PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of
July 2, 1998, made by SNEAKER GUARANTEE LLC, a Delaware limited liability
company ("PLEDGOR"), to BANQUE NATIONALE DE PARIS ("BNP"), as collateral
agent (together with any successor agent appointed pursuant to Section
13(j), the "AGENT") for itself and for Xxxxxxx Xxxxx Senior Floating Rate
Fund, Inc., Xxxxxxx Xxxxx Prime Rate Portfolio and Xxxxxxx Xxxxx Debt
Strategies Portfolio (together with BNP, the "SECURED LENDERS").
PRELIMINARY STATEMENTS.
(1) Sneaker Stadium, Inc. (the "BORROWER") has entered into a
Credit Agreement dated as of January 17, 1997 (as amended or modified, the
"CREDIT AGREEMENT") with BNP, for itself and as agent for the Secured
Lenders. Each capitalized term issued but not defined shall have the
meaning given it in the Credit Agreement.
(2) As of the date hereof and immediately before giving effect
to this Agreement, there is $30,613,326.68 outstanding under the Credit
Agreement and the other Loan Documents, including $30 million in
outstanding principal, $507,743.06 in accrued and unpaid interest, and
$105,583.62 in fees and expenses including without limitation fees and
disbursements of counsel (collectively, the "EXISTING LENDER
INDEBTEDNESS").
(3) The Borrower and Just For Feet, Inc., a Delaware
corporation ("JFF"), have entered into an Agreement and Plan of Merger,
dated as of July 2, 1998 (the "MERGER AGREEMENT"), pursuant to which a
wholly-owned subsidiary of JFF will merge with and into the Borrower, with
the Borrower being the surviving entity.
(4) JFF and BNP, for itself and as agent for the Secured
Lenders, have entered into the Contingent Payment Agreement, dated as of
July 2, 1998 (the "CONTINGENT PAYMENT AGREEMENT"), pursuant to which
contingent payments may be made as set forth in the Debt Restructuring
Agreement (as defined below) to the Agent on behalf of the Secured Lenders
and Xxxxxx X. Xxx Company as Representative for the Subordinated Lenders
listed on Schedule I to the Contingent Payment Agreement.
(5) In connection with the transactions contemplated by the
Merger Agreement, the Borrower, the Pledgor, the Agent and the Secured
Lenders have executed the Debt Restructuring Agreement of even date
herewith (the "DEBT RESTRUCTURING AGREEMENT"), pursuant to which the
Secured Lenders have agreed to accept in full satisfaction and discharge of
the Existing Lender Indebtedness:
(a) cash in an amount on the closing of the Merger Agreement equal
to accrued and unpaid interest, fees, and expenses (including
without limitation the reasonable fees and disbursements of
counsel to the Agent and each Secured Lender) in an
amount equal to $613,326.68 (the "BRINGDOWN AMOUNT"),
(b) cash applied to the repayment of the outstanding principal
balance of the Existing Lender Indebtedness in an amount equal
to $6,269,589.53 (the "PRINCIPAL PAYMENT")
(c) payments, if any, under the Contingent Payment Agreement as set
forth therein and in the Debt Restructuring Agreement,
(d) a non-recourse guarantee from Pledgor (the "GUARANTY") of payment
to the Agent under the Debt Restructuring Agreement on or
before July 30, 2002, of cash in an amount equal to the excess
of (x) $20,000,000 over (y) the Principal Amount (the "MINIMUM
PAYMENT AMOUNT"), whether or not the Contingent Payment
Agreement entitles the Agent to receive such amount, and
(e) a pledge of the common stock of JFF acquired by Pledgor and all
of Pledgor's rights under a Registration Rights Agreement (the
"REGISTRATION RIGHTS AGREEMENT," this Agreement, together with
the Guaranty, the Debt Restructuring Agreement, the Contingent
Payment Agreement and the Registration Rights Agreement, the
"TRANSACTION DOCUMENTS").
(6) Pledgor is the record and beneficial owner of the shares of
JFF common stock described in Schedule I hereto and issued by JFF (the
"PLEDGED STOCK").
(7) It is a condition precedent to the restructuring of the
Existing Lender Indebtedness and the consummation of the Debt Restructuring
Agreement that, inter alia, the Pledgor shall have (i) entered into the
Guaranty of even date in favor of the Agent on behalf of the Secured
Lenders and (ii) made the pledge, granted the security interests and
delivered the Pledged Stock contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Secured Lenders to restructure the Existing Lender
Indebtedness and to enter into the Debt Restructuring Agreement, Pledgor
hereby agrees with the Agent for the ratable benefit of the Secured Lenders
as follows:
Section 1. Grant and Pledge of Security. Pledgor hereby assigns
and pledges to the Agent for the ratable benefit of the Secured Lenders,
and hereby grants to the Agent for the ratable benefit of the Secured
Lenders a security interest in, the following (collectively, the
"COLLATERAL"):
(a) the Pledged Stock and the certificates representing the
Pledged Stock, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
Pledged Stock as set forth on Schedule I hereto;
(b) all additional shares of stock or other securities issued
by JFF to Pledgor in any manner, and the certificates representing
such additional shares or securities, and all dividends, cash,
instruments and other property from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all
of such securities;
(c) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of
the types described in clauses (a) and (b) of this Section 1 and all
accessions and additions to, all substitutions for and all proceeds,
products, substitutions and replacement of any and all of the
foregoing) and, to the extent not otherwise included, all products
of, profits or other amounts from time to time paid or payable with
respect to any of the foregoing; and
(d) all rights of Pledgor under or in connection with the
Registration Rights Agreement.
Section 2. Secured Obligations. This Agreement secures the full
and prompt payment when due by Pledgor to the Agent on behalf of the
Secured Lenders of the following obligations, liabilities, sums, and
expenses set forth in clauses (a) and (b) (collectively, the "SECURED
OBLIGATIONS"):
(a) payment by Pledgor in cash of the Guaranteed Obligations
(as defined in the Guaranty) on the dates when due as set forth
therein; and
(b) payment on demand of any and all sums advanced by the Agent
in order to preserve the Collateral or preserve its security interest
in the Collateral,
including, without limitation, any such liabilities and expenses incurred
in any proceeding for the collection or enforcement of any rights of the
Agent and the Secured Lenders hereunder or under any other Transaction
Document after an Event of Default (as such term is defined in Section 3),
including the reasonable expenses of retaking, holding, preparing for sale,
selling or otherwise disposing or realizing on the Collateral, or of any
exercise by the Agent or any Secured Lender of its rights hereunder.
Section 3. Events of Default. Events of Default hereunder shall
be those "Events of Default" set forth in Section 3 of the Guaranty.
Section 4. Delivery of Collateral; Cash.
(a) Certificates. All certificates or instruments representing
or evidencing Collateral shall be delivered to and held by or on behalf of
the Agent pursuant hereto, shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to the
Agent. The Agent shall have the right, at any time in its discretion and
without notice to Pledgor, to transfer to or register in the name of Agent
or any of its nominees any or all of the Collateral, subject, however, for
so long as no Event of Default has occurred, to the rights of the Pledgor
as beneficial holder thereof as set forth in Section 7. In addition, the
Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
(b) Notices. In connection with the pledge granted hereunder of
the rights of Pledgor under or in connection with the Registration Rights
Agreement, there shall be delivered to and held by or on behalf of the
Agent an executed Notice of Transfer of Registration Rights and Registrable
Securities and an executed Notice of Substitution of Investors' Agent under
the Registration Rights Agreement (together, the "REGISTRATION RIGHTS
AGREEMENT NOTICES"), in the form attached hereto.
(c) Cash. Upon the Agent's receipt of cash in respect of any
Collateral, including, without limitation, any dividends, subject to the
election set forth in Secion 7(a)(ii), the Agent shall apply the same as
set forth in Section 11(b).
Section 5. Representations, Warranties and Covenants. Pledgor
represents, warrants, agrees and covenants as to itself and the Collateral,
which representations, warranties, agreements and covenants shall survive
execution and delivery of this Agreement, as follows:
(a) Pledgor is the beneficial owner of the Collateral free and
clear of any Lien or "adverse claim" (as term is defined in ss.
8-102(a)(1) of the Uniform Commercial Code as in effect on the date
hereof in the State of New York (the "N.Y. U.C.C.")) of any Person,
and Pledgor shall defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest
therein adverse to the Agent. No effective financing statement or
other instrument similar in effect covering or purporting to cover
all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Agent relating to
this Agreement.
(b) Pledgor has not done and will not do any business under any
name other than the one under which it has executed this Agreement.
(c) All of the shares of stock that constitute Pledged Stock
are in certificated form, have been duly authorized and validly
issued and are fully paid and non-assessable. Pledgor has full power,
authority and legal right to pledge the Pledged Stock pledged by it
pursuant to this Agreement.
(d) The Pledged Stock constitute the percentages of (i) the
issued and outstanding shares of stock of JFF and (ii) all shares of
JFF common stock that are outstanding or subject to issuance under
all warranties, options, convertible instruments or other agreements
indicated on Schedule I hereto.
(e) The certificates evidencing the Pledged Stock have been
physically delivered to the Agent, together with duly executed
instruments of transfer or assignment in blank, such that the Agent
has "control" over the Pledged Stock under N.Y. U.C.C.
ss.8-106(b)(2). All other actions necessary or desirable to perfect
and protect the security interest in the Collateral taken as a whole
created under this Agreement have been duly made or taken, and this
Agreement, the pledge of the Collateral pursuant hereto, together
with such filings and other actions, create a valid and perfected
first priority security interest in the Collateral taken as a whole,
securing the payment of the Secured Obligations, and suffice to make
Agent a "protected purchaser" of the Pledged Stock as such term is
defined in N.Y. U.C.C. ss. 8-303.
(f) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other third party is
required (i) for the grant by such Pledgor of the assignment and
security interest granted hereunder, for the pledge by such Pledgor
of the Collateral pursuant hereto or for the execution, delivery or
performance of this Agreement by such Pledgor, (ii) for the
perfection or maintenance of the pledge, assignment and security
interest created hereunder (including the first priority nature of
such pledge, assignment or security interest), except for the filing
of financing and continuation statements under the N.Y. U.C.C. or the
Uniform Commercial Code as in effect on the date hereof in the State
of Delaware (the "DEL. U.C.C."), which financing statements have been
duly delivered for filing, and, upon the filing thereof, will be
effective, under applicable law, to perfect the security interest
granted to the Agent herein, or (iii) for the exercise by the Agent
of its voting or other rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement.
(g) The Agreement is made without any recourse to Pledgor or
any of its assets. Accordingly, Pledgor recognizes and agrees that
Agent has no adequate remedy at law for any breach hereof and agrees
to specific performance of any provision hereof and/or injunctive
relief in respect thereof may granted against Pledgor.
Section 6. Further Assurances. (a) Pledgor agrees that from
time to time, at its own expense, it shall promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may request, in order to perfect
and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Pledgor will execute and
file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as
the Agent may request in its sole discretion, in order to perfect and
preserve the pledge and security interest granted or purported to be
granted hereunder.
(b) Pledgor hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral, including, without limitation, the
proceeds thereof (as such term is defined in N.Y. U.C.C. ss. 9-306 and Del.
U.C.C. ss. 9-306), without the signature of such Pledgor where permitted by
law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient
as a financing statement where permitted by law.
(c) Pledgor shall furnish to the Agent from time to time such
reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(d) All dividends or other amount that are received by Pledgor
contrary to the provisions of this Agreement shall be received in trust for
the benefit of the Agent, shall be segregated from other funds of the
Pledgor and shall be forthwith paid over to the Agent as Collateral in the
same form as so received (with any necessary indorsement).
(e) The Pledgor warrants that its principal place of business
is located at 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The Pledgor
shall not change its principal place of business except upon 30 days prior
written notice to the Agent.
Section 7. Rights of Pledgor. (a) So long as no Event of
Default shall have occurred and be continuing:
(i) Pledgor may direct Agent in writing to exercise any and all
voting and other consensual rights pertaining to the Collateral or
any part thereof for any purpose not inconsistent with the terms of
the Transaction Documents; provided, however, that Agent shall be
entitled to refrain from taking such action if, in the Agent's
reasonable judgment, such action could have a material adverse effect
on the value of the Collateral or any part thereof.
(ii) Pledgor may direct Agent in writing to sell any or all of
the Pledged Stock for cash on any date if (x) the net cash to be
received in respect of the Pledged Stock to be sold (on a per share
basis) multiplied by the number of shares of Pledged Stock (whether
or not sold) is equal to or exceeds 110% of the aggregate known
liquidated amount of the Secured Obligations (whether or not the same
are then due and payable) outstanding and not paid as of such date;
and (y) the proceeds thereof shall be, at the election of the
Pledgor, (u) received by the Agent for distribution as set forth in
section 11(b), or (v) delivered to and held by the Agent as cash
Collateral under this Agreement.
(iii) Upon any sale, transfer or other disposition of any
portion of Collateral in accordance with section 7(a)(ii), the Agent
will, at the Pledgor's expense, execute and deliver to Pledgor such
documents as such Pledgor shall reasonably request to evidence the
release of such portion of Collateral from the assignment and
security interest granted hereby; provided, however, that Pledgor
shall have delivered to the Agent, at least three business days prior
to the date of the proposed release, a written request for release
describing the portion of Collateral and the terms of the sale,
transfer or other disposition in reasonable detail, including,
without limitation, the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Agent
and a certificate executed by such Pledgor to the effect that the
transaction is in compliance with this Pledge Agreement and as to
such other matters as the Agent may reasonably request.
(iv) Notwithstanding the foregoing sections 7(a)(i-iii) or any
other provision of this Pledge Agreement, the Agent may act or
refrain from acting hereunder notwithstanding any direction from
Pledgor, and may disregard any direction from Pledgor, if in the
Agent's reasonable judgment such direction would cause Agent to incur
any Liability.
(b) Upon the occurrence and during the continuance of an Event
of Default all rights of Pledgor to direct the Agent to exercise or refrain
from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 7(a) shall
automatically cease, and all such rights shall thereupon become vested in
the Agent, which shall thereupon have the sole right to exercise or refrain
from exercising such voting and other consensual rights.
Section 8. Transfers and Other Liens; Additional Shares. (a)
Pledgor agrees not (i) to sell, assign (by operation of law or otherwise)
or otherwise dispose of, or grant any option with respect to, any of the
Collateral except as permitted in Section 7, or (ii) to create or suffer to
exist any lien, pledge, security interest or other encumbrance upon or with
respect to any of the Collateral except for the pledge, assignment and
security interest created under this Agreement.
(b) Pledgor shall pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional shares
of stock or other securities of JFF received by it at any time.
Section 9. Agent Appointed Attorney-in-Fact. Pledgor hereby
irrevocably appoints the Agent, effective upon the occurrence and during
the continuation of any Event of Default, such Pledgor's attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name
of such Pledgor or otherwise, from time to time in the Agent's discretion
and, if required by law, upon notice to such Pledgor, to take any action
and to execute any instrument that the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral,
(c) to receive, indorse and collect any drafts, other
instruments or documents in connection with clause (a) above, and
(d) to file any claims or take any action or institute any
proceedings that the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce
compliance with the rights of the Agent with respect to any of the
Collateral.
Section 10. Registration Rights Agreement. Pledgor covenants
and agrees that it will not exercise any right under the Registration
Rights Agreement to demand registration of any of the Collateral comprising
securities of JFF under the Securities Act of 1933, as amended, unless (I)
each Secured Lender has previously consented thereto in writing or (II) (a)
the registration statement covers all of the Pledged Stock, (b) the closing
sale price (or, in the absense of a closing sale price, the closing bid
price) of JFF common stock reported in The Wall Street Journal for each of
the 20 trading days prior to the date of demand exceeds 110% of the
aggregate known liquidated amount of the Secured Obligations outstanding
and not paid on such date (whether or not the same are then due and
payable), and (c) the registration statement seeks to register such
securities in connection with a transaction which will pay all Secured
Obligations in full and in cash upon the consummation thereof.
Section 11. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party upon default under the N.Y. U.C.C. (whether or not the N.Y.
U.C.C. applies to the affected Collateral) and also may without
notice except as specified below, sell the Collateral or any part
thereof at public auction or private sale, at any of the Agent's
offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable.
At any such sale or auction, Agent may bid for, and become the
purchaser of, the whole or any part of the Collateral offered for
sale. Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to such Pledgor of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Agent may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) (i) All cash proceeds received by the Agent in respect of
any dividends, sale of, collection from, or other realization upon
all or any part of the Collateral may, in the discretion of the
Agent, be held by the Agent as collateral for, and/or then or at any
time thereafter shall be applied as follows:
(A) FIRST, to the payment of indemnified Liabilities
under Section 14;
(B) SECOND, to the payment of all Secured Obligations
then due and owing other than the Minimum Payment Amount,
(C) THIRD, to the payment of the Minimum Payment Amount,
until all Secured Obligations have been paid in full; and
(D) FOURTH, to the extent proceeds remain after the
application pursuant to the preceding clauses (A), (B) and (C),
and following the termination of this Agreement pursuant to
Section 19 hereof, to the Pledgor or to whomever may be
lawfully entitled to receive such surplus.
(ii) All payments required to be made hereunder to the
Secured Lenders shall be made to the Agent for the account of the
Secured
Lenders.
(iii) For purposes of applying payments received in
accordance with this Section 11(b), the Agent shall be entitled to
rely upon the Secured Lenders for a determination (which the Secured
Lenders agree (or shall agree) to provide upon request of the Agent)
of the outstanding Secured Obligations owed to the Secured Lenders.
(c) The Agent may deliver the Registration Rights Agreement
Notices and exercise all rights of Pledgor under the Registration Rights
Agreement in respect of the Pledged Stock.
Section 12. Right to Redeem. Prior to such time as the Agent
has disposed of or entered into a contract (including, without limitation
delivery of a sell order to a broker or market maker) for the disposition
of the Collateral, or any part thereof, Pledgor may redeem:
(a) on any date, all (but not less than all) of the Collateral
by paying to the Agent cash by wire transfer of immediately available
funds in the aggregate known liquidated amount of all Secured
Obligations outstanding and not paid on such date (whether or not the
same are then due and payable), or
(b) on any date after July 30, 2002, all (but not less than
all) of Pledged Stock if the same is traded on a public market for
which closing sale prices (or, in the absence of a closing sale
price, the closing bid price) are reported in The Wall Street
Journal, by paying to the Agent cash by wire transfer of immediately
available funds in an amount equal to the lesser of (x) the aggregate
known liquidated amount of all Secured Obligations outstanding and not
paid on such date (whether or not the same are then due and payable)
and (y) the Stock Value.
"STOCK VALUE" on any date shall mean the average of the closing sale price
(or, in the absence of a closing sale price, the closing bid price) of JFF
common stock reported in The Wall Street Journal for the twenty (20)
trading days prior to such date, multiplied by the number of shares of JFF
common stock held as Pledged Stock.
Section 13. The Agent. (a) The Secured Lenders, by their
acceptance of the benefits of this Agreement and the Debt Restructuring
Agreement, hereby irrevocably designate BNP to act as the Agent with
respect to this Agreement and as specified in the other Transaction
Documents. Each Secured Lender hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and
the other Transaction Documents and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform
such duties hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof or thereof and such other powers
as are reasonably incidental thereto. The Agent may perform any of its
duties hereunder and under the other Transaction Documents by or through
its authorized agents or employees.
(b) The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other Transaction
Documents. The duties of the Agent shall be mechanical and administrative
in nature; the Agent shall not have by reason of this Agreement or any
other Transaction Document a fiduciary relationship in respect of any
Secured Lender; and nothing in this Agreement or any other Transaction
Document, expressed or implied, is intended to or shall be so construed as
to impose upon the Agent any obligations in respect of this Agreement or
any other Transaction Document except as expressly set forth herein or
therein.
(c) The Agent shall not be responsible for insuring the
Collateral or for the payment of taxes, charges or assessments or
discharging of Liens upon the Collateral or otherwise as to the maintenance
of the Collateral. The Agent shall not be required to ascertain or inquire
as to the performance by the Pledgor of any of the covenants or agreements
contained in this Agreement or any other Transaction Document.
(d) The Agent shall be under no obligation or duty to take any
action under this Agreement or any other Transaction Document if taking
such action (i) would subject the Agent to a tax in any jurisdiction where
it is not then subject to a tax or (ii) would require the Agent to qualify
to do business in any jurisdiction where it is not then so qualified,
unless the Agent receives security or indemnity satisfactory to it against
such tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under
this Agreement or any other Transaction Document or (iii) would subject the
Agent to in personam jurisdiction in any locations where it is not then so
subject. Notwithstanding any other provision of this Agreement or any other
Transaction Document, neither the Agent nor any of its officers, directors,
employees, affiliates or agents shall, in its individual capacity, be
personally liable for any action taken or omitted to be taken by it in
accordance with this Agreement or any other Transaction Document except for
its own gross negligence or willful misconduct.
(e) Independently and without reliance upon the Agent, each
Secured Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of Pledgor and JFF in connection with the making and
the continuance of the Secured Obligations and the taking or not taking of
any action in connection therewith, and (ii) its own appraisal of the
creditworthiness of Pledgor and JFF, and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any
Secured Lender with any credit or other information with respect thereto,
whether coming into its possession before the extension of any Secured
Obligations or at any time or times thereafter. The Agent shall not be
responsible in any manner whatsoever to any Secured Lender for the
correctness of any recitals, statements, information, representations or
warranties in any Transaction Document or in any document, certificate or
other writing delivered in connection therewith or for the execution,
effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or the other
Transaction Documents or the security interests granted hereunder or
thereunder or the financial condition of Pledgor or be required to make any
inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any other Transaction
Document, or the financial condition of Pledgor, or the existence or
possible existence of any Event of Default. The Agent makes no
representations as to the value or condition of the Collateral or any part
thereof, or as to the title of Pledgor thereto or as to the security
afforded by this Agreement.
(f) (i) No Secured Lender shall have the right to cause the
Agent to take any action with respect to the Collateral other than as set
forth herein. If the Agent shall request instructions from the Secured
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement, the Agent shall be entitled to refrain from
such act or taking such action unless and until it shall have received
instructions from each Secured Lender and to the extent requested,
appropriate indemnification in respect of actions to be taken, and the
Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Secured Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Secured Lenders.
(ii) The Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement or any other
Transaction Document at the request or direction of any of the Secured
Lenders, unless such Secured Lenders shall have offered to the Agent
reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
order or other document or telephone message signed, sent or made by the
proper Person or entity, and, with respect to all legal matters pertaining
to this Agreement or any other Transaction Document and its duties
hereunder or thereunder, upon advice of counsel selected by it.
(h) To the extent the Agent is not reimbursed and indemnified
by Pledgor under this Agreement or any other Transaction Document, the
Secured Lenders will reimburse and indemnify the Agent, in proportion to
their respective outstanding principal amounts of Secured Obligations, for
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in performing its duties hereunder or under any
other Transaction Document, or in any way relating to or arising out of its
actions as Agent in respect of this Agreement or under any other
Transaction Document (including any amounts required to be returned by the
Agent in respect of Collateral), except for those resulting solely from the
Agent's own gross negligence or willful misconduct. The indemnities set
forth in this Section 13(h) shall survive the repayment of the Secured
Obligations, with the respective indemnification at such time to be based
upon the outstanding principal amounts (determined as described above) of
the Secured Obligations at the time of the respective occurrence upon which
the claim against the Agent is based or, if same is not reasonably
determinable, based upon the outstanding principal amounts (determined as
described above) of the Secured Obligations as in effect immediately prior
to the termination of this Agreement. The indemnities set forth in this
Section 13(h) are in addition to any indemnities provided by the Secured
Lenders to the Agent pursuant to the Credit Agreement, with the effect
being that the Secured Lenders shall be responsible for indemnifying the
Agent to the extent the Agent does not receive payments pursuant to this
Section 13(h) from the Secured Lenders (although in such event, and upon
the payment in full of all such amounts owing to the Agent, the respective
Secured Lenders who paid same shall be subrogated to the rights of the
Agent to receive payment from the Secured Lenders).
(i) With respect to its obligations as a lender under the Debt
Restructuring Agreement and any other Transaction Documents to which the
Agent is a party, and to act as agent under one or more of such Transaction
Documents, the Agent shall have the rights and powers specified therein and
herein for a "Secured Lender", or an "Agent", as the case may be, and may
exercise the same rights and powers as though it were not performing the
duties specified herein; and the term "Secured Lender," or any similar term
shall, unless the context clearly otherwise indicates, include the Agent in
its individual capacity. The Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with
the Pledgor or any affiliate or Subsidiary of the Pledgor as if it were not
performing the duties specified herein or in the other Transaction
Documents, and may accept fees and other consideration from Pledgor for
services in connection with the Transaction Documents and otherwise without
having to account for the same to the Secured Lenders.
(j) (i) The Agent may resign from the performance of all of its
functions and duties under this Agreement at any time by giving 20 business
days' prior or written notice to Pledgor and the Secured Lenders. Such
resignation shall take effect upon the appointment of a successor Agent
pursuant to clause (ii) or (iii) of this Section 13(j).
(ii) If a successor Agent shall not have been appointed
within said 20 business day period by the Secured Lenders, the Agent, with
the consent of Pledgor, which consent shall not be unreasonably withheld or
delayed, shall then appoint a successor Agent who shall serve as Agent
hereunder until such time, if any, as the Secured Lenders appoint a
successor Agent as provided above.
(iii) If no successor Agent has been appointed pursuant
to clause (ii) of this Section 13(j) by the 20th business day after the
date of such notice of resignation was given by the Agent, the Secured
Lenders shall then appoint a successor Agent who shall serve as Agent
hereunder until such time, if any, as the Secured Lenders appoint a
successor Agent as provided above.
(k) [omitted].
Section 14. Indemnity and Expenses. Pledgor agrees to indemnify
the Agent and each Secured Lender from and hold the Agent and each Secured
Lender harmless against any and all Liabilities (defined below) arising out
of or in connection with this Agreement (including, without limitation,
enforcement of this Agreement); provided, however, that the payment of such
Liabilities shall be payable out of, and the Agent (and the Secured Lenders
through the Agent) shall have recourse only against and limited to the
Collateral. "LIABILITIES" means any and all claims, liabilities, damages,
expenses, costs (including without limitation fees and disbursements of
counsel to the Agent and each of the Secured Lenders) or other obligations
incurred by the Agent or any Secured Lender arising out of or in connection
with (i) the enforcement of any Transaction Document (including in the
context of any dispute with respect thereto), or (ii) the breach of any
representation, warranty or other provision of any Transaction Document,
provided, however, that unless such enforcement is made against or such
breach is by the Guarantor or THLC, Liabilities shall only include 50% of
such claims, liabilities, damages, expenses, costs or other obligations.
Section 15. Security Interest Absolute. The obligations of
Pledgor under this Agreement are independent of the Secured Obligations,
and a separate action or actions may be brought and prosecuted against such
Pledgor to enforce this Agreement. All rights of the Agent and the pledge
and security interest granted hereunder, and all obligations of Pledgor
hereunder, shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of any Transaction
Document or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from any Transaction
Document, including, without limitation, any increase in the Secured
Obligations resulting from the extension of additional credit to the
Pledgor or otherwise;
(iii) any taking, exchange, release or nonperfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty, including the Guaranty, for
all or any of the Secured Obligations;
(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Secured Obligations or any other assets of the Pledgor;
(v) any change, restructuring or termination of the corporate
structure or
existence of the Pledgor or any affiliate; or
(vi) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Pledgor or a third-party
grantor of a security interest.
Section 16. Amendments; Waivers; Execution in Counterparts. (a)
No amendment or waiver of any provision of this Agreement, and no consent to
any departure by the Pledgor herefrom, shall in any event be effective
unless the same shall be in writing and signed by the Agent, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
(b) No failure on the part of the Agent or any Secured Lender
to exercise, and no delay in exercising, any right, power or privilege
hereunder shall operate as a waiver thereof or consent thereto; nor shall
any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
(c) This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 17. Notices. All notices and other communications
provided for hereunder to any party shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, couriered,
telecopied or delivered to it, addressed to it at the address set forth in
Schedule II to the Debt Restructuring Agreement. All such notices and other
communications shall be effective (a) if mailed, five days after and
excluding the date of mailing, postage prepaid, (b) if couriered, on the
first business day after deposited with a reputable overnight courier
service, fee prepaid, (c) if transmitted by telecopier or delivered by hand
prior to 2 p.m. on any business day, on such day, and otherwise on the next
business day.
Section 18. Continuing Security Interest; Assignments under the
Debt Restructuring Agreement. This Agreement shall create a continuing
security interest in the Collateral and shall (a) remain in full force and
effect until the indefeasible and irrevocable payment in full in cash of
the Secured Obligations, (b) be binding upon Pledgor, its successors and
assigns and (c) inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Secured Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Secured Lender may assign or otherwise transfer
all or any portion of its rights and obligations under the Debt
Restructuring Agreement to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
such Secured Lender herein or otherwise, in each case as provided in
Section 5 of the Debt Restructuring Agreement.
Section 19. Release and Termination. Upon the indefeasible and
irrevocable payment in full in cash of all Secured Obligations, the pledge
and security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Pledgor. Upon any such termination, the
Agent will, at the Pledgor's expense, execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination.
Section 20. Jurisdiction, Etc. (A) THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
UNLESS OTHERWISE DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS USED IN
ARTICLE 9 OF THE N.Y. U.C.C. ARE USED HEREIN AS THEREIN DEFINED. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN XXX
XXXXXX XX XXX XXXXX XX XXX XXXX SITTING IN NEW YORK CITY OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH SUCH PARTY
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT BROUGHT IN
ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER SUCH PARTY. EACH SUCH PARTY FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH
HEREIN OR IN THE DEBT RESTRUCTURING AGREEMENT, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH SUCH PARTY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, ANY
SECURED LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY
OTHER JURISDICTION.
(B) EACH PARTY TO THIS AGREEMENT HERETO HEREBY IRREVOCABLY
WAIVES TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized, as of the date first above written.
SNEAKER GUARANTEE LLC
as Pledgor
By: Xxxxxx X. Xxx Company
By /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Managing Director
Address:
Telephone:
Telecopier:
BANQUE NATIONALE DE PARIS,
as Agent
By /s/ Xxxxxxx Xxxxxxx, /s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx; Xxxx Xxxxxx
Title: VP; AVP
Schedule I
PLEDGED STOCK
Percentage of
Certificate Number and Shares
Issuing Corporation No. Type of Shares Outstanding Par Value
------------------- ----------- -------------- -------------- ---------
Just For Feet, Inc. A3502 926,355 2.89% $.0001/share
Common Stock
PLEDGE AND SECURITY AGREEMENT
Dated July 2, 1998
made by
SNEAKER GUARANTEE LLC
as Pledgor,
to
BANQUE NATIONALE DE PARIS,
As Agent
on behalf of itself and for
XXXXXXX XXXXX SENIOR FLOATING RATE FUND, INC., XXXXXXX XXXXX PRIME
RATE PORTFOLIO and XXXXXXX XXXXX DEBT STRATEGIES PORTFOLIO
