Exhibit 99.4
EXECUTION COPY
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made this
31st day of December, 1997 (the "Closing Date") by and between
Xxxxxx Stores Liquidating Trust ("Pledgor") and Canadian Imperial
Bank of Commerce ("Pledgee").
Recitals
Pledgee and Pledgor propose to enter into one or more
transactions pursuant to the ISDA Master Agreement (as modified
by the Schedule thereto) dated as of November 19, 1997 between
Pledgee and Pledgor (the "Master Agreement"). In addition,
Pledgor may exercise its right to borrow monies from Pledgee and
Pledgee has committed to lend such monies to Pledgor on or after
the Closing Date pursuant to the terms of a Secured Term Note
executed by Pledgor (the "Note") on the Closing Date. To secure
payment and performance of its obligations under the Note and the
Master Agreement, Pledgor has agreed to pledge to Pledgee the
shares of stock listed on Exhibit A hereto (the "Shares") and may
from time to time, in accordance with the terms hereof, pledge
additional stock (the "Additional Shares"), which, upon such
pledge, shall also constitute "Shares." Capitalized terms used
and not otherwise defined herein shall have the meaning specified
in the Master Agreement.
NOW, THEREFORE, Pledgor and Pledgee agree as follows:
1. Pledge of Securities.
(a) Pledgor hereby pledges and assigns to Pledgee, and
grants to Pledgee a security interest in, the Shares and any
Additional Shares delivered hereunder, together with all proceeds
and substitutions thereof, all cash, dividends, stock and other
moneys and property paid thereon, all rights to subscribe for
securities declared or granted in connection therewith, and all
other cash and noncash proceeds of the foregoing (all hereinafter
called the "Collateral"), as security for the prompt payment and
performance of all of Pledgor's obligations under the Note and
the Master Agreement, including any obligations arising out of
any Transactions entered into between Pledgor and Pledgee after
the date hereof under the Master Agreement (all such obligations
of Pledgor, collectively, the "Obligations"). If any Additional
Shares are at any time pledged to Pledgee, Exhibit A shall be
amended to reflect the addition of such Additional Shares.
(b) The term "Collateral" shall also include any
securities, instruments or distributions of any kind issuable,
issued or received by Pledgor upon conversion of, in respect of,
or in exchange for any other Collateral, including, but not
limited to, those arising from a stock dividend, stock split,
reclassification, reorganization, merger, consolidation, sale of
assets or other exchange of securities or any dividends or other
distributions of any kind upon or with respect to the Collateral.
(c) The certificate or certificates for any securities
included in the Collateral, accompanied by an instrument of
assignment duly executed in blank by Pledgor, have been, or will
be immediately upon the subsequent receipt thereof by Pledgor,
delivered by Pledgor to United States Trust Company of New York
(the "Custodian") for the benefit of Pledgee, pursuant to a Tri-
Party Custody Agreement dated as of the Closing Date (the
"Custodial Agreement"), by and among the Custodian, Pledgee and
Pledgor. Pledgor shall cause the books of each corporation whose
stock is part of the Collateral to reflect the pledge of the
Shares. Pledgee may, at any time, effect the transfer of any
securities included in the Collateral into the name of Pledgee
and cause new certificates representing such securities to be
issued in the name of Pledgee, subject to Pledgee's obligation
hereunder to return the Collateral to Pledgor.
2. Power of Attorney. Pledgor hereby constitutes and
irrevocably appoints Pledgee, with full power of substitution and
revocation by Pledgee, as Pledgor's true and lawful
attorney-in-fact, to the full extent permitted by law, for the
purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that Pledgee deems
necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation,
(a) to affix to certificates and documents
representing the Collateral the endorsements or other instruments
of transfer or assignment delivered with respect thereto and to
transfer or cause the transfer of the Collateral, or any part
thereof, on the books of the issuer thereof;
(b) to give such orders and instructions to the issuer
of any Shares or its transfer agent as the Pledgee in its sole
discretion shall determine, with respect to the transfer on the
books of the issuer of the Shares to be transferred to the
Custodian in order to effect such transfer (including giving the
names in which new certificates for such Shares are to be issued
and the denominations thereof) and the delivery to or for the
account of the Custodian of certificates for such Shares; and
(c) to endorse (in blank or otherwise) on behalf of
Pledgor the certificate(s) representing any Shares, and one or
more stock powers attached to such certificate(s).
The power of attorney granted pursuant to this Agreement and all
authority hereby conferred are granted and conferred solely to
protect Pledgee's interest in the Collateral and shall not impose
any duty upon Pledgee to exercise any power. This power of
attorney shall be irrevocable as one coupled with an interest.
3. Representations and Warranties. Pledgor represents and
warrants to Pledgee (which representations shall be deemed to be
repeated as of each date on which it delivers any Additional
Shares) that:
(a) Pledgor is the sole legal and beneficial owner of
the Collateral and has the right to pledge and transfer such
Collateral free and clear of any security interests, liens or
encumbrances.
(b) Pledgor has full power and authority to create a
first lien on the Collateral in favor of Pledgee and no
disability or contractual obligation exists which would prohibit
Pledgor from pledging the Collateral pursuant to this Agreement.
(c) The Shares have been duly authorized and validly
issued, are fully paid and non-assessable, and have been
registered under the Securities Act of 1933, as amended, and are
freely tradeable on the public markets.
(d) The Collateral is not the subject of any present
or threatened suit, action, arbitration, administrative or other
proceeding, and Pledgor knows of no reasonable grounds for the
institution of any such proceedings.
All the above representations and warranties shall survive the
making of this Agreement.
4. Covenants. Pledgor covenants to Pledgee that:
(a) Pledgor will not assign, create or permit to exist
any other claim to, lien or encumbrance upon, or security
interest in any of the Collateral other than the security
interest granted to Pledgee herein.
(b) If any restrictive legends appear on the
certificates evidencing the Shares, Pledgor will exercise its
right to have such legends removed.
(c) Pledgor will execute and deliver such documents,
and take or cause to be taken such actions, as Pledgee may
reasonably request to create, preserve, perfect, enforce or
validate the Pledgee's security interest in and rights with
respect to the Collateral.
(d) Pledgor will promptly give notice to Pledgee of,
and defend against, any suit, action, proceeding or lien that
involves any Collateral or that could adversely affect the
security interest in the Collateral granted by Pledgor hereunder.
5. Care and Maintenance of Collateral. The Collateral
shall be maintained by the Custodian pursuant to the Custodial
Agreement.
6. Credit Support Document. This Agreement shall
constitute a Credit Support Document for all purposes of the
Master Agreement, including, without limitation, for purposes of
Sections 3 and 5 thereof.
7. Pledgor Defaults. Each of the following shall
constitute an event of default hereunder (each a "Pledgor
Default"):
(a) An Acceleration Event shall occur under the Note;
(b) An Event of Default or a Termination Event shall
occur under the Master Agreement;
(c) Pledgor shall fail to pay any amounts due Pledgee
under the Master Agreement following an Event of Default or a
Termination Event thereunder; or
(d) Pledgor shall breach or fail to observe or perform
any provision of this Agreement.
8. Remedies Upon Default.
(a) Upon the occurrence and during the continuance of
a Pledgor Default, Pledgee shall have the right to exercise all
such rights as a secured party under the Uniform Commercial Code
of the State of New York as it, in its sole judgment, shall deem
necessary or appropriate, including the right to cause the
Custodian to sell, pursuant to the Custodial Agreement, all or
any part of the Collateral at one or more public or private sales
upon two days' written notice to Pledgor, and any such sale or
sales may be made for cash, upon credit, or for future delivery,
and in connection therewith, Pledgee may grant options, provided
that any such terms or options shall, in the best judgment of
Pledgee, be extended only in order to obtain a better price.
Further Pledgee may Set-Off any Obligations against any
Collateral. Pledgee hereby waives, to the extent permitted by
applicable law, any equity or right of redemption, in the
Collateral.
(b) Pledgor recognizes that Pledgee may be unable to
effect a public sale of all or a part of the Collateral by reason
of certain prohibitions contained in the Securities Act of 1933,
as amended ("Act"), so that Pledgee may be compelled to resort to
one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire the
Collateral for their own account, for investment and without a
view to the distribution or resale thereof. Pledgor understands
that private sales so made any be at prices and on other terms
less favorable to the seller than if the Collateral were sold at
public sales, and agrees that Pledgee has no obligation to delay
the sale of any of the Collateral for the period of time
necessary (even if Pledgee would agree), to register such
securities for sale under the Act. Pledgor agrees that private
sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner.
(c) Pledgee may elect to obtain the advice of any
independent investment banking firm with respect to the method
and manner of sale or other disposition of any of the Collateral,
the best price reasonably obtainable therefor, the consideration
of cash and/or credit terms, or any other details concerning such
sale or disposition.
(d) All of Pledgee's rights and remedies under this
Agreement and under applicable law, including but not limited to
the foregoing, shall be cumulative and not exclusive and shall be
enforceable alternatively, successively or concurrently as
Pledgee may deem expedient.
(e) If any consent, approval or authorization of, or
filing with, any governmental authority or any other person or
entity should be necessary to effectuate any sale or other
disposition of the Collateral, or any partial disposition of the
Collateral, Pledgor agrees to execute all such applications and
other instruments as may be required in connection with securing
any such consent, approval or authorization, and will otherwise
use its best efforts to secure the same. Pledgor agrees to do or
cause to be done all such acts and things as may be necessary to
make the sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law, including, without
limitation, the Securities Act of 1933, as amended.
(f) After the sale of the Collateral following a
Pledgor Default, Pledgee may deduct all reasonable legal and
other expenses and attorney's fees for preserving, collecting,
selling and delivering the Collateral and for enforcing its
rights with respect to the Obligations, and shall apply the
residue of the proceeds to the Obligations in such manner as
Pledgee in its reasonable discretion shall determine, and shall
pay the balance, if any to Pledgor.
(g) Notwithstanding anything herein to the contrary,
the Pledgee may exercise its remedies hereunder only upon the
termination of the Master Agreement and the Note.
9. Release of Collateral. The pledge of a grant of a
security interest in the Collateral pursuant to this Agreement
shall be of no further force or effect and the Collateral shall
be returned to Pledgor within five business days of payment and
performance in full of the Obligations to Pledgee.
10. Miscellaneous.
(a) All notices, consents, approvals and other
communications required or permitted hereunder shall be addressed
to the receiving party at the address set forth below its
signature. All such communications shall be delivered personally
or by facsimile or by courier or sent by first class mail,
postage prepaid. Communications by mail shall be deemed
delivered upon receipt.
(b) This Agreement shall be construed in accordance
with, and the rights of the parties shall be governed by, the law
of the State of New York.
(c) This Agreement may not be amended or modified
except by a written instrument signed by Pledgee and Pledgor.
(d) This Agreement and the agreements and instruments
executed in connection herewith constitute the entire agreement
between Pledgee and Pledgor with respect to the subject matter
hereof and supersede all prior agreements, understandings, offers
and negotiations, oral or written.
(e) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.
Pledgor:
Xxxxxx Stores Liquidating Trust
By: /s/ Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title: Manager and Chief
Executive Officer
Pledgee:
Canadian Imperial Bank of Commerce
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President
EXHIBIT A
TO STOCK PLEDGE AGREEMENT
Corporation Shares Class of Stock Certif. No(s) Number of Shares
Toys "R" Us, Inc. ("TOY") common 2,000,000
