Exhibit 10.3
FORM OF
SECURITIES COLLATERAL PLEDGE AGREEMENT
SECURITIES COLLATERAL PLEDGE AGREEMENT (this "AGREEMENT") dated as of May
22, 2002 by and between _______________________(1) having its chief executive
office at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (the "PLEDGOR"), and FLEET
NATIONAL BANK, a national banking association having an office located at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the "ADMINISTRATIVE AGENT"), as
administrative agent for itself and each other Bank (as defined below) under the
terms of that certain Revolving Credit Agreement dated as of May 22, 2002 (as it
may be amended from time to time, the "LOAN AGREEMENT") by and among the Barns &
Noble, Inc. (the "Borrower"), the lending institutions that are party thereto
(collectively, the "BANKS"), and the Administrative Agent.
WHEREAS, the Borrower has requested that the Administrative Agent and
the Banks to enter into the Loan Agreement;
WHEREAS, the Borrower is the sole stockholder of the Pledgor, and the
Pledgor has guaranteed the Borrower's obligations under the Loan Agreement
pursuant to a subsidiary Guaranty of Even date (the "Guaranty");
WHEREAS, the Pledgor is the direct legal and beneficial owner of the
percentage interest set forth on Schedule 1 of the issued and outstanding shares
of capital stock and membership interests, as the case may be, of each of the
entities listed on Schedule 1 (each, a "SCHEDULED SUBSIDIARY" and collectively,
the "SCHEDULED SUBSIDIARIES"); and
WHEREAS, it is a condition precedent to the Banks' agreement to enter into
the Loan Agreement and extend credit to the Pledgor thereunder that the Pledgor
execute and deliver this Agreement and pledge the Securities Collateral (as
defined below) to the Administrative Agent on the terms and conditions described
herein.
NOW, THEREFORE, in order to induce the Banks to enter into the Loan
Agreement and extend credit to the Borrower thereunder, and in consideration
thereof, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1. DEFINITIONS; INTERPRETATION.
1.01 Generally. Capitalized terms used but not defined herein or in any
certificate, report or other document delivered pursuant hereto shall have the
meanings ascribed to such terms in the Loan Agreement. Except as otherwise
defined herein, terms defined in the NY UCC (as defined below) and used herein
shall have the meanings ascribed to such terms in the NY UCC; provided, however,
that if a term is defined in
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(1) See Footnote 2 on signature page.
Article 9 of the NY UCC differently than in another Article thereof, the term
shall have the meaning set forth in Article 9.
1.02 Terms Defined in this Agreement. For purposes of this Agreement, the
following terms have the meanings set forth below:
"ADDITIONAL SECURITIES" shall have the meaning set forth in clause (b) of
Article 2.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the Preamble.
"AGREEMENT" shall have the meaning set forth in the Preamble.
"BANKS" shall have the meaning set forth in the Preamble.
"CASH COLLATERAL" shall have the meaning set forth in Section 3.05(b).
"CASH COLLATERAL ACCOUNT" shall have the meaning set forth in Section
3.05(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"LOAN AGREEMENT" shall have the meaning set forth in the Preamble.
"NY UCC" means the Uniform Commercial Code in effect in the State of New
York, as it may be amended from time to time, provided, that if by reason of
mandatory provisions of law, matters pertaining to the perfection or
non-perfection of the security interest in any Securities Collateral, the effect
of such perfection or non-perfection, or the availability of any remedy
hereunder, is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "NY UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions of
this Agreement relating to the matters so governed.
"PLEDGED SECURITIES" means the Scheduled Securities, any Additional
Securities, and all other Investment Property at any time pledged or required to
be pledged hereunder, including, without limitation, (a) with respect to any
Domestic Subsidiary, securities representing all of the ownership interest in
each such Domestic Subsidiary at any time owned by the Pledgor and (b) with
respect to any Foreign Subsidiary, securities representing not more than 65% of
the total combined voting power of all classes of ownership interest of such
Foreign Subsidiary entitled to vote and not more than 65% of any other
Investment Property of such Foreign Subsidiary, in each case at any time owned
by the Pledgor.
"PLEDGOR" shall have the meaning set forth in the Preamble.
"SCHEDULED SECURITIES" shall have the meaning set forth in clause (a) of
Article 2.
"SCHEDULED SUBSIDIARY(IES)" shall have the meaning set forth in the
Preamble.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES COLLATERAL" shall have the meaning set forth in Article 2.
"TIME DEPOSITS" shall have the meaning set forth in Section 3.05(b).
"UNIFORM COMMERCIAL CODE" means, in reference to any jurisdiction, the
Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may
be amended from time to time.
1.03 Terms Defined in NY UCC. For purposes of this Agreement, the terms
for which definitions are supplied by the NY UCC include, without limitation,
the terms set forth below. Such term and section references are provided for
convenience only, and the omission of any term from the following list shall not
be construed to mean that the NY UCC definition of such omitted term does not
apply.
"CERTIFICATED SECURITY" Section 8-102(a)(4)
"ENTITLEMENT HOLDER" Section 8-102(a)(7)
"ENTITLEMENT ORDER" Section 8-102(a)(8)
"FILING OFFICE" Section 9-102(a)(37)
"FINANCIAL ASSET" Section 8-102(a)(9)
"FINANCING STATEMENT" Section 9-102(a)(39)
"INVESTMENT PROPERTY" Section 9-102(a)(49)
"ISSUER" Section 8-201
"PAYMENT INTANGIBLE" Section 9-102(a)(61)
"PROCEEDS" Section 9-102(a)(64)
"SECURITIES INTERMEDIARY" Section 8-102(a)(14)
"SECURITY" Section 8-102(a)(15)
"SECURITY ENTITLEMENT" Section 8-102(a)(17)
"SUPPORTING OBLIGATION" Section 9-102(a)(77)
"UNCERTIFICATED SECURITY" Section 8-102(a)(18)
1.04 Matters of Interpretation and Construction.
(a) The language of this Agreement, having been negotiated by the
parties hereto, shall not be construed against any party hereto by reason of the
extent to which such party or its counsel participated in the drafting hereof or
by reason of the extent to which any such provision is inconsistent with any
prior draft hereof.
(b) Use of the singular shall be deemed to include the plural and
use of the plural shall be deemed to include the singular. Use of any gender
shall be deemed to include all other genders.
(c) A reference to any law, agreement or other document includes any
amendment or modification to such law, agreement or document.
(d) A reference to any Person includes its successors and
permitted assigns.
(e) Unless the context clearly requires otherwise, reference to a
particular "Article" or "Section" refers to the corresponding article or section
of this Agreement.
(f) Unless the context clearly requires otherwise, use of the word
"including" shall mean "including, without limitation".
ARTICLE 2. GRANT OF SECURITY. As security for the prompt and unconditional
payment and performance of the Obligations, and for the benefit of the
Administrative Agent and the Banks, the Pledgor hereby pledges, collaterally
assigns and transfers to the Administrative Agent, and grants the Administrative
Agent a security interest in, all of the Pledgor's right, title and interest in
and to the following, whether now owned or hereafter acquired, and all Proceeds
thereof (collectively, the "SECURITIES COLLATERAL"):
(a) the Securities owned by the Pledgor on the date hereof as described in
Schedule 1 hereto (the "SCHEDULED SECURITIES"), the certificates representing
the Scheduled Securities, if any, and all distributions or other property
(regardless of form) at any time received, receivable or otherwise distributed
(whether by dividend or distribution, or upon the consolidation, merger,
recapitalization, reclassification or liquidation of the Issuer, or otherwise)
in respect of or in exchange for any or all of the Scheduled Securities, and all
other Financial Assets, Investment Property and monies owned by the Pledgor and
relating thereto;
(b) all additional Securities of any Issuer of the Scheduled Securities
from time to time acquired by the Pledgor in any manner ("ADDITIONAL
SECURITIES"), the certificates representing such Additional Securities, if any,
and all distributions or other property (regardless of form) at any time
received, receivable or otherwise distributed (whether by dividend or
distribution, or upon the consolidation, merger, recapitalization,
reclassification or liquidation of the Issuer, or otherwise) in respect of or in
exchange for any or all of the such Additional Securities, and all other
Financial Assets, Investment Property and monies owned by the Pledgor and
relating thereto, provided, however, that the term "ADDITIONAL SECURITIES" shall
not include Securities issued by a Foreign Subsidiary if the pledge of such
Securities would result in more than 65% of the total combined voting power of
all classes of capital stock of such Foreign Subsidiary entitled to vote, or
more than 65% of any other Investment Property or other Securities of such
Foreign Subsidiary, to be subject to pledge pursuant to this Agreement; and
(c) the Cash Collateral Account and all of the Cash Collateral.
Notwithstanding anything to the contrary stated herein, the term "SECURITIES
COLLATERAL" shall not include income or Proceeds received by the Pledgor to the
extent that the Pledgor is expressly permitted to retain such income or Proceeds
under Article 4.
ARTICLE 3. DELIVERY AND CONTROL; FINANCING STATEMENTS.
3.01 Certificated Securities. With respect to Pledged Securities that are
Certificated Securities, the Pledgor shall deliver to the Administrative Agent
the original certificates representing same accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent, to be held by the
Administrative Agent upon the terms and conditions set forth in this Agreement.
3.02 Uncertificated Securities. With respect to Pledged Securities that
are Uncertificated Securities, the Pledgor shall, pursuant to an agreement in
form and substance reasonably satisfactory to the Administrative Agent, at the
Administrative Agent's option either (i) cause the Issuer to agree to comply
with instructions from the Administrative Agent as to such securities, without
further consent of the Pledgor, or (ii) arrange for the Administrative Agent to
become the registered owner of the Securities.
3.03 Additional Securities. If the Pledgor shall acquire by purchase,
stock dividend or otherwise any Additional Securities at any time or from time
to time after the date hereof, the Pledgor will forthwith notify the
Administrative Agent of such acquisition and shall immediately take such action
with respect to such Additional Securities as is required under Section 3.01 or
3.02, as the case may be. The Pledgor authorizes the Administrative Agent to
attach as Schedule 1 hereto from time to time an updated list of the Pledged
Securities (including the Issuers thereof) then pledged with the Administrative
Agent hereunder.
3.04 Securities Collateral Held By Intermediaries. If any Pledged
Securities, whether Certificated or Uncertificated, or other Securities
Collateral, now held or hereafter acquired by the Pledgor are held by the
Pledgor or its nominee through a Securities Intermediary, the Pledgor shall
immediately notify the Administrative Agent of such fact and, at the request and
option of the Administrative Agent, (a) cause any certificates representing such
Pledged Securities to be delivered to the Administrative Agent in accordance
with Section 3.01, or (b) pursuant to an agreement in form and substance
reasonably satisfactory to the Administrative Agent, either (i) cause such
Securities Intermediary to agree to comply with Entitlement Orders or other
instructions from the Administrative Agent to such Securities Intermediary as to
such Pledged Securities or other Securities Collateral without further consent
of the Pledgor or such nominee, or (ii) arrange for the Administrative Agent to
become the Entitlement Holder with respect to such Pledged Securities or other
Securities Collateral, with the Pledgor being permitted, only with the consent
of the Administrative Agent, to exercise rights to withdraw or otherwise deal
with such Pledged Securities or other Securities Collateral.
3.05 Dividends, Distributions, Etc. Upon the occurrence and during the
continuance of an Event of Default:
(a) all sums of money and property paid or distributed in respect of the
Pledged Securities, whether as a dividend or upon a liquidation, dissolution,
recapitalization or reclassification of the Issuer, or otherwise, that are
received by the Pledgor shall be paid over and delivered to the Administrative
Agent and held or applied, as the case may be, as provided in subsection (b)
below. The Pledgor agrees to forthwith endorse, assign and deliver such items to
the Administrative Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Administrative Agent may from time to
time reasonably specify.
(b) all sums of cash or cash equivalents that are delivered to the
Administrative Agent pursuant to this Section 3.05 shall be applied to pay the
Obligations, or if Letters of Credit are the only outstanding Obligations, shall
be deposited into an interest bearing account with the Administrative Agent (the
"CASH COLLATERAL ACCOUNT"). All other items of property shall be held by the
Administrative Agent as security for the payment and performance in full of the
Obligations. Some or all of the funds from time to time in the Cash Collateral
Account may be invested in time deposits, including, without limitation,
certificates of deposit issued by the Administrative Agent (such certificates of
deposit or other time deposits being hereinafter referred to, collectively, as
"TIME DEPOSITS"), that are satisfactory to the Administrative Agent after
consultation with the Pledgor, provided that, in each such case, arrangements
reasonably satisfactory to the Administrative Agent are made and are in place to
perfect and to ensure the first priority status of the security interest of the
Administrative Agent therein. Interest earned on the Cash Collateral Account and
on the Time Deposits, and the principal of the Time Deposits at maturity that is
not invested in new Time Deposits, shall be deposited in the Cash Collateral
Account. The Cash Collateral Account, all sums from time to time standing to the
credit of the Cash Collateral Account, all Time Deposits, all instruments or
other writings evidencing Time Deposits, and all Proceeds of any of the
foregoing, are hereinafter referred to as the "CASH COLLATERAL".
(c) except as otherwise expressly provided in Article 12, the Pledgor
shall have no right to withdraw sums from the Cash Collateral Account, to
receive any of the Cash Collateral or to require the Administrative Agent to
part with possession of any instruments or other writings evidencing any Time
Deposits.
3.06 Stock Transfer Records. Upon request of the Administrative Agent, the
Pledgor shall deliver to the Administrative Agent the stock transfer books of
each Scheduled Subsidiary to be held by the Administrative Agent for the
duration of the pledge hereunder, provided that prior to the occurrence and
continuance of an Event of Default, the Pledgor shall only be required to
deliver copies of such stock transfer books to the Administrative Agent.
3.07 Items Held in Trust. All items required to be paid or delivered to
the Administrative Agent under this Article 3 shall, until so paid or delivered
to the
Administrative Agent, be held in trust for the benefit of the Administrative
Agent and the Banks, as security for the payment and performance in full of the
Obligations.
3.08 Authorization to File Financing Statements and Take Other Action. The
Pledgor hereby irrevocably authorizes the Administrative Agent at any time and
from time to time to sign (if required) and file in any appropriate Filing
Office, wherever located, any Financing Statement that (a) describes the
Securities Collateral in a manner consistent with Article 2 hereof, and (b)
contains any other information required by Part 5 of Article 9 of the Uniform
Commercial Code of the applicable jurisdiction for the sufficiency or Filing
Office acceptance of any Financing Statement, including whether the Pledgor is
an organization, the type of organization and any organization identification
number issued to the Pledgor. The Pledgor also authorizes the Administrative
Agent to file a copy of this Agreement in lieu of a Financing Statement, and to
take any and all actions required by any earlier versions of the Uniform
Commercial Code or by any other applicable law. The Pledgor shall provide the
Administrative Agent with any information the Administrative Agent shall
reasonably request in connection with any of the foregoing.
ARTICLE 4. DIVIDENDS; VOTING.
4.01 Unless an Event of Default shall have occurred and be continuing, the
Pledgor shall be entitled to receive all cash dividends and distributions paid
in respect of the Pledged Securities without delivering such sums to the
Administrative Agent or depositing such sums in the Cash Collateral Account, to
vote and exercise any and all other voting and consensual rights with respect to
the Pledged Securities and to give consents, waivers or ratifications in respect
thereof, provided that no vote shall be cast or consent, waiver or ratification
given or action taken which would violate or be inconsistent with any of the
terms of this Agreement or the other Loan Documents or which could reasonably be
expected to have an adverse effect on the interest of the Administrative Agent
in the Securities Collateral.
4.02 Upon the occurrence and during the continuance of an Event of
Default, (i) the Pledgor's rights under Section 4.01 shall immediately cease,
(ii) all cash dividends and other distributions in respect of the Pledged
Securities shall be deposited to the Cash Collateral Account in accordance with
the provisions of Article 3, and (iii) the Administrative Agent shall have the
right to vote, and to give consents, waivers and ratifications with respect to,
the Pledged Securities. If the Administrative Agent elects not to exercise such
rights, the Pledgor may continue to exercise such rights, provided that the
Pledgor shall not take any vote or other action with respect to such Pledged
Securities that could reasonably be expected to have an adverse effect on the
interest of the Administrative Agent in the Securities Collateral, and if so
directed in writing, shall vote or take such other action as directed by the
Administrative Agent. The Pledgor hereby grants to the Pledgee, an irrevocable
proxy to exercise all voting and consensual rights with respect to the Pledged
Securities and to give consents, waivers or ratifications in respect thereof,
which proxy shall only be effective upon the occurrence of an Event of Default
and shall remain effective during the continuance of an Event of Default.
ARTICLE 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. For so long as
this Agreement shall remain in effect, the Pledgor represents, warrants and
covenants to and with the Administrative Agent as follows:
5.01 The Pledgor has the requisite power, authority and legal right to
execute, deliver and perform its obligations under this Agreement and to pledge
and grant a security interest in all of the Securities Collateral. The
execution, delivery and performance of this Agreement, and the pledge of and
granting of a security interest in the Securities Collateral hereunder, have
been duly authorized by all necessary corporate or other action of the Pledgor
and do not contravene (i) any law, rule or regulation, (ii) any provision of the
Pledgor's charter documents or by-laws, (iii) any judgment, decree or order of
any arbitrator, court or other adjudicatory or regulatory body or (iv) any
agreement or instrument to which the Pledgor is a party or by which it or any of
its property is bound or affected or constitute a default thereunder other than
those, in the case of clauses (i) and (iv), that could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
5.02 The Pledgor is the owner, legally, beneficially and of record, of all
of the Scheduled Securities free of any Encumbrances, except for Encumbrances
specifically permitted under the terms of the Loan Agreement. All of the
Scheduled Securities have been duly and validly issued, and are fully paid and
nonassessable.
5.03 The Pledgor covenants that, with respect to any Additional Securities
that it may pledge to the Administrative Agent in the future, at the time of
such pledge, (a) the Pledgor will be the legal, beneficial and record owner of
such Additional Securities free of any Encumbrances, except for Encumbrances
specifically permitted under the terms of the Loan Agreement, (b) the Pledgor
will have the requisite legal right, power and authority to pledge same to the
Administrative Agent hereunder and (c) all such Additional Securities shall be
duly and validly issued, and will be fully paid and nonassessable.
5.04 Schedule 1 accurately sets forth as to each Issuer of Scheduled
Securities (i) the total number of issued and outstanding Securities of such
Issuer and (ii) the total number of such Securities that have been pledged
hereunder. With respect to each Foreign Subsidiary whose capital stock is
pledged hereunder by the Pledgor, the Pledgor has pledged stock representing at
least 65%, but not more than 66 1/3% of the total combined voting power of all
classes of capital stock of such Foreign Subsidiary entitled to vote.
5.05 Upon execution and delivery of the Loan Documents by the parties
thereto and the delivery by the Pledgor of the Scheduled Securities and related
certificates to the Administrative Agent accompanied by instruments of transfer
or assignment duly executed in blank in form and substance reasonably
satisfactory to the Administrative Agent or, if a security interest in any of
the Securities Collateral may not under applicable law be perfected by
possession, then upon the filing of appropriate Financing Statements,
the Administrative Agent will obtain a valid first lien on, and perfected
security interest in, the Securities Collateral and the Proceeds thereof,
subject to no prior Encumbrance.
5.06 The Pledgor will defend the security interest of the Administrative
Agent in the Securities Collateral against the competing claims and demands of
all other Persons, other than claims or demands related to Encumbrances
specifically permitted under the terms of the Loan Agreement.
5.07 Except as may be permitted by the Loan Agreement, the Pledgor will
not (a) sell or otherwise dispose of, grant any option with respect to, or
mortgage, pledge (except pursuant to this Agreement) or otherwise encumber any
of the Securities Collateral, any shares in the capital stock of any Subsidiary,
or any membership or other ownership interest therein, or (b) consent to or
approve the issuance of (i) any additional shares of any class of capital stock
of any Subsidiary, or the issuance of any membership or other ownership interest
in any Subsidiary; (ii) any securities convertible voluntarily by the holder
thereof or automatically upon the occurrence or nonoccurrence of any event or
condition into, or exchangeable for, any such shares or interests; or (iii) any
warrants, options, rights, or other commitments entitling any person to purchase
or otherwise acquire any such shares or interests except pursuant to an employee
stock option plan of such Subsidiary authorizing the grant of no more than 30%
of such Subsidiary's shares or interests.
5.08 The Pledgor, at its sole cost and expense, will execute and deliver
all such instruments, and take all such other action as the Administrative Agent
from time to time may reasonably request, in order to further effectuate the
purposes of this Agreement and to carry out the terms hereof.
ARTICLE 6. REMEDIES UPON EVENT OF DEFAULT.
6.01 Remedies in General. Following the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall be entitled
to exercise all of its rights, powers and remedies (whether vested in it by this
Agreement, the other Loan Documents or by law) for the protection and
enforcement of its rights in respect of the Securities Collateral, and the
Administrative Agent shall be entitled, without limitation, to exercise the
following rights and remedies (in addition to the rights and remedies of a
secured party under the NY UCC), which the Pledgor hereby agrees are
commercially reasonable:
(a) to cause the Pledged Securities and any other Securities constituting
Securities Collateral to be transferred into its own name or the name(s) of its
nominee(s) or successor(s) in interest on the books of the Issuer of such
Securities;
(b) to collect, receive and hold as Cash Collateral for the Obligations
(or apply the same to any Obligation) all dividends, distributions and other
income on the Pledged Securities and the other Securities Collateral;
(c) to vote all or any part of the Pledged Securities (whether or not
transferred into the name of a Person other than the Pledgor pursuant to clause
(a)) and give all consents, waivers and ratifications in respect of the
Securities Collateral and otherwise act with respect thereto as though the
Administrative Agent was the outright owner thereof;
(d) to demand, xxx for, collect or make any compromise or settlement the
Administrative Agent deems suitable in respect of any Securities Collateral;
(e) subject to applicable law, at any time or from time to time to sell,
assign and deliver, or grant options to purchase, all or any part of the
Securities Collateral, or any interest therein in accordance with the provisions
of Section 6.02; and
(f) to set off against the Obligations any and all sums deposited with the
Administrative Agent or held by it, including without limitation, any sums or
Financial Assets standing to the credit of the Cash Collateral Account and any
Time Deposits issued by the Administrative Agent.
The Administrative Agent may enforce its rights hereunder without any other
notice and without compliance with any other condition precedent now or
hereafter imposed by statute, rule of law or otherwise (all of which are hereby
expressly waived by the Pledgor, to the fullest extent permitted by law).
6.02 Sale of Securities Collateral.
(a) In the event of any disposition of the Securities Collateral as
provided in Section 6.01(e), the Administrative Agent shall give to the Pledgor
at least ten (10) days' prior written notice of the time and place of any public
sale of the Securities Collateral or of the time after which any private sale or
any other intended disposition is intended to be made. The Pledgor hereby
acknowledges that ten (10) days' prior written notice of such sale or sales
constitutes reasonable notice. If any of the Securities Collateral is sold by
the Administrative Agent upon credit or for future delivery, the Administrative
Agent shall not be liable for the failure of the purchaser to pay for the same
and in such event the Administrative Agent may resell such Securities
Collateral. At any public sale of Securities Collateral, unless prohibited by
applicable law, the Administrative Agent or any holder of the Obligations may
bid for and purchase all or any part of the Securities Collateral so sold free
from any such right or equity of redemption; and if any part or all of the
Securities Collateral is of a type customarily sold in a recognized market or is
of the type which is the subject of widely-distributed standard price
quotations, the Administrative Agent or any holder of the Obligations may buy at
a private sale and may make payment therefor by any means including, without
limitation, cancellation of indebtedness secured thereby and payment of any
surplus to the Pledgor or such other party as may be required by applicable law.
(b) The Pledgor recognizes that the Administrative Agent may be unable to
effect a public sale of the Pledged Securities by reason of certain prohibitions
contained in the
Securities Act, federal banking laws or other applicable laws, regulations, or
agreements to which such Pledged Securities may be subject and, therefore, may
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers. Notwithstanding the foregoing, the Pledgor shall not be
required to register the Pledged Securities under the Securities Act or
applicable state or foreign law securities laws. The Pledgor agrees that any
such private sales, which may be at prices and other terms less favorable to the
seller than if sold at public sales, shall be deemed to have been made in a
"commercially reasonable" manner within the meaning of the NY UCC, provided that
the notice specified in Section 6.02(a) shall have been given to the Pledgor.
The Administrative Agent shall be under no obligation to delay a sale of any of
the Pledged Securities for the period of time necessary to permit the Issuer of
such Pledged Securities to register same for public sale under the Securities
Act, or such other federal banking or applicable laws, even if the Issuer agrees
to do so. Subject to the foregoing, the Administrative Agent agrees that any
sale of the Securities Collateral shall be made in a commercially reasonable
manner.
(c) The Pledgor agrees to do or cause to be done all acts and things as
may be reasonably necessary to cause the sale(s) of all or any portion of the
Securities Collateral pursuant to this Article 6 to be valid and binding and to
comply with any and all applicable laws, including, without limitation, the
Securities Act, the Exchange Act, SEC and other regulations, orders, writs,
injunctions or decrees of any and all courts, arbitrators or governmental
agencies or similar regulatory bodies having jurisdiction over any such sale or
sales, all at the Pledgor's sole cost and expense except that the Pledgor shall
not be required to register the Pledged Securities under the Securities Act or
applicable state or foreign law securities laws. In furtherance and not in
limitation of the foregoing, at the request of the Administrative Agent, the
Pledgor shall use best efforts to cause any Issuer(s) of Securities Collateral
contemplated to be sold:
(i) to execute and deliver, and to cause its directors and officers
to execute and deliver, all instruments and documents, and to do or cause to be
done all other acts and things as may be necessary or advisable (in the opinion
of legal counsel to the Administrative Agent) to cause such Pledged Securities
to be exempt from the registration requirements of the Securities Act; and
(ii) to comply with the provisions of the securities or "Blue Sky"
laws of any jurisdiction which the Administrative Agent shall reasonably
designate and, if required, to make available to its Security holders, as soon
as practicable, an earnings statement (which need not be audited) which will
allow Persons to take advantage of the provisions of Section 11(a) of the
Securities Act.
6.03 Appointment as Attorney-in-Fact. The Pledgor hereby irrevocably
appoints the Administrative Agent as the Pledgor's attorney-in-fact with full
power of substitution, effective upon the occurrence and during the continuance
of an Event of Default, to take any and all of the actions specified in this
Article 6 and elsewhere in this Agreement with full authority in the name of the
Pledgor and at the Pledgor's sole cost and expense. This
power of attorney is coupled with an interest and shall be irrevocable for so
long as this Agreement shall remain in effect.
6.04 Injunctive Relief. The Pledgor acknowledges that a breach of any of
the covenants contained in this Article 6 will cause irreparable injury to the
Administrative Agent and the Banks, and that the Administrative Agent and the
Banks have no adequate remedy at law in respect of such breach. As a
consequence, the Pledgor agrees that each and every covenant contained in this
Article 6 shall be specifically enforceable against the Pledgor, and the Pledgor
hereby (i) agrees not to assert in defense of any action for specific
performance that the Administrative Agent has not suffered irreparable harm or
that the Administrative Agent has an adequate remedy at law, and (ii) waives any
defense based upon the grounds set forth in clause (i) of this Section 6.04.
ARTICLE 7. REMEDIES CUMULATIVE. Each right, power and remedy of the
Administrative Agent or any holder of the Obligations provided for in this
Agreement, the other Loan Documents, or now or hereafter existing at law or in
equity, or otherwise, shall be cumulative and concurrent and shall be in
addition to every other such right, power or remedy. The exercise or beginning
of the exercise by the Administrative Agent or any holder of the Obligations of
one or more of such rights, powers or remedies shall not preclude the
simultaneous or subsequent exercise by the Administrative Agent or any holder of
the Obligations of all such other rights, powers or remedies, and no failure or
delay on the part of the Administrative Agent or any holder of the Obligations
to exercise any such right, power or remedy shall operate as a waiver thereof.
ARTICLE 8. MARSHALLING. The Administrative Agent may exercise its rights with
respect to the Securities Collateral without resorting or regard to other
collateral or sources of reimbursement. The Administrative Agent shall not be
required to marshal any present or future collateral security for, or other
assurances of payment of, the Obligations or any of them, or to resort to such
collateral security or other assurances of payment in any particular order. To
the extent that it may lawfully do so, the Pledgor hereby (a) agrees that it
will not invoke any law relating to the marshalling of collateral that might
cause delay in or impede the enforcement of the Administrative Agent's rights
with respect to the Obligations or any of the Collateral and (b) irrevocably
waives the benefits of all such laws.
ARTICLE 9. APPLICATION OF MONEYS BY THE ADMINISTRATIVE AGENT. All monies
collected upon any sale of the Securities Collateral hereunder, together with
all other monies received by the Administrative Agent hereunder, shall be
applied in the same manner as set forth in Section 9.01(h) of the Security
Agreement of the Pledgor.
ARTICLE 10. PLEDGOR'S OBLIGATIONS ABSOLUTE. The obligations of the Pledgor under
this Agreement shall be absolute and unconditional and shall remain in full
force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (a) any renewal, extension, amendment
or modification of or addition or supplement to or deletion from the other Loan
Documents, or any assignment or transfer
of the other Loan Documents; (b) any waiver, consent, extension, indulgence or
other action or inaction under or in respect of the Loan Documents; (c) any
furnishing of any additional collateral security to the Administrative Agent or
its assignee or any acceptance thereof or any release of any collateral security
by the Administrative Agent or its assignee; (d) any limitation on any party's
liability or obligations under the Loan Documents or any invalidity or
unenforceability, in whole or in part, of the same; or (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceeding relating to the Pledgor or any other Person, or any action
taken with respect to this Agreement by any trustee or receiver or by any court,
in any such proceeding; whether or not the Pledgor shall have notice or
knowledge of any of the foregoing. The Pledgor expressly consents to any and all
of the foregoing and, to the maximum extent permitted by law, waives any rights
or defenses relating to the enforcement of this Agreement that the Pledgor may
have in connection therewith. Except for notices specifically provided for
herein, the Pledgor hereby expressly waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, collateral
received or delivered or other action taken in reliance hereon and all other
demands and notices of any description.
ARTICLE 11. EXONERATION OF ADMINISTRATIVE AGENT. Under no circumstances shall
the Administrative Agent be deemed to assume any responsibility for or
obligation or duty with respect to any part or all of the Securities Collateral
of any nature or kind, or any matter or proceedings arising out of or relating
thereto, other than (i) to exercise reasonable care in the physical custody of
the Securities Collateral and (ii) following the occurrence and during the
continuance of an Event of Default, to act in a commercially reasonable manner.
The Administrative Agent shall not be required to take any action of any kind to
collect, preserve or protect its or the Pledgor's rights in the Securities
Collateral or against any other Person. The Administrative Agent's prior
recourse to any part or all of the Securities Collateral shall not constitute a
condition of any demand, suit or proceeding for payment or collection of the
Obligations.
ARTICLE 12. TERMINATION. The obligations of the Pledgor hereunder shall
terminate when the commitment of the Banks to extend credit under the Loan
Agreement shall have terminated and all of the Obligations have been paid in
full in cash and discharged and promptly upon such full and complete performance
and satisfaction, Pledgee shall surrender, at the request and expense of the
Pledgor, any remaining Securities Collateral and money received in respect
thereof to the Pledgor; provided, however, that:
(a) if a claim is made upon the Administrative Agent or the Banks at
any time for repayment or recovery of any amounts or any property received by
the Administrative Agent or the Banks from any source on account of any of the
Obligations and the Administrative Agent or the Banks repay or return any
amounts or property so received (including interest thereon to the extent
required to be paid by the Administrative Agent or the Banks) or
(b) if the Administrative Agent or the Banks become liable for any
part of such claim by reason of (i) any judgment or order of any court or
administrative authority having competent jurisdiction, or (ii) any settlement
or compromise of any such claim,
then the Pledgor shall remain obligated under this Agreement with respect to the
amounts so repaid or property so returned and the amounts for which the
Administrative Agent or the Banks become liable (such amounts being deemed part
of the Obligations), and the security interest granted herein shall apply with
full force and effect to such Obligations, to the same extent as if such amounts
or property had never been received by the Administrative Agent or the Banks,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Obligations.
ARTICLE 13. OVERDUE AMOUNTS. Until paid, all amounts due and payable by the
Pledgor hereunder shall constitute an Obligation under the Loan Documents and
shall be secured by the Securities Collateral. Such amounts shall bear interest
at the rate per annum provided in the Loan Agreement to be paid on Base Rate
Loans after the occurrence of an Event of Default.
ARTICLE 14. MISCELLANEOUS.
14.01 Successors and Assigns. This Agreement shall be binding upon the
Pledgor, the Administrative Agent and the Banks and their respective successors
and assigns, and shall inure to the benefit of the Administrative Agent and the
Banks and their respective successors, transferees and assigns, as permitted by
the Loan Agreement. The Pledgor may not assign any of its obligations hereunder
without the prior written consent of the Administrative Agent.
14.02 Survival. All representations, warranties, covenants and agreements
contained in this Agreement shall survive the execution and delivery of the Loan
Documents and shall continue for so long as this Agreement shall remain in
effect.
14.03 Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, that holding
shall not invalidate or render unenforceable any other provision hereof.
14.04 Amendments; Waiver, Etc. No provision of this Agreement, or any
right of the Administrative Agent in respect of the Obligations, can be changed,
waived, modified, discharged or terminated except by an instrument in writing
signed by the Administrative Agent and the Pledgor expressly referring to the
provision of this Agreement or the right to which such instrument relates; and
no such waiver shall extend to, affect or impair any right with respect to any
obligation which is not expressly dealt with therein. No course of dealing or
delay or omission on the part of the Administrative Agent or the Banks or any of
them in exercising any right shall operate as a waiver of such right or any
other right, or otherwise be prejudicial thereto. A waiver on any one occasion
shall not be construed as a bar to or waiver of any right on any future
occasion.
14.05 Counterparts. This Agreement and any amendment hereof may be
executed in several counterparts by each party on a separate counterpart, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument.
14.06 Captions. Captions and headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
the provisions hereof.
14.07 Notices. All notices, approvals, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given when delivered in the manner provided in the Loan Agreement and delivered
to a party at its address for notice set forth in the Loan Agreement or to such
other address as a party shall furnish by notice to the other parties.
14.08 Governing Law. This Agreement shall be governed by, and interpreted
and defined in accordance with, the laws of the State of New York (without
regard to its principles relating to choice and conflicts of law).
14.09 CONSENT TO JURISDICTION. THE PLEDGOR AND ADMINISTRATIVE AGENT EACH
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, OR IN THE UNITED
STATES DISTRICT COURT SITTING IN NEW YORK, NEW YORK, OR ANY APPELLATE COURT TO
WHICH APPEALS MAY BE TAKEN FROM ANY OF THE FOREGOING COURTS, AND CONSENTS TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND TO SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE PLEDGOR BY MAIL AT THE ADDRESS ABOVE. THE PLEDGOR AND
ADMINISTRATIVE AGENT EACH HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
14.10 WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR AND THE ADMINISTRATIVE
AGENT KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT TO ENTER
INTO THIS PLEDGE AGREEMENT AND FOR THE BANKS TO MAKE LOANS AND EXTEND CREDIT TO
THE PLEDGOR. EXCEPT AS PROHIBITED BY LAW, EACH OF THE PLEDGOR AND ADMINISTRATIVE
AGENT WAIVES ANY RIGHT WHICH IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE FIRST SENTENCE OF THIS
SECTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE PLEDGOR (I) CERTIFIES THAT
NEITHER THE ADMINISTRATIVE AGENT, NOR ANY BANK NOR ANY REPRESENTATIVE,
ADMINISTRATIVE AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY BANK
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(II) ACKNOWLEDGES THAT, IN ENTERING INTO THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH THE ADMINISTRATIVE AGENT IS A PARTY, THE ADMINISTRATIVE AGENT
AND THE BANKS ARE RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
(signatures on next page)
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers as of the day and year first above
written.
PLEDGOR: ADMINISTRATIVE AGENT:
XXXXXX & XXXXX ENTITY(2) FLEET NATIONAL BANK, as
Administrative Agent
By: /s/ Xxxxxxx X'Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------- -----------------------
Name: Xxxxxxx X'Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer Title: Director
Hereunto Duly Authorized Hereunto Duly Authorized
--------
(2) Xxxxxxx X'Xxxxxxx executed separate Securities Collateral Pledge
Agreements for Xxxxxx & Xxxxx, Inc. and the following direct and indirect
subsidiaries of Xxxxxx & Noble, Inc.:
B&N General Partner (Pennsylvania) Corp. I
B&N General Partner (Pennsylvania) Corp. II
B&N General Partner (Georgia) Corp.
B&N Limited Partner (Georgia) Corp.
B&N General Partner (Texas) Corp.
B&N Limited Partner (Texas) Corp.
Xxxxxx & Xxxxx Publishing, Inc.
B&X.xxx Holding Corp.
Exhibits and Schedules Omitted
