Exhibit 10.19
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of May 25, 1996 (this "Agreement") between RIVER
HILLS WILSONS, INC., a Minnesota corporation ("Pledgor"), and MELVILLE
CORPORATION, a New York corporation (the "Secured Party").
W I T N E S S E T H
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WHEREAS, Pledgor is the record and beneficial owner of all the shares of
stock described in Schedule I hereto (the "Pledged Shares") issued by the
corporations named therein;
WHEREAS, the Secured Party and Wilsons Leather Experts Inc. (the "Issuer")
are parties to a Sale Agreement of even date herewith (as the same may be
amended from time to time, the "Sale Agreement"); and
WHEREAS, in order to induce the Secured Party to enter into the Sale
Agreement, Pledgor has agreed to grant a continuing security interest in and to
the Pledged Collateral to secure the obligations of the Issuer under its
subordinated note (the "Note") sold pursuant thereto;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Note are used herein as therein defined, and the following shall have (unless
otherwise provided elsewhere in this Agreement) the following respective
meanings (such meanings being equally applicable to both the singular and plural
form of the terms defined):
"Bankruptcy Code" shall mean Xxxxx 00, Xxxxxx Xxxxxx Code, as amended from
time to time, and any successor statute thereto.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
"Secured Obligations" shall have the meaning assigned to such term in
Section 3 hereof.
"Security Documents" means this Agreement, each of the other Pledge
Agreements between the Secured Party and Wilsons Center, Inc. a Minnesota
corporation, Rosedale Wilsons, Inc., a Minnesota corporation, and Wilsons The
Leather Experts Inc., a Minnesota corporation ("Newco"), respectively, the Note,
the Security Agreement among the Secured Party and the grantors listed on the
signature pages thereof and the Subordination Agreement among the Secured Party,
Newco and General Electric Capital Corporation ("GECC").
"Senior Security Interest" means the first priority security interest in
the Pledged Collateral created pursuant to the Pledge Agreement of even date
herewith between GECC, as agent under the Credit Agreement (as defined below)
for the benefit of the lenders party thereto, and the Pledgor (the "Senior
Pledge Agreement").
2. Pledge. Pledgor hereby pledges to the Secured Party and grants to the
Secured Party a security interest in all of the following (collectively, the
"Pledged Collateral"):
(i) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, distributions, 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 Shares of Pledgor;
(ii) all additional shares of stock of any issuer of the Pledged
Shares from time to time acquired by Pledgor in any manner (which shares
shall be deemed to be part of the Pledged Shares), and the certificates
representing such additional shares, and all dividends, distributions,
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
(iii) all Stock owned by Pledgor of any Person who, after the
date of this Agreement, becomes, as a result of any occurrence, a directly
owned Subsidiary of Pledgor (which Stock shall be deemed to be part of the
Pledged Shares) and the certificates, if any, representing such Stock and
all dividends, distributions, 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 Stock.
3. Security for Obligations. This Agreement secures, and the Pledged
Collateral is security for, the prompt payment of all principal and interest on
the Note in full when due, whether at stated maturity, by acceleration or
otherwise, all other amounts payable by Pledgor under this Agreement or any
other Security Document and any amendments, restatements, renewals, extensions
or modifications of any of the foregoing (collectively, the "Secured
Obligations").
4. Delivery of Pledged Collateral. Upon indefeasible payment in full of
the Senior Debt (as defined in the Subordination Agreement) (i) all certificates
representing or evidencing the Pledged Shares shall be delivered to and held by
or on behalf of the Secured Party pursuant hereto and shall be accompanied by
duly executed instruments of transfer or assignment in blank all in form and
substance satisfactory to the Secured Party; (ii) the Secured Party shall have
the right, after acceleration of the Secured Obligations or the failure to pay
the Secured Obligations at maturity, in its discretion and without notice to
Pledgor, to transfer to or to register in the name of the Secured Party or any
of its nominees any or all of the Pledged Shares; and (iii) the Secured Party
shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Shares for certificates or instruments of
smaller or larger denominations.
5. Representations and Warranties. Pledgor represents and warrants to
the Secured Party that:
(a) Pledgor is, and at the time of delivery of the Pledged Shares to
the Secured Party pursuant to Section 4 hereof will be, the sole holder of
record and the sole beneficial owner of the Pledged Collateral pledged by
Pledgor free and clear of any Lien thereon or affecting the
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title thereto, except for the Lien created by this Agreement and the Lien
created by the Senior Pledge Agreement and any restrictive legend appearing on
any certificate representing the Pledged Shares.
(b) All of the Pledged Shares have been duly authorized, validly
issued and are fully paid and non-assessable.
(c) Pledgor has the right and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged Collateral pledged by
Pledgor to the Secured Party as provided herein.
(d) None of the Pledged Shares 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.
(e) Except as set forth on Schedule I hereto, all of the Stock of each
Subsidiary is presently owned by the Pledgor as set forth on Schedule I hereto,
and is presently represented by the stock certificates listed on Schedule I
hereto. As of the date hereof, there are no existing options, warrants, calls
or commitments of any character whatsoever relating to the Stock of the
Subsidiaries of Pledgor.
(f) No consent, approval, authorization or other order of any Person
and no consent, authorization, approval, or other action by, and no notice to or
filing with, any governmental authority is required either (i) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor or (ii) for the
exercise by the Secured Party 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.
(g) The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement will create a valid lien on and a perfected security
interest in the Pledged Collateral pledged by Pledgor, and the proceeds thereof,
securing the payment of the Secured Obligations, subject to no other Lien or
security interest other than the Senior Security Interest, the Lien created by
the Senior Pledge Agreement and any restrictive legend appearing on any
certificate representing the Pledged Shares.
(h) This Agreement has been duly authorized, executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable in accordance with its terms.
(i) The Subsidiaries listed on Schedule I hereto are the only direct
Subsidiaries of Pledgor. Except as set forth on Schedule I hereto, the Pledged
Shares constitute 100% of the issued and outstanding shares of stock of the
issuer thereof.
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
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6. Covenants. Pledgor covenants and agrees that until the date of
payment of the Secured Obligations in full (the "Termination Date"):
(a) Without the prior written consent of the Secured Party, Pledgor
will not sell, assign, transfer, pledge, or otherwise encumber any of its rights
in or to the Pledged Collateral pledged by Pledgor or any unpaid dividends or
other distributions or payments with respect thereto or xxxxx x Xxxx in any
therein.
(b) Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and take all such action as the Secured Party from
time to time may request in order to ensure to the Secured Party the benefits of
the Liens in and to the Pledged Collateral intended to be created by this
Agreement, including the filing of any necessary Code financing statements,
which may be filed by the Secured Party with or without the signature of
Pledgor, and will cooperate with the Secured Party, at Pledgor's expense, in
obtaining all necessary approvals and making all necessary filings under federal
or state law in connection with such Liens or any sale or transfer of the
Pledged Collateral.
(c) Pledgor has and will defend the title to the Pledged Collateral
and the Liens of the Secured Party thereon against the claim of any Person and
will maintain and preserve such Liens until the Termination Date.
(d) Pledgor will, upon obtaining any additional shares of any
Subsidiaries or any new directly owned Subsidiary, which shares are not already
Pledged Collateral, promptly (and in any event within three (3) Business Days)
deliver to the Secured Party a Pledge Amendment, duly executed by such Pledgor,
in substantially the form of Schedule II hereto (a "Pledge Amendment"), in
respect of the additional Pledged Shares which are to be pledged pursuant to
this Agreement. Pledgor hereby authorizes the Secured Party to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Shares listed on
any Pledge Amendment delivered to the Secured Party shall for all purposes
hereunder be considered Pledged Collateral.
7. Pledgor's Rights. As long as no Event of Default shall have occurred
and be continuing and until written notice shall be given to Pledgor in
accordance with Section 8(a) hereof,
(a) Pledgor shall have the right, from time to time, to vote and give
consents with respect to the Pledged Collateral or any part thereof for all
purposes not inconsistent with the provisions of this Agreement; 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
Secured Party in respect of the Pledged Collateral or which would authorize or
effect (except as and to the extent expressly permitted by the credit agreement
dated as of the date hereof among Wilsons Leather Holdings Inc., certain
affiliated corporations, the lenders party thereto and GECC, as agent (the
"Credit Agreement")) (i) the dissolution or liquidation, in whole or in part, of
any of Pledgor's Subsidiaries, (ii) the consolidation or merger of any of
Pledgor's Subsidiaries with any other Person, (iii) the sale, disposition or
encumbrance of all or substantially all of the assets of any of Pledgor's
Subsidiaries, (iv) any change in the authorized number of
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shares, the stated capital or the authorized share capital of any of such
Pledgor's Subsidiaries or the issuance of any additional shares of such
Subsidiary's Stock, or (v) the alteration of the voting rights with respect to
the Stock of any of such Pledgor's Subsidiaries;
(b) (i) Pledgor shall be entitled, from time to time, to collect and
receive for its own respective use all cash dividends paid in respect of
the Pledged Shares other than any and all (A) dividends paid or payable
other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange
for, any Pledged Collateral, (B) dividends and other distributions paid or
payable in cash in respect of any Pledged Collateral in connection with a
partial or total liquidation or dissolution, and (C) cash paid, payable or
otherwise distributed in redemption of, or in exchange for, any Pledged
Collateral; provided, however, that until actually paid all rights to such
distributions shall remain subject to the Lien created by this Agreement;
and
(ii) all dividends (other than such cash dividends as are
permitted to be paid to Pledgor in accordance with clause (i) above) and
all other distributions in respect of any of the Pledged Shares of Pledgor,
whenever paid or made, shall, upon indefeasible payment in full of the
Senior Debt, be delivered to the Secured Party to hold as Pledged
Collateral and shall, if received by Pledgor, be received in trust for the
benefit of the Secured Party, be segregated from the other property or
funds of Pledgor, and be forthwith delivered to the Secured Party as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
8. Defaults and Remedies.
(a) Upon acceleration of the Secured Obligations or failure to pay the
Secured Obligations at maturity and upon written notice to Pledgor, the Secured
Party (personally or through an agent) is hereby authorized and empowered to
transfer and register in its name or in the name of its nominee the whole or any
part of the Pledged Collateral, to exchange certificates or instruments
representing or evidencing Pledged Shares for certificates or instruments of
smaller or larger denominations, to exercise the voting and all other rights as
a stockholder with respect thereto, to collect and receive all cash dividends
and other distributions made thereon, to sell in one or more sales after at
least ten (10) days' notice of the time and place of any public sale or of the
time after which a private sale is to take place (which notice Pledgor agrees is
commercially reasonable), but without any previous notice or advertisement, the
whole or any part of the Pledged Collateral and to otherwise act with respect to
the Pledged Collateral as though the Secured Party was the outright owner
thereof, Pledgor hereby irrevocably constituting and appointing the Secured
Party as the proxy and attorney-in-fact of Pledgor, with full power of
substitution to do so, and which shall remain in effect until the Secured
Obligations are indefeasibly paid in full; provided, however, the Secured Party
shall not have any duty to exercise any such right or to preserve the same and
shall not be liable for any failure to for any delay in doing so. Any sale shall
be made at a public or private sale at the Secured Party's place of business, or
at any or elsewhere to be named in the notice of sale, either for cash or upon
credit or for future delivery at such price as the Secured Party may deem fair,
and the Secured Party may be the purchaser of the whole or any part of the
Pledged Collateral so sold and hold the same
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thereafter in its own right free from any claim of Pledgor or any right of
redemption. Each sale shall be made to the highest bidder, but the Secured Party
reserves the right to reject any and all bids at such sale which, in its
discretion, it shall deem inadequate. Demands of performance, except as
otherwise herein specifically provided for, notices of sale, advertisements and
the presence of property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of the Secured Party.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, the highest bid, if there be but
one sale, shall be inadequate to discharge in full all the Secured Obligations,
or if the Pledged Collateral be offered for sale in lots, if at any of such
sales, the highest bid for the lot offered for sale would indicate to the
Secured Party, in its discretion, the unlikelihood of the proceeds of the sales
of the whole of the Pledged Collateral being sufficient to discharge all the
Secured Obligations, the Secured Party may, on one or more occasions and in its
discretion, postpone any of said sales by public announcement at the time of
sale or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days' notice to Pledgor.
(c) In the event of any sales hereunder the Secured Party shall,
after deducting all costs or expenses of every kind (including reasonable
attorneys' fees and disbursements) for care, safekeeping, collection, sale,
delivery or otherwise, apply the residue of the proceeds of the sales to the
payment or reduction, either in whole or in part, of the Secured Obligations in
accordance with the agreements and instruments governing and evidencing such
Secured Obligations, returning the surplus, if any, to Pledgor.
(d) If, at any time when the Secured Party shall determine to
exercise its right to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as amended (the "Act"), the Secured Party may, in its discretion (subject
only to applicable requirements of law), sell such Pledged Collateral or part
thereof by private sale in such manner and under such circumstances as the
Secured Party may deem necessary or advisable, but subject to the other
requirements of this Section 8, and shall not be required to effect such
registration or to cause the same to be effected. Without limiting the
generality of the foregoing, in any such event the Secured Party in its
discretion (x) may, in accordance with applicable securities laws, proceed to
make such private sale notwithstanding that a registration statement for the
purpose of registering such Pledged Collateral or part thereof could be or shall
have been filed under said Act (or similar statute), (y) may approach and
negotiate with a single possible purchaser to effect such sale, and (z) may
restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment and not with a view
to the distribution or sale of such Pledged Collateral or part thereof. In
addition to a private sale as provided above in this Section 8, if any of the
Pledged Collateral shall not be freely distributable to the public without
registration under the Act (or similar statute) at the time of any proposed sale
pursuant to this Section 8, then the Secured Party shall not be required to
effect such registration or cause the same to be effected but, in its discretion
(subject only to applicable requirements of law), may require that any sale
hereunder (including a sale at auction) be
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conducted subject to restrictions (i) as to the financial sophistication and
ability of any Person permitted to bid or purchase at any such sale, (ii) as to
the content of legends to be placed upon any certificates representing the
Pledged Collateral sold in such sale, including restrictions on future transfer
thereof, (iii) as to the representations required to be made by each Person
bidding or purchasing at such sale relating to that Person's access to financial
information about Pledgor and such Person's intentions as to the holding of the
Pledged Collateral so sold for investment, for its own account, and not with a
view to the distribution thereof, and (iv) as to such other matters as the
Secured Party may, in its discretion, deem necessary or appropriate in order
that such sale (notwithstanding any failure so to register) may be effected in
compliance with the Bankruptcy Code and other laws affecting the enforcement of
creditors' rights and the Act and all applicable state securities laws.
(e) Pledgor acknowledges that any private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agree that any such private sale
shall be deemed to have made in a commercially reasonable manner. The Secured
Party shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the registrant to register
such securities for public sale under the Act, or under applicable state
securities laws, even if Pledgor would agree to do so.
(f) Pledgor agrees 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 Pledgor waives the benefit of all such laws to the extent it
lawfully may do so. Pledgor agrees that it will not interfere with any right,
power and remedy of the Secured Party provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by the Secured Party of any one or more of
such rights, powers or remedies.
(g) Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to the Secured Party
and Lenders, that the Secured Party has no adequate remedy at law in respect of
such breach and, as a consequence, agrees that each and every covenant contained
in this Section 8 shall be specifically enforceable against Pledgor, and 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 Secured
Obligations are not then due and payable in accordance with the agreements and
instruments governing and evidencing such obligations. Pledgor further
acknowledges the impossibility of ascertaining the amount of damages which would
be suffered by the Secured Party by reason of a breach of any of such covenants
and, consequently, agrees that, if the Secured Party shall xxx for damages for
breach, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the lesser of (i) the value of the Pledged Collateral pledged by
Pledgor on the date the Secured Party shall demand compliance with this Section
8, and (ii) the amount required to pay in full the Secured Obligations.
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9. Application of Proceeds. Any cash held by the Secured Party as
Pledged Collateral and all cash proceeds received by the Secured Party in
respect of any sale of, liquidation of, or other realization upon all or any
part of the Pledged Collateral shall be applied by the Secured Party in
accordance with the Security Agreement.
10. Waiver. No delay on the Secured Party's part in exercising any power
of sale, Lien, option or other right hereunder, and no notice or demand which
may be given to or made upon Pledgor by the Secured Party with respect to any
power of sale, Lien, option or other right hereunder, shall constitute a waiver
thereof, or limit or impair the Secured Party's right to take any action or to
exercise any power of sale, Lien, option, or any other right hereunder, without
notice or demand, or prejudice the Secured Party's rights as against Pledgor in
any respect.
11. Assignment. The Secured Party may assign, endorse or transfer any
instrument evidencing all or any part of the Secured Obligations and the holder
of such instrument shall be entitled to the benefits of this Agreement.
12. Termination. On the Termination Date, the Secured Party shall deliver
to Pledgor the Pledged Collateral pledged by Pledgor at the time subject to this
Agreement and all instruments of assignment executed in connection therewith,
free and clear of the Liens hereof and, except as otherwise provided herein, all
of Pledgor's obligations hereunder shall at such time terminate.
13. Lien Absolute. All rights of the Secured Party hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Sale Agreement, the
escrow agreement dated of even date herewith among the Secured Party, Newco,
certain limited partnerships and managers and The Bank of New York as escrow
agent (the "Escrow Agreement"), the registration rights agreement dated of even
date herewith among the Secured Party, Newco and certain investors and managers
(the "Registration Rights Agreement"), any Security Document or any other
agreement or instrument governing or evidencing any Secured Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Sale Agreement,
the Escrow Agreement, the Registration Rights Agreement, any Security Document
or any other agreement or instrument governing or evidencing any Secured
Obligations;
(c) 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 of the Secured Obligations; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor.
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14. Release. Pledgor consents and agrees that the Secured Party may at
any time, or from time to time, in its discretion (a) renew, extend or change
the time of payment, and/or the manner, place or terms of payment of all or any
part of the Secured Obligations and (b) exchange, release and/or surrender all
or any of the Pledged Collateral, or any part thereof, by whomsoever deposited,
which is now or may hereafter be held by the Secured Party in connection with
all or any of the Secured Obligations; all in such manner and upon such terms as
the Secured Party may deem proper, and without notice to or further assent from
Pledgor, it being hereby agreed that Pledgor shall be and remain bound upon this
Agreement, irrespective of the existence, value or condition of any of the
Pledged Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time, exceed the aggregate principal
amount of the Note plus the interest accrued thereon, or any other agreement
governing any Secured Obligations. Pledgor hereby waives notice of acceptance
of this Agreement, and also presentment, demand, protest and notice dishonor of
any and all of the Secured Obligations, and promptness in commencing suit
against any party hereto or liable hereon, and in giving any notice to or of
making any claim or demand hereunder upon Pledgor. No act or omission of any
kind on the Secured Party's part shall in any event affect or impair this
Agreement.
15. Indemnification. Pledgor agrees to indemnify and hold the Secured
Party harmless from and against any taxes, liabilities, claims and damages,
including reasonable attorney's fees and disbursements, and other expenses
incurred or arising by reason of the taking or the failure to take action by the
Secured Party, in good faith, in respect of any transaction effected under this
Agreement or in connection with the Lien provided for herein, including, without
limitation, any taxes payable in connection with the delivery or registration of
any of the Pledged Collateral as provided herein. Whether or not the
transactions contemplated by this Agreement shall be consummated, Pledgor agrees
to pay to the Secured Party all out-of-pocket costs and expenses incurred in
connection with this Agreement and all reasonable fees, expenses and
disbursements, and the reasonable fees of the Secured Party's agents or
representatives, incurred in connection with the execution and delivery of this
Agreement and the performance by the Secured Party of the provisions of this
Agreement and of any transactions effected in connection with this Agreement.
The obligations of Pledgor under this Section 15 shall survive the termination
of this Agreement.
16. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against Pledgor
for liquidation or reorganization, should Pledgor 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 Pledgor'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 Secured 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 Secured 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 resumed, the Secured
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
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17. Miscellaneous.
(a) The Secured Party may execute any of its duties hereunder by or
through agents or employees and shall be entitled to advice of counsel
concerning all matters pertaining to its duties hereunder.
(b) Pledgor agrees to promptly reimburse the Secured Party for actual
out-of-pocket expenses, including, without limitation, reasonable counsel fees,
incurred by the Secured Party in connection with the administration and
enforcement of this Agreement.
(c) Neither the Secured Party nor any of its respective officers,
directors, employees, agents or counsel shall be liable for any action lawfully
taken or omitted to be taken by it hereunder or in connection herewith, except
for its own gross negligence or willful misconduct.
(d) This Agreement and all obligations of Pledgor hereunder shall be
binding upon the successors and assigns of Pledgor and shall, together with the
rights and remedies of the Secured Party, inure to the benefit of the Secured
Party, all future holders of any instrument evidencing any of the Obligations
and their respective successors and assigns. No sales of participations, other
sales, assignments, transfers or other dispositions of any agreement governing
or instrument evidencing the Obligations or any portion thereof or interest
therein shall in any manner affect the security interest granted to the Secured
Party hereunder.
(e) IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS), AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. PLEDGOR HEREBY CONSENTS AND
AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW
YORK, NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES AMONG PLEDGOR AND THE SECURED PARTY PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS OR TO ANY MATTER ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR ANY OF THE OTHER SECURITY DOCUMENTS,
PROVIDED, THE SECURED PARTY AND PLEDGOR ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, CITY
OF NEW YORK, NEW YORK, AND, PROVIDED, FURTHER, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE THE SECURED PARTY FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE PLEDGED
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF THE SECURED PARTY. PLEDGOR EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND PLEDGOR HEREBY WAIVES ANY
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OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS DEEMED APPROPRIATE BY SUCH COURT. PLEDGOR HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR AT THE
ADDRESS SET FORTH ON THE SIGNATURE PAGE HERETO AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
(f) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), PLEDGOR AND THE SECURED PARTY DESIRE THAT
DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING
SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, PLEDGOR AND THE SECURED
PARTY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT
TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
THE SECURED PARTY AND PLEDGOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONS ESTABLISHED IN CONNECTION WITH, THIS AGREEMENT OR
ANY OF THE OTHER SECURITY DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO.
(g) NO WAIVER: CUMULATIVE REMEDIES. The Secured Party shall not by
any act, delay, omission or otherwise be deemed to have waived any of its rights
or remedies hereunder, and no waiver shall be valid unless in writing, signed by
the Secured Party and then only to the extent therein set forth. A waiver by
the Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Secured Party would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of the Secured Party, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or future
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law. None of the terms or provisions of this Agreement may be
waived, altered, modified or amended except by an instrument in writing, duly
executed by the Secured Party.
18. Severability. If for any reason any provision or provisions hereof
are determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or effect those portions of this
Agreement which are valid.
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19. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other party, or whenever any of the parties desires to give and
serve upon any other party any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be given in the mariner, and deemed
received, as provided for in Section 15.1 of the Sale Agreement.
20. Section Titles. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
21. Counterparts. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.
22. Subordination. NOTWITHSTANDING ANY PROVISION HEREIN CONTAINED TO THE
CONTRARY, ALL OF THE SECURED PARTY'S RIGHTS, REMEDIES AND LIENS AS SET FORTH
HEREIN AND THE EXERCISE OR ENFORCEMENT THEREOF ARE SUBJECT TO THE TERMS OF A
SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH BETWEEN SECURED PARTY AND GECC.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed as of the date first written above.
RIVER HILLS WILSONS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxx
---------------------------
Title: President
--------------------------
Accepted and Acknowledged by:
MELVILLE CORPORATION,
as Secured Party
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------
Title: Vice President
-------------------------
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SCHEDULE I
DESCRIPTION OF PLEDGED SHARES
-----------------------------
Attached to and forming a part of that certain Pledge Agreement by
River Hills Wilsons, Inc., as Pledgor, to Melville Corporation, individually and
as Agent for Lenders.
Name and Class Stock Number Minority
Address of Certificate of Shares
of Pledgor Stock Issuer Stock Numbers(s) Shares Outstanding
---------- ------------ ----- ----------- ------ -----------
River Hills Wilsons, Inc. Bermans The Common 5 100 --
0000 Xxxxx Xxxxxx North Leather Experts,
Xxxxxxxx Xxxx, XX 00000 Inc.
Wilsons House of Common 3 30 --
Suede, Inc.
Wilsons Leather Common 2 100 --
Holdings Inc.
SCHEDULE II
FORM OF PLEDGE AMENDMENT
------------------------
This Pledge Amendment, dated May 25, 1996 is delivered pursuant to
Section 6(d) of the Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to that certain Pledge
Agreement, dated May 25, 1996 by the undersigned, as Pledgor, to Melville
Corporation and that the Pledged Shares listed on this Pledge Amendment shall be
and become a part of the Pledged Collateral referred to in said Pledge Agreement
and shall secure all Secured Obligations referred to in said Pledge Agreement.
RIVER HILLS WILSONS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
Name and Address Class of Certificate Number of
of Pledgor Issuer Stock Number(s) Shares
---------- ------ ----- --------- ------
