PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of May __, 1998, made by Carpet
Barn Holdings, Inc., a Delaware corporation ("Pledgor"), to Fleet Capital
Corporation ("Fleet") as Agent (as hereafter defined).
Pledgor has executed and delivered to Agent a Guaranty dated
as of May __, 1998 (as amended, modified, restated or supplemented from time
to time, the "Guaranty") pursuant to which Pledgor guaranteed to Agent the
payment and performance of all of the obligations and indebtedness of Carpet
Barn, Inc. ("Borrower") to Lenders (as defined below) and Agent under a Loan
and Security Agreement dated as of May __, 1998 among Borrower, Fleet, the
various other financial institutions named therein or which hereafter became a
party thereto (Fleet and such other financial institutions, collectively,
"Lenders"), and Fleet as administrative and collateral agent for Lenders (in
such capacity "Agent") (as amended, modified, restated or supplemented from
time to time, the "Loan Agreement").
In order to induce Lenders and Agent to provide financial
accommodations to Borrower and to secure Pledgor's obligations to Lenders and
Agent under the Guaranty, Pledgor has agreed to pledge and grant a security
interest to Agent for the ratable benefit of Lenders in the Pledged Collateral
(as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms
Unless otherwise defined herein, terms defined in the
Guaranty shall have such defined meanings when used herein.
SECTION 2. Pledge
Pledgor hereby pledges, assigns, hypothecates, transfers and
grants a security interest to Agent for the ratable benefit of Lenders in all
of the following collectively, (the "Pledged Collateral"):
(a) the shares of stock set forth on Schedule A annexed
hereto and expressly made a part hereof (the "Pledged Stock"), the
certificates representing the Pledged Stock and all dividends, cash,
instruments and other property or proceeds 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 shares of stock of any issuer of the
Pledged Stock (the "Issuer") from time to time acquired by the Pledgor in any
manner, including, without limitation, stock dividends or a distribution in
connection with any increase or reduction of capital, reclassification,
merger, consolidation, sale of assets, combination of shares, stock split,
spin-off or split-off (which
shares shall be deemed to be part of the Pledged Collateral), and the
certificates representing such additional shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all of such shares; and
(c) all options and rights, whether as an addition to, in
substitution of or in exchange for any shares of the Pledged Stock and all
dividends, cash and instruments.
SECTION 3. Indebtedness Secured
This pledge is made to secure and the Pledged Collateral is
security for the payment of (a) all the obligations or liabilities of Pledgor
to Agent under the Guaranty and (b) any and all other indebtedness,
obligations and liabilities of Pledgor and/or Borrower to Agent whether now
existing or hereafter arising, direct or indirect, liquidated or unliquidated,
absolute or contingent, due or not due and whether under, pursuant to or
evidenced by a note, agreement, guaranty, other instrument or otherwise ((a)
and (b) collectively, the "Indebtedness").
SECTION 4. Delivery of Pledged Collateral
All certificates representing or evidencing the Pledged
Stock shall be delivered to and held by or on behalf of Agent pursuant hereto
and shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Agent. Pledgor
hereby authorizes the Issuer upon demand by Agent to deliver any certificates,
instruments or other distributions issued in connection with the Pledged
Collateral directly to Agent, in each case to be held by Agent, subject to the
terms hereof. Agent shall have the right, at any time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of
Agent or any of its nominees any or all of the Pledged Stock. In addition,
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Stock for certificates or instruments of
smaller or larger denominations.
SECTION 5. Representations and Warranties
Pledgor represents and warrants to Agent and Lenders that:
(a) Pledgor has the requisite power and authority to enter
into this Agreement, to pledge the Pledged Collateral for the purposes
described herein and to carry out the transactions contemplated by this
Agreement.
(b) The execution, delivery and performance by Pledgor of
this Agreement has been duly and properly authorized and does not and will not
result in any violation of any agreement, indenture or other instrument,
license, judgment, decree, order, law, statute, ordinance or other
governmental rule or regulation applicable to Pledgor.
(c) This Agreement constitutes a legal, valid and binding
obligation of Pledgor enforceable in accordance with its terms.
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(d) Pledgor is the direct and beneficial owner of each share
of the Pledged Stock.
(e) All of the shares of the Pledged Stock have been duly
authorized, validly issued and are fully paid and nonassessable.
(f) Upon delivery of the Pledged Stock to Agent or an agent
for Agent, this Agreement creates and grants a valid first lien on and
perfected security interest in the Pledged Collateral and the proceeds
thereof, subject to no prior security interest, lien, charge or encumbrance,
or to any agreement purporting to grant to any third party a security interest
in the property or assets of Pledgor which would include the Pledged
Collateral.
(g) There are no restrictions on transfer of the Pledged
Stock contained in the Certificate of Incorporation or by-laws of the Issuer
or otherwise (except under applicable securities law) which have not otherwise
been enforceably and legally waived by the necessary parties.
(h) None of the Pledged Stock has been issued or transferred
in violation of the securities registration, securities disclosure or similar
laws of any jurisdiction to which such issuance or transfer may be subject.
(i) No consent, approval, authorization or other order of
any person, firm, corporation or other entity ("Person") and no consent,
authorization, approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required by the Pledgor
either (i) for the pledge of the Pledged Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement or (ii) for
the exercise by the 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.
(j) No notification of the pledge evidenced hereby to any
Person is required.
(k) As of the date hereof, there are no existing options,
warrants, calls or commitments of any such character whatsoever relating to
any Pledged Stock and no indebtedness or other security convertible into any
Pledged Stock.
(l) The Pledged Stock constitutes one hundred percent (100%)
of the issued and outstanding shares of capital stock of the Issuers thereof
set forth on Schedule A annexed hereto.
The representations and warranties set forth in this Section
5 (other than those contained in Section (k)) shall survive the execution and
delivery of this Agreement.
SECTION 6. Covenants
Pledgor covenants that, until the Indebtedness shall be
satisfied in full and the Guaranty is irrevocably terminated:
(a) Pledgor will not sell, assign, transfer, convey, or
otherwise dispose of its
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rights in or to the Pledged Collateral or any interest therein; nor will
Pledgor create, incur or permit to exist any pledge, mortgage, lien, charge,
encumbrance or any security interest whatsoever with respect to any of the
Pledged Collateral or the proceeds thereof other than that created hereby.
(b) Pledgor will, at its expense, defend Agent's right,
title and security interest in and to the Pledged Collateral against the
claims of any Person.
(c) Pledgor shall at any time, and from time to time, upon
the written request of Agent, execute and deliver such further documents and
do such further acts and things as Agent may reasonably request in order to
effect the purposes of this Agreement including, but without limitation,
delivering to Agent upon the occurrence of an Event of Default irrevocable
proxies in respect of the Pledged Collateral in form satisfactory to Agent.
Until receipt thereof, this Agreement shall constitute Pledgor's proxy to
Agent or its nominee to vote all shares of Pledged Collateral then registered
in Pledgor's name in accordance with the terms hereof.
(d) Pledgor will not consent to or approve the issuance of
(i) any additional shares of any class of capital stock of the Issuer; (ii)
any securities convertible either voluntarily by the holder thereof or
automatically upon the occurrence or nonoccurrence of any event or condition
into, or any securities exchangeable for, any such shares; or (iii) any
warrants, options, contracts or other commitments entitling any person to
purchase or otherwise acquire any such shares.
(e) Pledgor will not create, incur, assume or suffer to
exist any mortgage, pledge, lien, charge or other encumbrance of any kind
(including the charge on property purchased under conditional sales or other
title retention agreements) upon or any security interest in, any property or
assets, whether now owned or hereafter acquired, except for liens incidental
to the conduct of Pledgor's business or the ownership of its assets or
properties not incurred in connection with the borrowing of money or the
acquisition of any asset, and which in the aggregate do not materially detract
from Pledgor's operations, property or financial condition.
(f) Pledgor will not convey, sell, lease, transfer or
otherwise dispose of in one or a series of related transactions, all or any
substantial part of its property, business or assets except for a merger of
Pledgor with and into Nations Flooring, Inc., a Delaware corporation.
SECTION 7. Voting Rights and Dividends
In addition to Agent's rights and remedies set forth in
Section 9 hereof, in case an Event of Default shall have occurred, been
declared by Agent and be continuing, Agent shall (i) be entitled to vote the
Pledged Collateral (ii) be entitled to give consents, waivers and
ratifications in respect of the Pledged Collateral (Pledgor hereby irrevocably
constituting and appointing Agent, with full power of substitution, the proxy
and attorney-in-fact of Pledgor for such purposes) and (iii) be entitled to
collect and receive for its own use cash dividends paid on the Pledged
Collateral. Pledgor shall not be permitted to exercise or refrain from
exercising any voting rights or other powers if, in the reasonable judgment of
Agent, such action would have a material adverse effect on the value of the
Pledged Collateral or any part thereof; and, provided, further, that Pledgor
shall give at least five (5) days' written notice of the manner in which
Pledgor intends to exercise, or the reasons for refraining from exercising,
any voting rights or other powers other than with respect to
4
any election of directors and voting with respect to any incidental matters.
All dividends and all other distributions in respect of any of the Pledged
Collateral, paid or made after an Event of Default has occurred and is
continuing, shall be delivered to Agent to hold as Pledged Collateral and
shall, if received by the Pledgor, be received in trust for the benefit of
Agent, be segregated from the other property or funds of the Pledgor, and be
forthwith delivered to Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).
SECTION 8. Event of Default
An Event of Default shall be deemed to have occurred and may
be declared by Agent upon the happening of any of the following events:
(a) Any default shall occur under the Guaranty;
(b) Pledgor shall default in the performance of any of its
obligations under any agreement between Pledgor and Agent, including, without
limitation, this Agreement;
(c) Any representation, warranty, statement or covenant made
or furnished to Agent by or on behalf of Pledgor proves to have been false in
any material respect when made or furnished or is breached, violated or not
complied with; or
(d) Pledgor shall (i) apply for, consent to, or suffer to
exist the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or other fiduciary of itself or of all or a
substantial part of its property, (ii) make a general assignment for the
benefit of creditors, (iii) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a
bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the
purpose of effecting any of the foregoing.
SECTION 9. Remedies
In case an Event of Default shall have occurred and be
declared by Agent, Agent may:
(a) Transfer any or all of the Pledged Collateral into
its name, or into the name of its nominee or nominees;
(b) Exercise all corporate rights with respect to the
Pledged Collateral including, without limitation, all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining
to any shares of the Pledged Collateral as if it were the absolute owner
thereof, including, but without limitation, the right to exchange, at its
discretion, any or all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of the
Issuer thereof, or upon the exercise by the Issuer of any right, privilege or
option pertaining to any of the Pledged Collateral, and, in connection
therewith, to deposit and deliver any and all of the Pledged Collateral with
any committee, depository, transfer agent, registrar or other designated
5
agent upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it;
(c) Subject to any requirement of applicable law, sell,
assign and deliver the whole or, from time to time, any part of the Pledged
Collateral at the time held by Agent, at any private sale or at public
auction, with or without demand, advertisement or notice of the time or place
of sale or adjournment thereof or otherwise (all of which are hereby waived,
except such notice as is required by applicable law and cannot be waived), for
cash or credit or for other property for immediate or future delivery, and for
such price or prices and on such terms as Agent in its sole discretion may
determine, or as may be required by applicable law.
Pledgor hereby waives and releases any and all right or
equity of redemption, whether before or after sale hereunder. At any such
sale, unless prohibited by applicable law, Agent may bid for and purchase the
whole or any part of the Pledged Collateral so sold free from any such right
or equity of redemption. All moneys received by Agent hereunder whether upon
sale of the Pledged Collateral or any part thereof or otherwise shall be held
by Agent and applied by it as provided in Section 12 hereof. No failure or
delay on the part of Agent in exercising any rights hereunder shall operate as
a waiver of any such rights nor shall any single or partial exercise of any
such rights preclude any other or future exercise thereof or the exercise of
any other rights hereunder. Agent shall have no duty as to the collection or
protection of the Pledged Collateral or any income thereon nor any duty as to
preservation of any rights pertaining thereto, except to apply the funds in
accordance with the requirements of Section 12 hereof. Agent may exercise its
rights with respect to property held hereunder without resort to other
security for or sources of reimbursement for the Indebtedness. In addition to
the foregoing, Agent shall have all of the rights, remedies and privileges of
a secured party under the Uniform Commercial Code of the State of New York
regardless of the jurisdiction in which enforcement hereof is sought.
SECTION 10. Intentionally Omitted.
SECTION 11. Private Sale
Notwithstanding anything contained in Section 10, Pledgor
recognizes that Agent may be unable to effect (or to do so only after delay
which would adversely affect the value that might be realized from the Pledged
Collateral) a public sale of all or part of the Pledged Collateral by reason
of certain prohibitions contained in the Securities Act, and may be compelled
to resort to one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such Pledged
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor agrees that any such private sale may
be at prices and on terms less favorable to the seller than if sold at public
sales and that any private sales on such terms shall be deemed to have been
made in a commercially reasonable manner if such sales have otherwise been
conducted in a commercial reasonable manner. Pledgor agrees that Agent has no
obligation to delay sale of any Pledged Collateral for the period of time
necessary to permit the Issuer to register the Pledged Collateral for public
sale under the Securities Act.
6
SECTION 12. Proceeds of Sale
The proceeds of any collection, recovery, receipt,
appropriation, realization or sale of the Pledged Collateral shall be applied
by Agent as follows:
(a) First, to the payment of all costs, expenses and charges
of Agent, as such, or the reimbursement of Agent for the prior payment of such
costs, expenses and charges incurred in connection with the care and
safekeeping of any of the Pledged Collateral (including, without limitation,
the expenses of any sale or other proceeding, the expenses of any taking,
reasonable attorneys' fees and expenses, court costs, any other expenses
incurred or expenditures or advances made by Agent in the protection,
enforcement or exercise of its rights, powers or remedies hereunder) with
interest on any such reimbursement at the rate prescribed in the Loan
Agreement as the applicable Default Rate for Base Rate Loans from the date of
payment.
(b) Second, to the payment of the Indebtedness, in whole or
in part, in such order as Agent may elect, whether such Indebtedness is then
due or not due.
(c) Third, to such Persons as required by applicable law
including, without limitation, Section 9-504(1)(c) of the Uniform Commercial
Code.
(d) Fourth, to the extent of any surplus thereafter
remaining, to Pledgor or as a court of competent jurisdiction may direct.
In the event that the proceeds of any collection, recovery,
receipt, appropriation, realization or sale are insufficient to satisfy the
Indebtedness, Pledgor shall be liable for the deficiency together with
interest thereon at the rate prescribed in the Loan Agreement as the
applicable Default Rate for Base Rate Loans plus the reasonable fees of any
attorneys employed by Agent to collect such deficiency.
Agent, in its sole and absolute discretion, with or without
notice to Pledgor, may deposit any proceeds of any collection, recovery,
receipt, appropriation or sale of the Pledged Collateral in a non-interest
bearing cash collateral deposit account to be maintained as security for the
Indebtedness.
SECTION 13. Information
Pledgor will promptly give or cause to be given written
notice to Agent of any notices or other documents received by it with respect
to Pledged Collateral registered in the name of Pledgor.
SECTION 14. Termination
This Agreement shall terminate and Pledgor shall be entitled
to the return, at Pledgor's expense, of such of the Pledged Collateral as has
not theretofore been sold or otherwise applied pursuant to this Agreement,
together with any moneys at any time held by Agent, upon payment in full of
the Indebtedness and irrevocable termination of the Guaranty.
7
SECTION 15. Concerning Agent
The recitals of fact herein shall be taken as statements of
Pledgor for which Agent assumes no responsibility. Agent makes no
representation to anyone as to the value of the Pledged Collateral or any part
thereof or as to the validity or adequacy of the security afforded or intended
to be afforded thereby or as to the validity of this Agreement. Agent shall be
protected in relying upon any notice, consent, request or other paper or
document believed by it to be genuine and correct and to have been signed by a
proper person. The permissive rights of Agent hereunder shall not be construed
as duties of Agent. Agent shall be under no obligation to take any action
toward the enforcement of this Agreement or rights or remedies in respect of
any of the Pledged Collateral. Agent shall not be personally liable for any
action taken or omitted by it in good faith and reasonably believed by it to
be within the power or discretion conferred upon it by this Agreement.
SECTION 16. Notices
Any notice or request hereunder may be given to Pledgor or
to Agent at their respective addresses set forth below or at such other
address as may hereafter be specified in a notice designated as a notice of
change of address under this Section. Any notice or request hereunder shall be
given by (a) hand delivery, (b) registered or certified mail, return receipt
requested, (c) telex or telegram, subsequently confirmed by registered or
certified mail, or (d) telefax to the number set out below (or such other
number as may hereafter be specified in a notice designated as a notice of
change of address) with telephone communication to a duly authorized officer
of the recipient confirming its receipt as subsequently confirmed by
registered or certified mail. Any notice or other communication required or
permitted pursuant to this Agreement shall be deemed given (a) when personally
delivered to any officer of the party to whom it is addressed, (b) on the
earlier of actual receipt thereof or three (3) days following posting thereof
by certified or registered mail, postage prepaid, or (c) upon actual receipt
thereof when sent by a recognized overnight delivery service or (d) upon
actual receipt thereof when sent by telecopier to the number set forth below
with telephone communication confirming receipt and subsequently confirmed by
registered, certified or overnight mail to the address set forth below, in
each case addressed to each party at its address set forth below or at such
other address as has been furnished in writing by a party to the other by like
notice:
(A) If to Agent, at: Fleet Capital Corporation
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Northeast Loan
Administrator
Telecopier: (000) 000-0000
with a copy to: Xxxx & Hessen LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
8
(B) If to Pledgor, at: Carpet Barn, Inc.
c/x Xxxxxx Investments, Inc.
000 Xxxxxx Xxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxx, P.C.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
SECTION 17. Governing Law.
This Agreement and all rights and obligations hereunder
shall be governed by and construed in accordance with the laws of the State of
New York applied to contracts to be performed wholly within the State of New
York.
SECTION 18 Waivers.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE; AND EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH
ACTIONS OR PROCEEDINGS SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.
SECTION 19. Litigation.
PLEDGOR EXPRESSLY CONSENTS TO THE JURISDICTION AND VENUE OF
THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR ALL
PURPOSES IN CONNECTION WITH THIS AGREEMENT. ANY JUDICIAL PROCEEDING BY PLEDGOR
AGAINST AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY ANY MATTER OR
CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT
SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF
NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
9
DISTRICT OF NEW YORK. PLEDGOR FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR
OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION
OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE
THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE
SERVED INSIDE OR OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF
NEW YORK BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
PERSONAL SERVICE PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN
SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS.
PLEDGOR WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED HEREON AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM NON CONVENIENS.
SECTION 20. No Waiver; Cumulative Remedies.
No failure on the part of Agent or any Lender to exercise,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof nor shall any single or partial exercise of any such
right, power or remedy by Agent or any Lender preclude any other or further
exercise thereof or the exercise of any right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided
by law.
SECTION 21. Severability.
In case any security interest or other right of Agent and
Lenders shall be held to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other security
interest or other right, privilege or power granted under this Agreement.
SECTION 22. Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which when taken together
shall constitute one and the same instrument.
SECTION 23. Miscellaneous
Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing,
signed by Agent and Pledgor. The provisions of this Agreement shall be binding
upon the successors and assigns of Pledgor. The term "Agent", as used herein,
shall include any successor or assign of Agent at the time entitled to the
pledged interest in the Pledged Collateral. The headings in this Agreement are
for purposes of reference only and shall not limit or define the meaning
hereof.
10
SECTION 24. Captions
The captions at various places in this Agreement are
intended for convenience only and do not constitute and shall not be
interpreted as part of this Agreement.
SECTION 25. Recapture
Anything in this Agreement to the contrary notwithstanding,
if Agent receives any payment or payments on account of the Indebtedness,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver, or any other party under the United States
Bankruptcy Code, as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or affecting the
enforcement of creditors' rights generally, common law or equitable doctrine,
then to the extent of any sum not finally retained by Agent, Pledgor's
obligations to Agent shall be reinstated and this Agreement shall remain in
full force and effect (or be reinstated) until payment shall have been made to
Agent, which payment shall be due on demand.
IN WITNESS WHEREOF, Pledgor has caused this Agreement to be
duly executed as of the 19 day of May, 1998.
CARPET BARN HOLDINGS, INC.,
as Pledgor
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
FLEET CAPTIAL CORPORATION, as Agent
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title:
00
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
On the 19 day of May, 1998, before me personally came
Xxxxxx X. Xxxxxx, to me known, who being by me duly sworn, did depose and say
that he is the President of Carpet Barn Holdings, Inc., the corporation
described in and which executed the above instrument; and that he signed his
name thereto by like order of the board of directors of said corporation.
_______________________________
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 19 day of May, 1998, before me personally came
_________________, to me known, who being by me duly sworn, did depose and say
that he is the _____________ of Fleet Capital Corporation, the corporation
described in and which executed the above instrument; and that he signed his
name thereto by like order of the board of directors of said corporation.
_______________________________
Notary Public
12
SCHEDULE A
TO PLEDGE AGREEMENT DATED AS OF MAY 19, 1998 BETWEEN CARPET
BARN HOLDINGS, INC. AND FLEET CAPITAL CORPORATION, AS AGENT.
PLEDGED STOCK
Class of Stock Certificate Number of
Issuer Stock Number Par Value Shares
------ ----- ------ --------- ------
Carpet Barn, Inc. f/k/a Carpet Barn Common 1 $.01 100
Acquisition Corp.
