EXHIBIT 10.28
SECURITY AGREEMENT--STOCK PLEDGE
THIS SECURITY AGREEMENT--STOCK PLEDGE (as may hereafter be amended,
supplemented or restated from time-to-time in accordance with the terms hereof,
this "Agreement"), dated as of January 1, 1999 is entered into by and between
THE CHILDREN'S PLACE RETAIL STORES, INC., a Delaware corporation ("Pledgor"),
and FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), in
light of the following facts:
R E C I T A L S
A. Pledgor and Foothill are parties to that certain Amended and Restated
Loan and Security Agreement, dated as of July 31, 1997 (as may hereafter be
amended, supplemented or restated from time-to-time in accordance with the terms
thereof, the "Loan Agreement");
B. Pledgor is the record owner of 1000 shares of the Common Stock of TCPIP
HOLDING COMPANY, INC., a corporation organized under the laws of Delaware (the
"Company"); and
C. Pursuant to the terms of the Loan Agreement, Pledgor and Foothill are
entering into this Agreement as additional security for the Obligations (as
defined in the Loan Agreement).
A G R E E M E N T
NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. All initially capitalized terms used but not defined
in this Agreement shall have the meanings assigned to such terms in the
Loan Agreement. In addition, the following terms, as used in this
Agreement, have the following meanings:
"Bankruptcy Code" means Bankruptcy Reform Act of 1978 (11 U.S.C. Sections
101-1330), as amended or supplemented from time to time, and any
successor statute, and any and all rules issued or promulgated in
connection therewith.
"Code" means the California Uniform Commercial Code, as amended and
supplemented from time to time, and any successor statute.
"Collateral" means all of the following:
(i) 1000 shares of the outstanding Common Stock of the Company which
shares constitutes 100% of the capital stock of the Company and all
of the hereafter-acquired shares of Common Stock of the Company in
which Pledgor has an interest at any time while this Agreement is in
effect (the "Shares");
(ii) All of Pledgor's presently existing and hereafter arising stock
subscription warrants, stock options, or other rights to the
Company's capital stock and all rights represented thereby (the
"Options"); and
(iii) The proceeds of each of the foregoing, including any and all
dividends, cash, stock, instruments, and other property from time to
time received, receivable, or otherwise distributed in respect of or
in exchange for the Shares or Options (the "Proceeds").
"Event of Default" has the meaning given to such term in Section 10.
"Secured Obligations" means the Obligations (as defined in the Loan
Agreement) and the obligations of Pledgor hereunder.
"33 Act" means the Securities Act of 1933, as amended and supplemented
from time to time, and any successor statute, and any and all rules
promulgated in connection therewith.
1.2 CONSTRUCTION. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, references to
the singular include the plural, and the term "including" is not
limiting. The words "hereof," "herein," "hereby," "hereunder," and other
similar terms refer to this Agreement as a whole and not to any
particular provision of this Agreement. Any reference herein to any
document includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as
applicable. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against Foothill or Pledgor,
whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by Pledgor, Foothill, and their
respective counsel, and shall be construed and interpreted according to
the ordinary meaning of the words used so as to fairly accomplish the
purposes and intentions of Foothill and Pledgor.
2. PLEDGE. As security for the prompt and complete payment and performance
of the Secured Obligations, Pledgor hereby delivers, pledges, and grants to
Foothill a continuing security interest in all of Pledgor's now-owned or
hereafter-acquired right, title, and interest in and to the Collateral. All
certificates or instruments representing or evidencing the Collateral shall be
delivered promptly to and held by Foothill pursuant hereto and shall be in
suitable form for transfer or assignment in blank, all in form and substance
satisfactory to Foothill.
3. FURTHER ASSURANCES. Pledgor agrees that it shall cooperate with
Foothill and shall execute and deliver, or cause to be executed and delivered,
to Foothill all stock powers, proxies, assignments, financing statements,
instruments, and other documents, and shall take all further action, at the
expense of Pledgor, from time to time requested by Foothill, in order to
maintain a continuing, first-priority, perfected security interest in the
Collateral in favor of Foothill, and to enable Foothill to exercise and enforce
its rights and remedies hereunder with respect to the Collateral, and Pledgor
agrees that it shall execute and deliver to Foothill at Foothill's request any
further applications, agreements, documents and instruments, and shall perform
any and all acts deemed necessary by Foothill to carry into effect the terms,
conditions, and provisions of this Agreement and the transactions connected
herewith. Should Pledgor fail to execute or deliver any such applications,
agreements, documents, financing statements and instruments, or to perform any
such acts, Pledgor acknowledges that Foothill may execute and deliver the same
and perform such acts in the name of Pledgor and on its behalf as its
attorney-in-fact in accordance with Section 13.
4. FOOTHILL'S DUTIES. Foothill shall not have any duties with respect to
the Collateral other than the duty to use reasonable care if the Collateral is
in its possession. In accordance with Section 9207 of the Code, Foothill shall
be deemed to have used reasonable care if it observes substantially the same
standard of care with respect to the custody or preservation of the Collateral
as it observes with respect to similar assets owned by Foothill. Without
limiting the generality of the foregoing, Foothill shall not be under any
obligation to take any steps to preserve rights in the Collateral against any
other parties, to sell the same if it threatens to decline in value, or to
exercise any rights represented thereby (including rights with respect to calls,
conversions, exchanges, maturities, or tenders); PROVIDED, HOWEVER, that
Foothill may, at its option, do so, and any and all expenses incurred in
connection therewith shall be for the account of Pledgor.
5. VOTING RIGHTS; DIVIDENDS; ETC. During the term of this Agreement, and
as long as no Event of Default has occurred and is continuing:
5.1 Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Shares or any part thereof;
PROVIDED, HOWEVER, no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be
inconsistent with the terms of this Agreement, the Loan Agreement or any
other instrument or agreement referred to therein or herein, or which
could have the effect of impairing the value of the Collateral or any
part thereof or the position or interest of Foothill therein.
5.2 Pledgor shall be entitled to receive and retain any and all dividends
and distributions paid in respect of the Shares; provided, however,
that any and all:
(a) dividends and distributions paid or payable other than in cash in
respect of, and any and all additional shares or instruments or other
property received, receivable, or otherwise distributed in respect
of, or in exchange for the Shares;
(b) dividends and distributions paid or payable in cash in respect of
any Shares in connection with a partial or total liquidation or
dissolution, merger, consolidation of the Company, or any exchange of
stock, conveyance of assets, or similar corporate reorganization; and
(c) cash paid with respect to, payable, or otherwise distributed on
redemption of, or in exchange for any Shares,
shall be forthwith delivered to Foothill to hold as Collateral and
shall, if received by Pledgor, be received in trust for the benefit
of Foothill, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to Foothill as Collateral in the
same form as so received (with any necessary endorsement), and, if
deemed appropriate by Foothill, Pledgor shall take such actions,
including the actions described in Section 2, as Foothill may
require.
6. REPRESENTATIONS, WARRANTIES, AND COVENANTS. Pledgor warrants,
represents, and covenants that:
6.1 Pledgor is a corporation duly organized, validly existing and in good
standing under the laws of Delaware.
6.2 The execution, delivery and performance of this Agreement are within
Pledgor's powers, are not in conflict with the terms of the
Certificate of Incorporation or By-Laws or other organizational agreement
or instrument of Pledgor, and will not result in a breach of or
constitute a default under any material contract, obligation, indenture
or other instrument to which Pledgor is a party or by which Pledgor is
bound; and there is no material law, rule or regulation, nor is there any
judgment, decree or order of any court or governmental authority binding
on Pledgor which would be contravened by the execution, delivery,
performance or enforcement of this Agreement.
6.3 Pledgor has taken all corporate action necessary to authorize the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby and thereby. Upon its execution and
delivery in accordance with the terms hereof, this Agreement will
constitute legal, valid and binding agreements and obligations of
Pledgor, enforceable against Pledgor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, and similar
laws and equitable principles affecting the enforcement of creditors'
rights generally.
6.4 Other than United States federal laws and state and securities laws
and rules, there are no restrictions upon the transfer of any of the
Collateral to or by Foothill; Pledgor is the sole beneficial owner of the
Collateral, and Pledgor has the right to pledge and grant a security
interest in or otherwise transfer such Collateral free of any
encumbrances or rights of third parties, except for Permitted Liens.
6.5 All of the Collateral shall remain free from all liens, claims,
encumbrances, and purchase-money or other security interests except
as created hereby. Pledgor shall not, without Foothill's prior written
consent, sell or otherwise dispose of any of the Collateral.
6.6 The execution and delivery of this Agreement, and the delivery to
Foothill of the certificate evidencing the Shares creates a valid,
perfected, and first-priority security interest in the Collateral in
favor of Foothill, and all actions necessary or desirable to such
perfection have been duly taken.
6.7 No authorization or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either: (a)
for the grant by Pledgor of the security interest granted hereby or for
the execution, delivery, or performance of this Agreement by Pledgor; (b)
for the perfection of or exercise by Foothill of its rights and remedies
hereunder (except as may have been taken by or at the direction of
Pledgor or as may be required in connection with a disposition of the
Collateral by laws affecting the offering and sale of securities
generally); or (c) for the exercise by Foothill of the voting or other
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement (except as may be required in
connection with a disposition of the Collateral by laws affecting the
offering and sale of securities generally) and any applicable antitrust
laws.
6.8 The Company presently has issued and outstanding 1000 shares of
Common Stock, which shares are owned by Pledgor.
6.9 There are no presently existing Options.
6.10 The Shares has been duly and validly issued by the Company, and it
is fully paid and nonassessable.
6.11 The Company shall engage exclusively in the activities set forth on
Exhibit "A" attached hereto. The assets of the Company are free and
clear of liens, claims and encumbrances, and the Company shall not allow
any liens, claims or encumbrances on any of its assets. The Company does
not have any indebtedness outstanding, nor will it incur any indebtedness
so long as this Agreement remains in effect.
6.12 Pledgor has made its own arrangements for keeping informed of
changes or potential changes affecting the Collateral (including, but
not limited to, rights to convert, rights to subscribe, payment of
dividends, reorganization or other exchanges, tender offers, and voting
rights), and Pledgor agrees that Foothill shall not have any
responsibility or liability for informing Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action
with respect thereto.
7. SHARE ADJUSTMENTS. In the event that during the term of this Agreement,
any reclassification, readjustment, or other change is declared or made in the
capital structure of the Company, or any Option is exercised, all new
substituted and additional shares, options, or other securities, issued or
issuable to Pledgor by reason of any such change or exercise shall be delivered
to and held by Foothill under the terms of this Agreement in the same manner as
the Collateral originally pledged hereunder.
8. OPTIONS. In the event that during the term of this Agreement Options
shall be issued or exercised in connection with the Collateral, such Options
acquired by Pledgor shall be immediately assigned by Pledgor to Foothill and all
new shares or other securities so acquired by Pledgor shall also be immediately
assigned to Foothill to be held under the terms of this Agreement in the same
manner as the Collateral originally pledged hereunder.
9. CONSENT. Pledgor hereby consents that, from time to time, before or
after the occurrence or existence of any Event of Default, with or without
notice to or assent from Pledgor, any other security at any time held by or
available to Foothill for any of the Secured Obligations or any other security
at any time held by or available to Foothill or any other person, firm, or
corporation secondarily or otherwise liable for any of the Secured Obligations,
may be exchanged, surrendered, or released and any of the Secured Obligations
may be changed, altered, renewed, extended, continued, surrendered, compromised,
waived, or released, in whole or in part, as Foothill may see fit. Pledgor shall
remain bound under this Agreement notwithstanding any such exchange, surrender,
release, alteration, renewal, extension, continuance, compromise, waiver, or
inaction, or extension of further credit.
10. EVENT OF DEFAULT. The occurrence of an Event of Default under, and as
defined in, the Loan Agreement shall constitute an event of default ("Event of
Default") under this Agreement.
11. REMEDIES UPON DEFAULT. Upon the occurrence and continuance of an Event
of Default, Foothill shall have, in addition to any other rights given by law or
in this Agreement, in the Loan
Agreement, or in any other agreement between Foothill and Pledgor, all of the
rights and remedies with respect to the Collateral of a secured party under the
Code, and also shall have, without limitation, the following rights, which
Pledgor hereby agrees to be commercially reasonable:
11.1 to transfer all or any part of the Collateral into the Foothill's
name or the name of its nominee or nominees;
11.2 all rights of Pledgor to exercise the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to
Section 5.1 and to receive the dividends and distributions that it would
otherwise be authorized to receive and retain pursuant to Section 5.2
shall, at Foothill's option, cease, and all such rights shall, at
Foothill's option, thereupon become vested in Foothill, and Foothill
shall, at its option, thereupon have the sole right to exercise such
voting and other consensual rights and to receive and hold as Collateral
such dividends and interest payments. Any payments received by Pledgor
contrary to the provisions of this Section shall be held in trust by
Pledgor for the benefit of Foothill, shall be segregated from other funds
of Pledgor, and shall be promptly paid over to Foothill, with any
necessary endorsement;
11.3 to vote the Shares (whether or not transferred into the name of the
Foothill), and give all consents, waivers and ratifications in
respect of the Collateral and otherwise act with respect thereto as
though it were the outright owner thereof; PLEDGOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS FOOTHILL THE PROXY AND ATTORNEY-IN-FACT OF
PLEDGOR, COUPLED WITH AN INTEREST, WITH FULL POWER OF SUBSTITUTION TO DO
SO; SUCH PROXY SHALL CONTINUE IN FULL FORCE AND EFFECT AND TERMINATE UPON
THE SOONER TO OCCUR OF: (A) THE INDEFEASIBLE PAYMENT IN FULL OF THE
SECURED OBLIGATIONS; AND (B) JANUARY 31, 2010.
11.4 at any time or from time to time, to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of
credit risk, and for such price or prices and on such terms as the
Foothill in its absolute discretion may determine; PROVIDED, that at
least five days notice of the time and place of any such sale shall be
given to Pledgor. Foothill shall not be obligated to make any such sale
of Collateral regardless of whether any such notice of sale has therefore
been given. Pledgor hereby waives any other requirement of notice,
demand, or advertisement for sale, to the extent permitted by law.
Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling
the Collateral and any other security for the Secured Obligations or
otherwise. At any such sale, unless prohibited by applicable law,
Foothill may bid for and purchase all or any part of the Collateral so
sold free from any such right or equity of redemption. Foothill shall not
be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall Foothill be under any
obligation to take any action whatsoever with regard thereto;
11.5 to buy the Collateral, in its own name, or in the name of a designee
or nominee. Foothill shall have the right to execute any document or
form, in its name or in the name of the Pledgor, that may be necessary or
desirable in connection with such sale of the Collateral.
11.6 to sell the Collateral by a private placement, restricting bidders
and prospective purchasers to those who will represent and agree that
they are purchasing for investment only and not for distribution. In so
doing, Foothill may solicit offers to buy the Collateral, or any part of
it for cash, from a limited number of investors deemed by Foothill, in
its reasonable credit judgment, to be responsible parties who might be
interested in purchasing the Collateral. If Foothill shall solicit such
offers from not less than four (4) such investors, then the acceptance
by Foothill of the highest offer obtained therefor shall be deemed to be
a commercial reasonable method of disposition of such Collateral, even
though the sales price established and/or obtained may be substantially
less than the price that would be obtained pursuant to a public offering.
Notwithstanding the foregoing, should Foothill determine that, prior to
any public offering of any securities contained in the Collateral, such
securities should be registered under the "33 Act and/or registered or
qualified under any other United States federal or state law, and that
such registration and/or qualification is not practical, Pledgor agrees
that it will be commercially reasonable if a private sale is arranged so
as to avoid a public offering even if offers are solicited from fewer
than four investors, and even though the sales price established and/or
obtained may be substantially less than the price that would be obtained
pursuant to a public offering.
12. INDEFEASIBLE PAYMENT. The Secured Obligations shall not be considered
indefeasibly paid for purposes of this Agreement unless and until all payments
to Foothill are no longer subject to any right on the part of any Person,
including Pledgor, Pledgor as a debtor in possession, or any trustee (whether
appointed under the Bankruptcy Code or otherwise) of Pledgor or any of Pledgor's
Assets, to invalidate or set aside such payments or to seek to recoup the amount
of such payments or any portion thereof, or to declare same to be fraudulent or
preferential. In the event that, for any reason, any portion of such payments to
Foothill is set aside or restored, whether voluntarily or involuntarily, after
the making thereof, then the obligation intended to be satisfied thereby shall
be revived and continued in full force and effect as if said payment or payments
had not been made.
13. FOOTHILL AS PLEDGOR'S ATTORNEY-IN FACT. Pledgor hereby irrevocably
appoints Foothill as its attorney-in-fact to arrange for the transfer, at any
time after the occurrence and during the continuance of an Event of Default, of
the Collateral on the books of the Company to the name of Foothill or to the
name of Foothill's nominee. Pledgor further authorizes Foothill to perform any
and all acts which Foothill deems necessary for the protection and preservation
of the Collateral or of the value of Foothill's security interest therein,
including but not limited to receiving income thereon as additional security
hereunder, all at Pledgor's expense, and Pledgor agrees to repay Foothill
promptly upon demand any amounts expended hereunder by Foothill, together with
interest thereon. Pledgor further grants to Foothill a power of attorney coupled
with an interest to execute all agreements, forms, applications, documents and
instruments and to take all actions and do all things as could be executed,
taken, or done by Pledgor in connection with the protection and preservation of
the Collateral or this Agreement if Pledgor does not timely do so. This power of
attorney is irrevocable and coupled with an interest, and authorizes Foothill to
act for Pledgor in connection with the matters described herein without notice
to or demand upon Pledgor.
14. GENERAL PROVISIONS.
14.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration herein of Foothill's rights and remedies is not intended to
be exclusive, and such rights and remedies are in addition to and not by
way of limitation of any other rights or remedies that the Foothill may
have under the Loan Agreement, the Loan Documents, the Code, or other
applicable law. Foothill shall have the right, in its sole discretion, to
determine which rights and remedies are to be exercised and in which
order. The exercise of one right or remedy shall not preclude the
exercise of any others, all of which shall be cumulative.
14.2 NO IMPLIED WAIVERS. No act, failure, or delay by Foothill shall
constitute a waiver of any of its rights and remedies. No single or
partial waiver by Foothill of any provision of this Agreement or any
other Loan Document, or of a breach or default hereunder or thereunder,
or of any right or remedy which Foothill may have, shall operate as a
waiver of any other provision, breach, default, right, or remedy or of
the same provision, breach, default, right, or remedy on a future
occasion. No waiver by Foothill shall affect its rights to require strict
performance of this Agreement.
14.3 NOTICES. All notices or demands by any party hereto to the other
party and relating to this Agreement shall be sent in accordance with the
terms of Section 12 of the Loan Agreement.
14.4 SUCCESSORS AND ASSIGNS. This Agreement shall bind the successors
and assigns of Pledgor, and shall inure to the benefit of the successors
and assigns of Foothill; provided, however, that Pledgor may not assign
this Agreement nor delegate any of its duties hereunder without
Foothill's prior written consent and any prohibited assignment shall be
absolutely void. Foothill may assign this Agreement and its rights and
duties hereunder and no consent or approval by Pledgor is required in
connection with any such assignment. Foothill reserves the right to sell,
assign, transfer, negotiate, or grant participations in all or any part
of, or any interest in Foothill's rights and benefits hereunder.
14.5 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire
Agreement.
14.6 AMENDMENTS IN WRITING. This Agreement cannot be changed or
terminated orally, but only by a writing signed by each party hereto. All
prior agreements, understandings, representations, warranties, and
negotiations, if any, are merged into this Agreement.
14.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, shall
be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as
effective as delivery of a manually executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement
by telefacsimile also shall deliver a manually executed counterpart of
this Agreement but the failure to deliver a manually executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Agreement.
14.8 TERMINATION BY FOOTHILL. After termination of the Loan Agreement
and when Foothill has received payment and performance, in full, of the
Secured Obligations, Foothill shall execute and deliver to Pledgor a
termination of all of the security interests granted by Pledgor hereunder
and, to the extent they have been delivered to Foothill and not disposed
of in accordance with this Agreement, certificates evidencing the Shares.
14.9 GOVERNING LAW; SEVERABILITY OF PROVISIONS. This Agreement shall be
deemed to have been made in the State of California and the validity,
enforceability, construction, interpretation and enforcement of this
Agreement and the rights of the parties hereto shall be determined under,
governed by and construed in accordance with the laws of the State of
California without regard to the principles of conflicts of law;
provided, however, the respective rights of the parties hereto in the
Collateral, including voting the Shares, transfer of the Shares and proxy
rights, shall be governed by the corporate laws of the State of
California to the extent such law is applicable to such rights. If any
provision of this Agreement or its exhibits shall be determined to be
invalid, void or illegal, such provision shall be construed and amended
in a manner which would permit its enforcement, but in no event shall
such provision affect, impair or invalidate any other provision hereof.
14.10 JURISDICTION AND VENUE; WAIVER OF JURY TRIAL. THE PARTIES HERETO
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE OR FEDERAL COURT
LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA. THE PARTIES
HERETO HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION, CAUSE OF ACTION OR PROCEEDING ARISING UNDER OR WITH
RESPECT TO OR IN ANY WAY RELATED TO THIS AGREEMENT. THE PARTIES HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION OF THE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE OTHER PARTY HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL BY
JURY.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
THE CHILDREN'S PLACE
RETAIL STORES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
TITLE: CHAIRMAN/CEO
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
TITLE: ASSISTANT VICE PRESIDENT
EXHIBIT "A" TO SECURITY AGREEMENT--STOCK PLEDGE
The Company shall engage exclusively in the following activities:
(a) to acquire, own, hold, sell, transfer, pledge, assign, license or
otherwise dispose of any trademark, service ▇▇▇▇, registration thereof or
application for registration therefor, trade name, copyright, copyright
registration, application for copyright registration, or any other
similar type of intellectual property right (the "Intellectual
Property");
(b) to manage and maintain valid, binding and enforceable rights to use the
Intellectual Property;
(c) te defend against any challenges to the right of the Company or any of
its licensees to use the Intellectual Property;
(d) to collect and distribute the income from such Intellectual Property or
from tangible property physically located outside Delaware, all as
defined in, and in such manner as to qualify for exemption from income
taxation under, Section 1902(b)(8) of Title 30 of the Delaware Code, or
under the corresponding provision of any subsequent law;
(e) to negotiate, authorize, execute, deliver, assume the obligations under,
and perform, any agreement or instrument or document relating to the
activities set forth in clause (a) through (d) above; and
(f) to engage in any activity and to exercise any powers permitted to
corporations under the General Corporation Laws of the State of Delaware
that are related or incidental to the foregoing and necessary, convenient
or advisable to accomplish the foregoing. The Company shall not engage in
any business or activity other than in connection with or relating to the
activities described above.
