pledgee and any Obligor may deal with each other in connection with said
obligations, or otherwise, in any manner whatsoever, including without
limitation, the following:  (a) renew, extend, modify, release or discharge and
Obligations of any person at any time directly or contingently liable for the
payment of any of said Obligations; (b) accept partial payments of said
Obligations; (c) accept new or additional documents, instruments or agreements
relating to or in substitution of said Obligations; (d) settle, release (by
operation of law or otherwise), compound, compromise, collect or liquidate any
of said Obligations and the security therefore in any manner; (e) consent to the
transfer of security, take and hold additional security or guaranties for said
Obligations and amend, exchange, release or waive any security or guaranty; or
(f) bid and purchase at any sale of paper or security and apply any security and
direct the order and manner of sale all without in any way altering the
liability of the undersigned hereunder, or affecting the security of this
Security Agreement.  If any default should be made in the payment of any
Obligation secured hereby, or in the terms and conditions of any security held
therefore, Pledgee is hereby expressly given the right, at its option, to
proceed in the

                                      -2-
<PAGE>

enforcement of this Agreement independently of any other remedy or security said
Pledgee may at any time hold in connection with the Obligations secured hereby,
and it shall not be necessary for the Pledgee to proceed upon or against, and/or
exhaust any other security or remedy before proceeding to enforce this
Agreement.

     4.   Representations and Warranties.  Pledgor represents and warrants that
          ------------------------------
on the date hereof:

          4.1  Securities.  The Securities consist of the number and type of
               ----------
Securities listed on Exhibit A attached hereto, Pledgor is the holder of record
and beneficial owner of such Securities, and such Securities are validly issued
and fully paid and nonassessable.

          4.2  Title.  Pledgor is, or will be, as the case may be, the legal,
               -----
record and beneficial owner of, and has good and marketable title to, the
Securities, pledged by it hereunder, subject to no security interest, lien,
adverse claim or other encumbrance (except the security interest created by this
Agreement).

          4.3  Authority.  Pledgor has full power, authority and legal right to
               ---------
pledge all Pledged Collateral pursuant to this Agreement and this Agreement
creates a valid, perfected security interest enforceable against the Pledged
Collateral, in which Pledgor now has rights, and will create a valid, perfected
security interest enforceable against the Pledged Collateral in which Pledgor
later acquires rights when Pledgor acquires those rights, subject only to the
rights of GCC pursuant to the Prior Pledge.

          4.4  Consents.  No consent, filing, recording or registration is
               --------
required in connection with Pledgor's execution and delivery of this Agreement
and pledge of the Pledged Collateral, nor is any such required to perfect the
security interest in the Pledged Collateral granted under this Agreement.

          4.5  No Violations.  Neither the execution and delivery of this
               -------------
Agreement, nor the taking of any action in compliance with it, will violate or
breach any law, regulation, rule, order or judicial action binding on Pledgor or
any agreement or instrument to which Pledgor is a party, or result in the
creation of any lien, security interest, adverse claim or other encumbrance,
against the Pledged Collateral except that created by this Agreement and the
Prior Pledge.

          4.6  No Defaults.  No Default (as defined in Section 9 of this
               -----------
Agreement) has occurred or is continuing.

          4.7  Representations and Warranties.  Each of the representations and
               ------------------------------
warranties of Pledgors contained in the Purchase Agreement are true and correct.

                                      -3-
<PAGE>

     5.   Appointment of Agents; Endorsements.  Pledgee shall have the right to
          -----------------------------------
appoint one or more agents for the purpose of retaining physical possession of
the Securities, which may be held (in Pledgee's discretion) in the name of
Pledgor, endorsed or assigned in blank or in favor of Pledgee or any nominee or
nominees of Pledgee or an agent appointed by Pledgee, or in the name of Unified
as pledgee.

     6.   Voting Rights, Dividends and Distributions.
          ------------------------------------------

          6.1  Voting and Dividends.  Unless and until a Default (as defined in
               --------------------
Section 9 of this Agreement) shall have occurred and be continuing: (a) Pledgor
shall be entitled to vote any and all Securities and to give consents, waivers
or ratifications in respect thereof, provided that no vote shall be cast nor any
consent, waiver or ratification given or any action taken which would violate or
be inconsistent with any of the terms of this Agreement or which would cause a
violation of any of the covenants and agreements of the Company or the Pledgor
contained in the Loan Agreement or this Agreement; and, (b) all cash dividends
payable in respect of the Pledged Collateral shall be paid to Pledgor, provided
that all cash dividends payable in respect of the Pledged Collateral which are
determined by Pledgee, in its discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital shall be
paid to Pledgee and retained by it as part of the Pledged Collateral.

          6.2  Distributions.  Whether or not a Default (as defined in Section 9
               -------------
of this Agreement) shall have occurred or be continuing, Pledgee shall be
entitled to receive directly, and to retain as part of the Pledged Collateral,
(a) all other or additional stock or securities or property (other than cash)
paid or distributed by way of dividend in respect of any Securities; (b) all
other or additional stock or other securities or property (including cash) paid
or distributed in respect of any Securities by way of stock split, spinoff,
split-up, reclassification, combination of shares or similar rearrangement; and,
(c) all other or additional stock or other securities or property (including
cash) which may be paid in respect of the Pledged Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of assets, liquidation or
similar corporate reorganization.

     7.   Covenants.  Pledgor covenants and agrees that: (a) Pledgor will defend
          ---------
Pledgee's right, title and security interest in and to the Pledged Collateral
against the claims and demands of all persons and entities; (b) Pledgor will pay
all expenses, including attorneys' fees, incurred by Pledgee in the perfection,
preservation, realization, enforcement and exercise of its rights under this
Agreement; (c) Pledgor will indemnify, defend and hold Pledgee harmless from and
against any and all claims, losses, liabilities, actions, costs and expenses
(including reasonable attorneys' fees and costs) suffered or incurred by Pledgee
arising out of or resulting from its interest in the Pledged Collateral; (d)
Pledgor will not sell or otherwise transfer or dispose of, grant any option or
right with respect to, or create, incur, assume or suffer to exist any lien,
security interest, claim or other encumbrance in or against the Pledged
Collateral or

                                      -4-
<PAGE>

any portion of it (except the security interest created by this Agreement); (e)
Pledgor will give Pledgee notice of any litigation or adverse claim concerning
or involving the Pledged Collateral or any part of it; (f) Pledgor will notify
Pledgee promptly in writing of any Default (as defined in Section 9 of this
Agreement) or any event or occurrence that might have an adverse effect on the
Pledged Collateral or any part of it; (g) Pledgor will execute and deliver to
Pledgee all financing statements and other documents and instruments that
Pledgee requests, in order to maintain a valid, first priority perfected
security interest in the Pledged Collateral and every part of it; and, (h)
Pledgor will promptly furnish to Pledgee such reports and other information
relating to the Pledged Collateral and any part of it as Pledgee may from time
to time request.

     8.   Pledgee's Duties.  Pledgee and GCC, as its bailee, each has no duty or
          ----------------
liability for the Pledged Collateral except to exercise reasonable care while it
is in Pledgee's or GCC's possession and except as otherwise expressly set forth
in this Agreement. It is understood and agreed that the obligations of Pledgee
and GCC as holder of the Pledged Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. Without limiting the foregoing:

          8.1  Preservation of Rights.  Pledgee and GCC each shall not be
               ----------------------
required to take any steps necessary to preserve any rights in any Pledged
Collateral against prior parties or to protect, perfect, preserve or maintain
any security interest given to secure any Pledged Collateral.

          8.2  Reasonable Care.  Pledgee and GCC each shall be deemed to have
               ---------------
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if it deals with the Pledged Collateral in such
manner as Pledgee or GCC deals with similar property for its own account.

          8.3  Accountability.  Pledgee and GCC each shall be accountable only
               --------------
for any amounts it actually receives, and it shall not be liable to Pledgor for
any act or failure to act.

     9.   Default.  The occurrence of any one or more of the following shall
          -------
constitute a Default under this Agreement: (a) a breach or default by the
Company under the Loan Agreement or the Note; (b) Pledgor fails or refuses to
perform or discharge any covenant or obligation under this Agreement, or any
present or further rider, amendment or supplement to this Agreement, or any
other agreement between Pledgor and Pledgee or GCC evidencing the Obligations or
securing them; (c) any representation or warranty made by or on behalf of
Pledgor in or with respect to this Agreement or made by or on behalf of Pledgor
in or with respect to the Purchase Agreement is false; (d) there is a seizure or
attachment of, or a levy on, the Pledged Collateral or any part of it; (e)
Pledgor does or fails to do anything that allows

                                      -5-
<PAGE>

obligations to become due before their stated maturity, or becomes insolvent or
unable to meet its debts as they mature; or (f) Pledgor files, or acquiesces in
or consents to the filing of, any proceedings under the Federal Bankruptcy Code
or any other law providing for the relief of debtors, or is the subject of any
involuntary proceedings under the Federal Bankruptcy Code or any other law
providing for the relief of debtors and such involuntary proceedings are not
dismissed within thirty (30) days of their commencement.

     10.  Remedies.  At any time when a Default has occurred and is continuing:
          --------

          10.1 Remedies.  In addition to any other rights or remedies which
               --------
Pledgee may have under this Agreement or at law or equity, Pledgee may:

               (a) Exercise any and all rights and remedies which Pledgee may
     have under or with respect to the Loan Agreement, the Note and this
     Agreement, all to the extent and in such order as Pledgee may determine in
     its sole discretion.

               (b) Exercise any and all rights and remedies available to a
     secured party after default, including, without limitation, the rights and
     remedies of secured parties under the California Uniform Commercial Code.

               (c) Perform any of the Pledgor's obligations under this Agreement
     for the Pledgor's account, and any money expended or obligations incurred
     in doing so, including reasonable attorneys' fees and costs and interest at
     the highest rate permitted by law, will be charged to the Pledgor and
     secured by the security interest granted under this Agreement.

               (d) Receive all amounts payable in respect to the Pledged
     Collateral otherwise payable to Pledgor; transfer all or any part of the
     Pledged Collateral into Pledgee's or GCC's name or the name of its nominee
     or nominees; and, vote all or any part of the Pledged Collateral (whether
     or not transferred into the name of Pledgee or GCC) and give all consents,
     waivers and ratifications in respect of all or any part of the Pledged
     Collateral and exercise all rights, options and privileges and otherwise
     act with respect to the Pledged Collateral as thought Pledgee were the
     owner thereof (Pledgor hereby irrevocably constituting Pledgee the proxy
     and attorney-in-fact of Pledgor, with full power of substitution to do so).

               (e) At any time or from time to time to sell, assign and deliver,
     or grant options to purchase, all or any part of the Pledged Collateral, or
     any interest therein, at public or private sale, without demand of
     performance, advertisement or notice of intention to sell, or of the time
     or place of sale, or adjournment thereof, or redeem or otherwise (all of
     which are hereby waived by

                                      -6-
<PAGE>

     Pledgor), for cash, on credit or for other property, for immediate for
     future delivery without any assumption of credit risk, and for such price
     or prices and on such terms as Pledgee in its absolute discretion may
     determine, provided that notice of the time and place of any such sale
     shall be given to Pledgor in the manner provided in this Section 10.2 of
     this Agreement. Pledgor hereby waives and releases to the fullest extent
     permitted by law any right or equity of redemption with respect to the
     Pledged Collateral, whether before or after sale under this Agreement, and
     all rights, if any, of marshaling the Pledged Collateral and any other
     security for any Obligations or otherwise. At any such sale, unless
     prohibited by applicable law, Pledgee may bid for and purchase all or any
     part of the Pledged Collateral so sold free from any such right or equity
     of redemption. Pledgee and GCC shall not be liable for failure to collect
     or realize upon any or all of the Pledged Collateral or for any delay in so
     doing nor shall Pledgee and GCC be under any obligation to take any action
     whatsoever with regard thereto.

          10.2 Notice of Sale.  Pledgee's notice of the time and place of public
               --------------
sale of the Pledged Collateral, or the time on or after which a private sale or
other disposition of the Pledged Collateral will be made, is reasonable if given
to Pledgor in the manner for giving notices under this Agreement at least five
(5) days before the public or private sale.

          10.3 Pledgor's Duties.  Pledgor must assemble all records relating to
               ----------------
the Pledged Collateral and make them available to Pledgee as Pledgee directs,
and execute all documents and instruments on Pledgee's request that Pledgee
considers necessary or advisable to exercise its rights under this Agreement.

     11.  Registration.  If at any time when Pledgee shall determine to exercise
          ------------
its right to sell all or any Securities, such Securities or the part thereof to
be sold shall not, for any reason whatsoever, be effectively registered under
the Securities Act of 1933, as then in effect, Pledgee may, in its sole
discretion, sell any such Securities by private sale in such manner and under
such circumstances as Pledgee reasonably may deem necessary or advisable in
order that such sale may legally be effected without such registration, provided
that notice of the time and place of any such sale shall be given to Pledgor in
the manner provided in Section 10.2 of this Agreement and that such sale shall
be conducted in a commercially reasonable manner.  Without limiting the
generality of the foregoing, in any such event, Pledgee, in its sole discretion,
may proceed to make such private sale notwithstanding that a registration
statement for the purpose of registering such Securities or part thereof shall
have been filed under such Securities Act, may approach and negotiate with a
single possible purchaser to effect such sale, and may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Securities or any part thereof. In the event of any

                                      -7-
<PAGE>

such sale, Pledgee shall incur no responsibility or liability for selling all or
any Securities at a price which Pledgee may in good faith deem reasonable under
the circumstances, notwithstanding the possibility that a substantially higher
price might be realized if such Securities were registered as aforesaid.

     12.  Termination.  When all Obligations have been irrevocably paid,
          -----------
performed and discharged in full, this Agreement shall terminate, and Pledgee,
at the request and expense of Pledgor, promptly will execute and deliver to
Pledgor a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and, subject to satisfaction of all obligations
of Pledgor pursuant to the Prior Pledge, will assign, transfer and deliver to
Pledgor (without recourse and without any representation or warranty) such of
the Pledged Collateral as may be in the possession of Pledgee or GCC as its
bailee and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement.

     13.  Other Provisions.
          ----------------

          13.1 Expenses.  The Pledgor agrees to pay all attorneys' fees and all
               --------
other costs and expenses which may be incurred by Pledgee in the enforcement or
collection of this Agreement whether or not suit is filed.

          13.2 Interest.  All amounts required to be paid to Pledgee by the
               --------
Pledgor pursuant to the provisions of this Agreement shall bear interest from
the date upon which such amounts are due to the date of payment thereof at the
highest rate permitted by law.  All payments of such amounts by the Pledgor
shall include any such accrued interest.

          13.3 Governing Law.  The validity, construction and performance of
               -------------
this Agreement shall be governed by the laws, without regard to the laws as to
choice or conflict of laws, of the State of California.

          13.4 Entire Agreement.  This Agreement embodies the entire agreement
               ----------------
and understanding between Pledgee and the Pledgor pertaining to the subject
matter of this Agreement, and supersedes all prior agreements, understandings,
negotiations, representations and discussions, whether verbal or written, of
such parties, pertaining to that subject matter.

          13.5 Assignment; Binding Effect.  Neither this Agreement nor any
               --------------------------
rights or obligations under this Agreement may be assigned by the Pledgor
without the prior written consent of Pledgee. Subject to the foregoing, the
provisions of this Agreement shall bind and inure to the benefit of Pledgee and
the Pledgor and their respective heirs, executors, personal representatives,
successors and assigns.

                                      -8-
<PAGE>

          13.6 Notices.  Whenever Pledgee or the Pledgor desire or are required
               -------
to give any notice, demand or request with respect to this Agreement, each such
communication shall be in writing and shall be given by personal service or
mailed by Certified Mail, postage prepaid, return receipt requested, addressed
as set forth in the first paragraph of this Agreement.  Such communications sent
shall be effectively given when they are received by the addressee thereof, but
if sent by Certified Mail, they shall be effectively given three (3) days after
being deposited in the United States Mail. Pledgee, GCC and the Pledgor may
change their respective address for such communications by giving notice to the
other in conformity with this Section.

          13.7 Amendment and Waiver.  This Agreement may not be amended,
               --------------------
modified or supplemented except by a writing duly executed by the Pledgor and a
duly authorized officer of Pledgee.  No provision of this Agreement or right of
Pledgee under this Agreement can be waived except by a writing duly executed by
a duly authorized officer of Pledgee.  No waiver by Pledgee of a Default under
this Agreement shall be construed as a waiver of any subsequent or different
Default, and no forbearance by Pledgee to seek a remedy for any Default by
Pledgor shall be construed as a waiver of any right or remedy with respect to
such Default.

          13.8 Severability.  The invalidity or unenforceability of any
               ------------
particular provision of this Agreement shall not affect the other provisions,
and this Agreement shall be construed in all respects as if any invalid or
unenforceable provision were omitted.

          13.9 Further Action.  The Pledgor agrees to perform any further acts
               --------------
and to execute and deliver any other documents or instruments which may be
necessary in the sole discretion of Pledgee to effect the provisions of this
Agreement.

          13.10  Headings.  The Section and other headings contained in this
                 --------
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

          13.11  Joint and Several.  If this Agreement is signed by more than
                 -----------------
one party as Pledgor, each and all of the agreements and obligations contained
herein shall be deemed to be the joint and several agreements and obligations of
each such party executing this Agreement as Pledgor.

                       [SIGNATURES ARE ON THE NEXT PAGE]

                                      -9-
<PAGE>

     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the year and date first above written.

PLEDGEE:                                    PLEDGOR:

                                                    a California Corporation
                                            _______________________________
                                                   Salomeh Khaledi
By: _____________________________
    Richard J. Martin
    Executive Vice President,
    Finance and Administration, and         _______________________________
    Chief Financial Officer                        Khashayar Khaledi

By: _____________________________
    Robert M. Ling, Jr.
    Executive Vice President,
    General Counsel and Secretary

GCC:

Grocers Capital Company,
a California corporation

By:______________________________
   David A. Woodward,
   Vice President & CFO

By:______________________________
   Robert M. Ling, Jr.,
   Secretary

                                      -10-
<PAGE>

                                   EXHIBIT A
                                SECURITIES LIST

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Certificate      Date             Title         Number           Registered
                 ----             -----
    No.                                        of Shares           Owner
    ---                                        ---------           -----
--------------------------------------------------------------------------------
<S>           <C>             <C>              <C>             <C>

5             March 11, 1999  Common Stock       47.2          Salomeh Khaledi

--------------------------------------------------------------------------------
6             March 11, 1999  Common Stock       47.2          Khashayar Khaledi
--------------------------------------------------------------------------------
                              Total              94.4
--------------------------------------------------------------------------------
</TABLE>

                                      -11-

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