Exhibit 10.4
PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of July 15, 2002 (this
"Agreement"), is executed by and among (a) Barney's, Inc., a New York
corporation, Barneys America, Inc., a Delaware corporation, Barneys (CA) Lease
Corp., a Delaware corporation, Barneys (NY) Lease Corp., a Delaware corporation,
Xxxxx All-American Sportswear Corp., a New York corporation, BNY Licensing
Corp., a Delaware corporation, and Barneys America (Chicago) Lease Corp., a
Delaware corporation (collectively, the "Pledgors" and each individually, a
"Pledgor"), and (b) GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, in its capacity as administrative agent (with its successors in
such capacity, the "Administrative Agent") for itself and for the "Lenders"
under the Credit Agreement defined below. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement (as defined below).
WITNESSETH:
(1) The Pledgors have entered into the Credit Agreement, dated
as of even date herewith (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement"), with the financial
institutions party thereto as lenders (collectively, the "Lenders"), and the
Administrative Agent, pursuant to which the Lenders have agreed, subject to
certain conditions precedent, to make loans and other financial accommodations
to the Pledgors from time to time;
(2) Each of the Pledgors owns (a) the issued and outstanding
equity interests set forth opposite such Pledgor's name on Exhibit A attached
hereto and made a part hereof (the "Equity Interests") and (b) the promissory
notes and instruments listed on Exhibit B attached hereto and made a part
hereof; and
(3) The Administrative Agent and the Lenders have required, as
a condition to their entering into the Credit Agreement, that the Pledgors
execute and deliver this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and
of any financial accommodations or extensions of credit heretofore, now or
hereafter made to or for the benefit of the Pledgors pursuant to the Credit
Agreement or any other agreement, instrument or document executed pursuant to or
in connection therewith, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgors and the
Administrative Agent hereby agree as follows:
1. Pledge. Each of the Pledgors hereby pledges to the
Administrative Agent, for the benefit of the Administrative Agent, the Lenders
and the other Holders, and grants to the Administrative Agent for the benefit of
the Administrative Agent, the Lenders and the other Holders, a security interest
in, the following (collectively, the "Pledged Collateral"):
(a) All of the right, title and interest of such Pledgor in
the Equity Interests, whether now existing or hereafter arising, and
the certificates representing the shares of such capital stock (such
now-existing shares being identified on Exhibit A attached hereto and
made a part hereof), all options and warrants for the purchase of
additional equity interests now or hereafter held in the name of such
Pledgor (all of said Equity Interests, options and warrants and all
capital stock held in the name of the Pledgor as a result of the
exercise of such options or warrants being hereinafter collectively
referred to as the "Pledged Stock"), herewith delivered to the
Administrative Agent accompanied by stock powers in the form of Exhibit
C attached hereto and made a part hereof duly executed in blank, and
all dividends, distributions, 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;
(b) All additional equity interests from time to time acquired
by such Pledgor in any manner, and the certificates representing such
additional equity interests (any such additional equity interests shall
constitute part of the Pledged Stock and the Administrative Agent is
irrevocably authorized to amend Exhibit A from time to time to reflect
such additional equity interests), and all options, warrants,
dividends, distributions, cash, instruments and other rights and
options from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such equity interests;
(c) the Indebtedness evidenced by the promissory notes and
instruments listed on Exhibit B attached hereto (the "Pledged
Indebtedness"), and the promissory notes or instruments evidencing the
Pledged Indebtedness, and all interest, cash, instruments and other
property and assets from time to time received, receivable or otherwise
distributed in respect of the Pledged Indebtedness;
(d) all additional Indebtedness arising after the date hereof
and owing to such Pledgor and evidenced by promissory notes or other
instruments, together with such promissory notes and instruments, and
all interest, cash, instruments and other property and assets from time
to time received, receivable or otherwise distributed in respect of
that Pledged Indebtedness;
(e) The property and interests in property described in
Section 4 below; and
(f) All proceeds of the foregoing.
Notwithstanding the foregoing, the Pledged Collateral shall
not include, and no security interest is granted to the Administrative Agent in,
the equity interests of Barneys Asia Co., L.L.C., a majority-owned Subsidiary of
BNY Licensing Corp., owned by BNY Licensing Corp.
2. Security for Liabilities. The Pledged Collateral secures
the prompt payment, performance and observance of (i) all Obligations and (ii)
all obligations of the Pledgors under this Agreement (all such obligations
referred to in clauses (i) and (ii) now or hereafter existing being hereinafter
collectively referred to as the "Liabilities").
3. Delivery of Pledged Collateral; Registration and
Acknowledgments. All certificates, promissory notes and instruments representing
or evidencing the Pledged Collateral, if any, shall be delivered to and held by
or on behalf of the Administrative Agent pursuant hereto and shall be in
suitable form for transfer by delivery and shall be accompanied by duly executed
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instruments of transfer, powers, or assignments in blank as appropriate (such
instruments of transfer, powers, or assignments in blank, being the "Powers"),
all in form and substance satisfactory to the Administrative Agent. After the
occurrence and during the continuance of an Event of Default, the Administrative
Agent shall have the right, at any time in its discretion and without notice to
any Pledgor, to transfer to or to register in the name of the Administrative
Agent or any of its nominees any or all of the Pledged Collateral, subject only
to the revocable rights specified in Sections 7 and 8. In addition, the
Administrative Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Collateral for certificates or
instruments of smaller or larger denominations.
4. Pledged Collateral Adjustments. If, during the term of this
Agreement:
(a) Any stock dividend, reclassification, readjustment or
other change is declared or made in the capital structure of any issuer
of the Pledged Stock, or any option included within the Pledged
Collateral is exercised, or both, or
(b) Any subscription warrants, shares, or any other rights or
options shall be issued in connection with the Pledged Collateral,
then all new, substituted and additional shares, warrants, shares, rights,
options or other securities, issued by reason of any of the foregoing, shall be
immediately delivered to and held by the Administrative Agent under the terms of
this Agreement and shall constitute Pledged Collateral hereunder; provided,
however, that nothing contained in this Section 4 shall be deemed to permit any
distribution, issuance of additional shares, warrants, shares, rights or
options, reclassification, readjustment or other change in the capital structure
which is not expressly permitted in the Credit Agreement nor to prohibit any
such distribution, issuance of additional equity interests, warrants, shares,
rights or options, reclassification, readjustment or other change in the capital
structure of such issuer which is expressly permitted in the Credit Agreement.
5. Subsequent Changes Affecting Pledged Collateral. Each of
the Pledgors represents and warrants that it has made its own arrangements for
keeping itself informed of changes or potential changes affecting the Pledged
Collateral (including, but not limited to, rights to convert, rights to
subscribe, payment of distributions, reorganization or other exchanges, offers
to purchase and voting rights), and such Pledgor agrees that none of the
Administrative Agent or any of the Lenders shall have any obligation to inform
such Pledgor of any such changes or potential changes or to take any action or
omit to take any action with respect thereto. The Administrative Agent may,
after the occurrence and during the continuance of an Event of Default, without
notice and at its option, transfer or register the Pledged Collateral or any
part thereof into its or its nominee's name with or without any indication that
such Pledged Collateral is subject to the security interest hereunder.
6. Representations and Warranties. Each of the Pledgors
represents and warrants as follows:
(a) (i) Such Pledgor is the sole legal and beneficial owner of
the Equity Interests set forth opposite its name on Exhibit A attached
hereto and made a part hereof, free and clear of any Lien except for
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the Lien created by this Agreement and, if any, Liens permitted under
the Credit Agreement, and (ii) such Pledgor is and at the time of
delivery of the Pledged Indebtedness to the Administrative Agent will
be, the sole owner of the Pledged Indebtedness set forth opposite its
name on Exhibit B attached hereto and made a part hereof free and clear
of any Lien thereon or affecting title thereto, except for any Lien
created by this Agreement and, if any, Liens permitted under the Credit
Agreement;
(b) (i) All of the Pledged Stock has been duly authorized,
validly issued and is fully paid and non-assessable, and (ii) the
Pledged Indebtedness has been duly authorized, authenticated or issued
and delivered by, and is the legal, valid and binding obligations of,
the applicable Pledgor, and no such Pledgor is in default thereunder;
(c) All of the Pledged Stock is presently represented by the
certificates listed on Exhibit A hereto. As of the date hereof, there
are no existing options, warrants, calls or commitments of any
character whatsoever relating to the Pledged Stock;
(d) Such Pledgor has full power and authority to enter into
this Agreement;
(e) There are no restrictions upon the voting rights
associated with, or upon the transfer of, any of the Pledged Collateral
except pursuant to (i) the Securities Act and (ii) the terms of the
Option to Purchase Capital Stock of Barneys Japan Company Limited,
granted to Barney's, Inc., dated as of January 28, 1999;
(f) Such Pledgor has the right to vote, pledge, assign and
grant a security interest in or otherwise transfer such Pledged
Collateral free of any Liens, except as set forth in paragraph (e)
above;
(g) No authorization, approval, or other action by, and no
notice to or filing with, any Governmental Authority is required either
(i) for the pledge of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by such
Pledgor or (ii) for the exercise by the Administrative Agent of the
voting or other rights provided for in this Agreement or the remedies
in respect of the Pledged Collateral pursuant to this Agreement (except
as may be required in connection with such disposition by laws
affecting the offering and sale of securities generally);
(h) The pledge of the Pledged Collateral pursuant to this
Agreement, together with the delivery of the stock certificates,
promissory notes and other instruments pertaining thereto to the
Administrative Agent, creates a valid and perfected first priority
security interest in the Pledged Collateral, in favor of the
Administrative Agent for the benefit of the Administrative Agent, the
Lenders and the other Holders, securing the payment and performance of
the Liabilities;
(i) This Agreement has been duly executed and delivered by and
on behalf of such Pledgor and constitutes the legal, valid and binding
obligation of such Pledgor, enforceable against such Pledgor in
accordance with its terms;
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(j) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to the knowledge of such Pledgor,
threatened against such Pledgor or any of its property which will
materially and adversely affect the ability of such Pledgor to perform
its obligations under this Agreement;
(k) Such Pledgor (i) is a corporation duly formed, validly
existing and in good standing and is duly qualified to do business
under the laws of the State of its incorporation and (ii) has all
requisite corporate power and authority to own, operate and encumber
its property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and
following the consummation of the transactions contemplated by this
Agreement, the Credit Agreement or any of the other Loan Documents;
(l) The execution, delivery and performance of this Agreement
by such Pledgor (i) does not violate any indenture, mortgage, or any
other agreement to which such Pledgor is a party or by which any of its
properties or assets may be bound; (ii) complies with all corporate
organization documents of such Pledgor; and (iii) does not violate any
restriction on such transfer or encumbrance of the Pledged Collateral;
(m) The Powers are effective endorsements duly executed by an
appropriate person and give the Administrative Agent the authority they
purport to confer; and
(n) The Pledged Stock constitutes one hundred percent (100%)
of the issued and outstanding shares of Equity Interests of each issuer
thereof.
7. Voting Rights. During the term of this Agreement, and
except as provided in this Section 7 below, each of the Pledgors shall have the
right to vote the Pledged Stock on all corporate questions in a manner not
inconsistent with the terms of this Agreement, the Credit Agreement and the
other Loan Documents; provided, however, that no vote shall be cast, and no
consent shall be given or action taken, which would have the effect of impairing
the position or interest of the Administrative Agent in respect of the Pledged
Collateral or which would authorize, effect or consent to (unless and to the
extent expressly permitted by the Credit Agreement) (i) the dissolution or
liquidation, in whole or in part, of an issuer of Pledged Stock or Pledged
Indebtedness (a "Pledged Entity"); (ii) the consolidation or merger of a Pledged
Entity with any other Person; (iii) the sale, disposition or encumbrance of all
or substantially all of the assets of a Pledged Entity, except for Liens in
favor of the Administrative Agent; (iv) any change in the authorized number of
shares, the stated capital or the authorized share capital of a Pledged Entity
or the issuance of any additional shares of its Equity Interests; or (v) the
alteration of the voting rights with respect to the Equity Interests of a
Pledged Entity. After the occurrence and during the continuation of an Event of
Default, the Administrative Agent shall, at the Administrative Agent's option
and following written notice from the Administrative Agent to the applicable
Pledgor, exercise all voting rights pertaining to the Pledged Collateral,
including the right to take action by shareholder consent.
8. Dividends and Other Distributions. (a) So long as no Event
of Default shall have occurred and be continuing:
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(i) The Pledgors shall be entitled to receive and retain any
and all dividends, interest and distributions paid in respect of the
Pledged Collateral, notwithstanding such dividends, interest and
distributions being subject to the pledge and assignment thereof
pursuant to Section 1; provided, however, that any and all
(A) dividends, interest and distributions paid or
payable other than in cash with respect to, and instruments
and other property received, receivable or otherwise
distributed with respect to, or in exchange for, any of the
Pledged Collateral;
(B) dividends and other distributions paid or payable
in cash with respect to any of the Pledged Collateral on
account of a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in surplus; and
(C) cash paid, payable or otherwise distributed with
respect to principal of, or in redemption of, or in exchange
for, any of the Pledged Collateral;
shall be Pledged Collateral, and shall be forthwith delivered to the
Administrative Agent to hold, for the benefit of the Administrative
Agent, the Lenders and the other Holders, as Pledged Collateral and
shall, if received by any Pledgor, be received in trust for the
Administrative Agent, for the benefit of the Administrative Agent, the
Lenders and the other Holders, be segregated from the other property or
funds of such Pledgor, and be delivered immediately to the
Administrative Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement); and
(ii) The Administrative Agent shall execute and deliver (or
cause to be executed and delivered) to such Pledgor all such proxies
and other instruments as such Pledgor may reasonably request for the
purpose of enabling such Pledgor to receive the dividends or interest
payments which it is authorized to receive and retain pursuant to
clause (i) above.
(b) After the occurrence and during the continuation of an Event of
Default:
(i) All rights of the Pledgors to receive the dividends,
interest payments and other distributions which it would otherwise be
authorized to receive and retain pursuant to Section 8(a)(i) hereof
shall cease, and all such rights shall thereupon become vested in the
Administrative Agent, for the benefit of the Administrative Agent, the
Lenders and the other Holders, which shall thereupon have the sole
right to receive and hold as Pledged Collateral such dividends,
interest payments and other distributions;
(ii) All dividends, interest payments and other distributions
which are received by any Pledgor contrary to the provisions of clause
(i) of this Section 8(b) shall be received in trust for the
Administrative Agent, for the benefit of the Administrative Agent, the
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Lenders and the other Holders, shall be segregated from other funds of
such Pledgor and shall be paid over immediately to the Administrative
Agent as Pledged Collateral in the same form as so received (with any
necessary endorsements);
(iii) Such Pledgor shall, upon the reasonable request of the
Administrative Agent, at such Pledgor's expense, execute and deliver,
and cause the issuer of the Pledged Stock (other than Barneys Japan
Company Limited) and its officers and directors to execute and deliver,
all such instruments and documents, and do or cause to be done all such
other acts and things, as may be necessary or, in the opinion of the
Administrative Agent, such Pledgor or its or their counsel, advisable
to register the applicable Pledged Collateral under the provisions of
the Securities Act, and to exercise its best efforts to cause the
registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Administrative
Agent, such Pledgor or its or their counsel, are necessary or
advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the Commission applicable thereto;
(iv) Such Pledgor shall, upon the reasonable request of the
Administrative Agent, at such Pledgor's expense, use its best efforts
to qualify the Pledged Collateral under state securities or "Blue Sky"
laws and to obtain all necessary governmental approvals for the sale of
the Pledged Collateral, as requested by the Administrative Agent;
(v) Such Pledgor shall, upon the reasonable request of the
Administrative Agent, at such Pledgor's expense, cause the issuers of
the Pledged Stock to make available to the holders of its securities,
as soon as practicable, earnings statements which will satisfy the
provisions of Section 11(a) of the Securities Act; and
(vi) Such Pledgor shall, upon the reasonable request of the
Administrative Agent, at such Pledgor's expense, do or cause to be done
all such other acts and things as may be necessary to make such sale of
the Pledged Collateral or any part thereof valid and binding and in
compliance with applicable law.
The Pledgors will jointly and severally reimburse the Administrative Agent for
all expenses incurred by the Administrative Agent, including, without
limitation, reasonable attorneys' and accountants' fees and expenses in
connection with the foregoing. Upon or at any time after the occurrence and
during the continuation of an Event of Default, if the Administrative Agent
determines that, prior to any public offering of any securities constituting
part of the Pledged Collateral, such securities should be registered under the
Securities Act and/or registered or qualified under any other federal or state
law and such registration and/or qualification is not practicable, then each of
the Pledgors agrees that it will be commercially reasonable if a private sale,
upon at least ten (10) Business Days' notice to such Pledgor, is arranged so as
to avoid a public offering, even though the sales price established and/or
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obtained at such private sale may be substantially less than prices which could
have been obtained for such security on any market or exchange or in any other
public sale.
9. Transfers and other Liens. Other than as permitted under
the Credit Agreement, each of the Pledgors agrees that it will not (i) sell,
transfer or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral without the prior written consent of the Administrative
Agent, or (ii) create or permit to exist any Lien upon or with respect to any of
the Pledged Collateral (except for the security interest under this Agreement).
10. Defense of Title. Each of the Pledgors will defend the
title to the Pledged Collateral and the Liens of the Administrative Agent in the
Pledged Collateral against the claim of any Person and will maintain and
preserve such Liens.
11. Additional Equity Interests, Notes and Instruments. Each
of the Pledgors will, upon obtaining ownership of any additional Equity
Interests or promissory notes or instruments otherwise required to be pledged to
the Administrative Agent pursuant to any of the Loan Documents, which Equity
Interests, notes or instruments are not already Pledged Collateral, promptly
(and in any event within three (3) Business Days) deliver to the Administrative
Agent an amendment to this Agreement, duly executed by such Pledgor and in form
and substance satisfactory to the Administrative Agent, in respect of any such
additional Equity Interests, notes or instruments, pursuant to which such
Pledgor shall pledge to the Administrative Agent all of such additional Equity
Interests, notes and instruments. Each of the Pledgors hereby authorizes the
Administrative Agent to attach such amendment to this Agreement and agrees that
all Pledged Stock and Pledged Indebtedness listed on any such amendment
delivered to the Administrative Agent shall for all purposes hereunder be
considered Pledged Collateral.
12. Remedies. 1. The Administrative Agent shall have, in
addition to any other rights given under this Agreement or by law, all of the
rights and remedies with respect to the Pledged Collateral of a secured party
under the Uniform Commercial Code as in effect in the State of New York (the
"UCC"). In addition, after the occurrence and during the continuation of an
Event of Default, the Administrative Agent shall have such powers of sale and
other powers as may be conferred by applicable law. With respect to the Pledged
Collateral or any part thereof which shall then be in or shall thereafter come
into the possession or custody of the Administrative Agent or which the
Administrative Agent shall otherwise have the ability to transfer under
applicable law, the Administrative Agent may, in its sole discretion, without
notice except as specified below, after the occurrence and during the
continuation of an Event of Default, sell or cause the same to be sold at any
exchange, broker's board or at public or private sale, in one or more sales or
lots, at such price as the Administrative Agent may deem best, for cash or on
credit or for future delivery, without assumption of any credit risk, and the
purchaser of any or all of the Pledged Collateral so sold shall thereafter own
the same, absolutely free from any claim, encumbrance or right of any kind
whatsoever. The Administrative Agent or any Lender may, in its own name, or in
the name of a designee or nominee, buy the Pledged Collateral at any public sale
and, if permitted by applicable law, buy the Pledged Collateral at any private
sale. Each of the Pledgors jointly and severally agree to pay to the
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Administrative Agent all reasonable expenses (including, without limitation,
court costs and reasonable attorneys' and paralegals' fees and expenses) of, or
incident to, the enforcement of any of the provisions hereof. The Administrative
Agent agrees to distribute any proceeds of the sale of the Pledged Collateral in
accordance with the Credit Agreement and the Pledgors shall remain liable for
any deficiency following the sale of the Pledged Collateral.
(b) Unless any of the Pledged Collateral threatens to decline speedily
in value or is or becomes of a type sold on a recognized market, the
Administrative Agent will give the applicable Pledgor reasonable notice of the
time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Pledged Collateral conducted in conformity with reasonable commercial practices
of banks, commercial finance companies, insurance companies or other financial
institutions disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable. Notwithstanding any provision to the
contrary contained herein, each of the Pledgors agrees that any requirements of
reasonable notice shall be met if such notice is received by such Pledgor as
provided in Section 27 below at least ten (10) Business Days before the time of
the sale or disposition. Any other requirement of notice, demand or
advertisement for sale is waived, to the extent permitted by law.
(c) In view of the fact that federal and state securities laws may
impose certain restrictions on the method by which a sale of the Pledged
Collateral may be effected after an Event of Default, each of the Pledgors
agrees that after the occurrence and during the continuation of an Event of
Default, the Administrative Agent may, from time to time, attempt to sell all or
any part of the Pledged Collateral by means of a private placement restricting
the bidders and prospective purchasers to those who are qualified and will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, the Administrative Agent may solicit offers to buy
the Pledged Collateral, or any part of it, from a limited number of investors
deemed by the Administrative Agent, in its reasonable judgment, to be
financially responsible parties who might be interested in purchasing the
Pledged Collateral. If the Administrative Agent solicits such offers from not
less than four (4) such investors, then the acceptance by the Administrative
Agent of the highest offer obtained therefrom shall be deemed to be a
commercially reasonable method of disposing of such Pledged Collateral;
provided, however, that this Section does not impose a requirement that the
Administrative Agent solicit offers from four or more investors in order for the
sale to be commercially reasonable.
(d) Each of the Pledgors agrees to the maximum extent permitted by
applicable law that following the occurrence and during the continuance of an
Event of Default it will not at any time plead, claim or take the benefit of any
appraisal, valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement of this
Agreement, or the absolute sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder, and
such Pledgor waives the benefit of all such laws to the extent it lawfully may
do so. Each of the Pledgors agrees that it will not interfere with any right,
power and remedy of Administrative Agent provided for in this Agreement or now
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or hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by Administrative Agent of any one or more
of such rights, powers or remedies. No failure or delay on the part of
Administrative Agent to exercise any such right, power or remedy and no notice
or demand which may be given to or made upon any Pledgor by the Administrative
Agent with respect to any such remedies shall operate as a waiver thereof, or
limit or impair the Administrative Agent's right to take any action or to
exercise any power or remedy hereunder, without notice or demand, or prejudice
its rights as against such Pledgor in any respect.
(e) Each of the Pledgors further agrees that a breach of any of the
covenants contained in this Section 12 will cause irreparable injury to the
Administrative Agent, that the Administrative Agent shall have no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 12 shall be specifically
enforceable against such Pledgor, and such Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that the Obligations are not then due and payable
in accordance with the agreements and instruments governing and evidencing such
obligations.
13. Security Interest Absolute. All rights of the
Administrative Agent and security interests hereunder, and all obligations of
each of the Pledgors hereunder, shall be absolute and unconditional irrespective
of:
(i) Any lack of validity or enforceability of the Credit
Agreement, the Loan Documents, 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, all or any part of the Liabilities, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement or the other Loan Documents;
(iii) Any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any part of the Liabilities;
(iv) the insolvency of any Pledgor; or
(v) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, such Pledgor in respect of the
Liabilities or of this Agreement.
14. Administrative Agent Appointed Attorney-in-Fact. Each of
the Pledgors hereby appoints the Administrative Agent its attorney-in-fact, with
full authority, in the name of such Pledgor or otherwise, after the occurrence
and during the continuation of an Event of Default, from time to time in the
Administrative Agent's sole discretion, to take any action and to execute any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, to
receive, endorse and collect all instruments made payable to such Pledgor
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representing any dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same and to arrange for the transfer of all or any part of the Pledged
Collateral on the books of the issuers of the Pledged Stock to the name of the
Administrative Agent or the Administrative Agent's nominee.
15. Waivers. Each of the Pledgors waives to the fullest extent
permitted by applicable laws presentment and demand for payment of any of the
Liabilities, protest and notice of dishonor or Event of Default with respect to
any of the Liabilities and all other notices to which such Pledgor might
otherwise be entitled except as otherwise expressly provided herein or in the
Credit Agreement.
16. Term. This Agreement shall remain in full force and effect
until the final payment in full, in cash, of the Liabilities, the Commitment
Termination Date has occurred and the Credit Agreement has terminated pursuant
to its terms. Upon the termination of this Agreement as provided above (other
than as a result of the sale of the Pledged Collateral), the Administrative
Agent will release the security interest created hereunder and, if it then has
possession of any Pledged Stock, notes or instruments pledged hereunder, will
deliver such Pledged Stock, notes and instruments previously delivered to it and
the Powers to the applicable Pledgor.
17. Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against any Pledgor or any Pledged Entity for liquidation or reorganization,
should any Pledgor or any Pledged Entity become insolvent or make an assignment
for the benefit of creditors or should a receiver or trustee be appointed for
all or any significant part of a Pledgor's or a Pledged Entity's assets, and
shall continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
18. Definitions. The singular shall include the plural and
vice versa and any gender shall include any other gender as the context may
require.
19. Binding Effect; Successors and Assigns. This Agreement
shall be binding upon each of the Pledgors and its successors and assigns, and
shall inure to the benefit of the Administrative Agent, the Lenders and the
other Holders, and their respective successors and assigns. Nothing set forth
herein or in any other Loan Document is intended or shall be construed to give
any other Person any right, remedy or claim under, to or in respect of this
Agreement, the Credit Agreement or any other Loan Document or any Collateral. A
Pledgor's successors shall include, without limitation, a receiver, trustee or
debtor-in-possession of or for such Pledgor.
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20. Governing Law. This Agreement has been executed and
delivered by the parties hereto in New York, New York. Any dispute between the
Administrative Agent and any Pledgor arising out of or related to the
relationship established between them in connection with this Agreement, and
whether arising in contract, tort, equity, or otherwise, shall be resolved in
accordance with the laws of the State of New York.
21. Consent to Jurisdiction; and Serve of Process. Each of the
Pledgors agrees that the terms of Section 13.17 of the Credit Agreement with
respect to consent to jurisdiction and service of process shall apply equally to
this Agreement. The Administrative Agent shall have the right to proceed against
any Pledgor or its personal property in a court in any location to enable the
Administrative Agent to obtain personal jurisdiction over such Pledgor, to
realize on the Pledged Collateral or any other security for the Liabilities or
to enforce a judgment or other court order entered in favor of the
Administrative Agent.
22. Waiver of Jury Trial. Each of the Pledgors and the
Administrative Agent waives any right to trial by jury in any dispute, whether
sounding in contract, tort, or otherwise, between the Administrative Agent and
such Pledgor arising out of or related to the transactions contemplated by this
Agreement or any other instrument, document or agreement executed or delivered
in connection herewith. Either the Pledgors or the Administrative Agent may file
an original counterpart or a copy of this Agreement with any court as written
evidence of the consent of the parties hereto to the waiver of their right to
trial by jury.
23. Advice of Counsel. Each of the Pledgors represents and
warrants to the Administrative Agent, the Lenders and the other Holders that it
has discussed this Agreement and, specifically, the provisions of Sections 20
through 22 hereof, with the Pledgors' lawyers.
24. Severability. If any provision of this Agreement is held
to be prohibited or unenforceable in any jurisdiction the substantive laws of
which are held to be applicable hereto, such prohibition or unenforceability
shall not affect the validity or enforceability of the remaining provisions
hereof and shall not invalidate or render unenforceable such provision in any
other jurisdiction.
25. Further Assurances. Each of the Pledgors agrees that at
any time and from time to time, at the expense of such Pledgor, such Pledgor
will promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that the
Administrative Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any of the Pledged Collateral.
26. The Administrative Agent's Duty of Care. The
Administrative Agent shall not be liable for any acts, omissions, errors of
judgment or mistakes of fact or law including, without limitation, acts,
omissions, errors or mistakes with respect to the Pledged Collateral, except for
those arising out of or in connection with the Administrative Agent's (i) gross
negligence or willful misconduct, or (ii) failure to use reasonable care with
respect to the safe custody of the Pledged Collateral in the Administrative
Agent's possession. Without limiting the generality of the foregoing, the
Administrative Agent shall be under no obligation to take any steps necessary to
12
preserve rights in the Pledged Collateral against any other parties but may do
so at its option. All expenses incurred in connection therewith shall be for the
sole account of the Pledgors, and shall constitute part of the Liabilities
secured hereby.
27. Notices. Any notice, demand, request or any other
communication required or desired to be served, given or delivered hereunder
shall be in writing and shall be served, given or delivered as provided in
Section 13.08 of the Credit Agreement.
28. Indemnity and Expenses. Each of the Pledgors agrees
jointly and severally, upon demand, to pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Pledged Collateral, (iii) the
exercise or enforcement of any of the rights of the Administrative Agent
hereunder or (iv) the failure by such Pledgor to perform or observe any of the
provisions hereof.
29. Amendments, Waivers and Consents. None of the terms or
provisions of this Agreement may be waived, altered, modified or amended, and no
consent to any departure by any Pledgor herefrom shall be effective, except by
or pursuant to an instrument in writing which (i) is duly executed by the
Pledgors and the Administrative Agent and (ii) complies with the requirements of
the Credit Agreement. Any such waiver shall be valid only to the extent set
forth therein. A waiver by the Administrative Agent of any right or remedy under
this Agreement on any one occasion shall not be construed as a waiver of any
right or remedy which the Administrative Agent would otherwise have on any
future occasion. No failure to exercise or delay in exercising any right, power
or privilege under this Agreement on the part of the Administrative Agent shall
operate as a waiver thereof; and no single or partial exercise of any right,
power or privilege under this Agreement shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
30. Section Headings: Terms. The section headings herein are
for convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof. Unless otherwise defined herein
or in the Credit Agreement, terms used in Article 8 and Article 9 of the UCC are
used herein as therein defined.
31. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall together constitute one and the same agreement.
32. Merger. This Agreement, taken together with all the other
Loan Documents, embodies the entire agreement and understanding, between the
Pledgors and the Administrative Agent or any Lender and supersedes all prior
agreements and understandings, written and oral, relating to the subject matter
hereof.
33. Termination; Release of Collateral. Notwithstanding
anything in this Agreement to the contrary, each of the Pledgors may, to the
extent permitted by Section 9.02 of the Credit Agreement, sell, assign, transfer
or otherwise dispose of any Pledged Collateral. In addition, the Pledged
13
Collateral shall be subject to release in accordance with Section 12.09(c) of
the Credit Agreement (such Pledged Collateral and the Pledged Collateral
referred to in the immediately preceding sentence being the "Released
Collateral"). The Liens under this Agreement shall terminate with respect to the
Released Collateral upon such sale, transfer, assignment, disposition or release
and upon the request of the applicable Pledgor, the Administrative Agent shall
execute and deliver such instrument or document as may be necessary to release
the Liens granted hereunder; provided, however, that (i) the Administrative
Agent shall not be required to execute any such documents on terms which, in the
Administrative Agent's opinion, would expose the Administrative Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Liabilities or any Liens on
(or obligations of the Pledgors in respect of) all interests retained by any
Pledgor, including without limitation, the proceeds of any sale, all of which
shall continue to constitute part of the Pledged Collateral.
[remainder of page intentionally left blank]
14
IN WITNESS WHEREOF, each of the Pledgors and the
Administrative Agent have executed this Agreement as of the date set forth
above.
BARNEY'S, INC.
BARNEYS AMERICA, INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
XXXXX ALL-AMERICAN SPORTSWEAR
CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE
CORP.
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Acknowledged and agreed to
as of the date first written above.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
ACKNOWLEDGMENT
Each of the undersigned hereby acknowledges receipt of a copy
of the foregoing Pledge Agreement, agrees promptly to note on its books the
security interests granted under such Pledge Agreement, and waives any rights or
requirement at any time hereafter to receive a copy of such Pledge Agreement in
connection with the registration of any Pledged Collateral in the name of the
Administrative Agent or its nominee or the exercise of voting rights by the
Administrative Agent.
BARNEYS AMERICA, INC.
BARNEYS AMERICA (CHICAGO) LEASE CORP.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
XXXXX ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
