EXHIBIT 10.14
PLEDGE AGREEMENT dated as of December 9, 1996 among BRYLANE,
L.P., a Delaware limited partnership (the "Borrower"), such
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subsidiaries of the Borrower as shall become parties hereto
pursuant to Section 5.16 hereof (collectively, the "Subsidiary
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Pledgors"; the Borrower and the Subsidiary Pledgors being
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collectively called the "Pledgors"); and ▇▇▇▇▇▇ GUARANTY TRUST
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COMPANY OF NEW YORK, as security agent (in such capacity, the
"Security Agent") for the Secured Parties, as defined herein.
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Reference is made to the Credit Agreement dated as of December 9, 1996
(as amended from time to time, the "Credit Agreement"), among the Borrower, the
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Lenders party thereto (the "Lenders"), ▇▇▇▇▇▇ Guaranty Trust Company of New
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York, as administrative agent (in such capacity, the "Agent") and ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Capital Corporation, as documentation agent (in such capacity, the
"Documentation Agent"). The Lenders have agreed to extend credit to the
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Borrower pursuant to, and subject to the terms and conditions specified in, the
Credit Agreement. The obligations of the Lenders to extend credit under the
Credit Agreement are conditioned upon, among other things, the execution and
delivery by the Pledgors of a pledge agreement in the form hereof to secure (a)
the due and punctual payment by the Borrower of (i) the principal of and
interest on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise; (ii) each payment
required to be made by the Borrower under the Credit Agreement in respect of any
Letter or Letters of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash
collateral, (iii) all other monetary obligations of the Borrower to the Secured
Parties under the Credit Agreement and the other Loan Documents to which the
Borrower is or is to be a party and (iv) each payment required to be made by the
Borrower under any Rate
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Protection Agreement entered into by the Borrower with a counterparty that was a
Lender at the time such Rate Protection Agreement was entered into; (b) the due
and punctual performance of all other obligations of the Borrower under the
Credit Agreement and the other Loan Documents to which the Borrower is or is to
be a party and (c) the due and punctual payment and performance of all
obligations of each Subsidiary under the Loan Documents to which it is or is to
be a party (all the foregoing obligations being collectively called the
"Obligations").
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Accordingly, the Pledgors and the Security Agent hereby agree as
follows:
ARTICLE I
Definitions
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SECTION 1.01. Terms Defined in the Credit Agreement. Terms used
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herein and not otherwise defined herein shall have the meanings set forth in the
Credit Agreement.
SECTION 1.02. Definition of Certain Terms Used Herein. As used
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herein, the following terms shall have the following meanings:
"Collateral" shall have the meaning assigned to such term in Section
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2.01.
"Credit Agreement" shall have the meaning assigned to such term in the
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preliminary statement of this Agreement.
"Federal Securities Laws" shall have the meaning assigned to such term
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in Section 4.03.
"Obligations" shall have the meaning assigned to such term in the
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preliminary statement of this Agreement.
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"Pledged Notes" shall have the meaning assigned to such term in
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Section 2.01.
"Pledged Securities" shall mean the Pledged Stock, the Pledged Notes,
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all other shares of capital stock, debt securities and other securities
(including warrants, options and similar rights to acquire securities) now or
hereafter included in the Collateral and all stock certificates and other
instruments evidencing any such securities.
"Pledged Stock" shall have the meaning assigned to such term in
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Section 2.01.
"Secured Parties" shall mean (a) the Lenders party to the Credit
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Agreement; (b) each counterparty to a Rate Protection Agreement entered into
with the Borrower, if such counterparty was a Lender at the time such Rate
Protection Agreement was entered into; (c) the Agent, the Security Agent, the
Issuing Banks and the Documentation Agent, in their capacities as such under
each Loan Document; (d) the beneficiaries of each indemnification obligation
undertaken by any Pledgor under any Loan Document; and (e) the successors and
assigns of the foregoing.
ARTICLE II
Pledge
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SECTION 2.01. Pledge. As security for the payment or performance, as
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the case may be, of the Obligations, each Pledgor hereby bargains, sells,
conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to
the Security Agent, its successors and its assigns, for the benefit of the
Secured Parties, and hereby grants to the Security Agent, its successors and
assigns, for the benefit of the Secured Parties, a security interest in, all of
such Grantor's right, title and interest in, to and under (a) the shares of
capital stock listed opposite the name of such Pledgor on Schedule I hereto and
all shares
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of the capital stock of any Subsidiary hereafter acquired by such Pledgor (the
"Pledged Stock") and the certificates representing the Pledged Stock; (b) the
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promissory notes listed opposite the name of such Pledgor on Schedule I hereto
and all promissory notes or other debt securities of any Subsidiary hereafter
acquired by such Pledgor (the "Pledged Notes") and the certificates representing
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the Pledged Notes; (c) all other property which may be delivered to and held by
the Security Agent pursuant to the terms hereof; (d) subject to Section 2.04,
all payments of dividends, cash, instruments and other property from time to
time received, receivable or otherwise distributed, in respect of, in exchange
for or upon the conversion of the securities referred to in clauses (a), (b) and
(c) above; (e) subject to Section 2.04, all rights and privileges of such
Pledgor with respect to the securities and other property referred to in clauses
(a), (b), (c) and (d) above; and (f) all proceeds of any of the foregoing (the
items referred to in clauses (a) through (f) being collectively called the
"Collateral").
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TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and references pertaining or incidental thereto,
unto the Security Agent, its successors and its assigns, for the benefit of the
Secured Parties, forever; subject, however, to the terms, covenants and
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conditions hereinafter set forth.
SECTION 2.02. Delivery of the Collateral; Intercompany Obligations.
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(a) Upon delivery to the Security Agent, (i) the Pledged Securities shall be
accompanied by stock powers duly executed in blank or other instruments of
transfer satisfactory to the Security Agent and by such other instruments and
documents as the Security Agent may reasonably request and (ii) all other
property comprising part of the Collateral shall be accompanied by proper
instruments of assignment duly executed by the applicable Pledgor and such other
instruments or documents as the Security Agent may reasonably request. Each
delivery
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of Pledged Securities shall be accompanied by a schedule describing the
securities theretofore and then being pledged hereunder, which schedule shall be
attached hereto as Schedule I and made a part hereof. Each schedule so deliv-
ered shall supersede any prior schedules so delivered.
(b) Each of the Pledgors agrees to promptly deliver or cause to be
delivered to the Security Agent any and all Pledged Securities, and any and all
certificates or other instruments or documents representing the Collateral.
(c) Each Pledgor will cause any obligations in respect of borrowed
money or similar advances owed to such Pledgor by the Borrower or any Subsidiary
to be evidenced by a duly executed promissory note which is pledged and
delivered to the Security Agent pursuant to the terms hereof. Any such
promissory notes may be in the form of a demand note for any and all moneys
advanced.
SECTION 2.03. Registration in Nominee Name; Denominations. The
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Security Agent shall have the right (in its sole and absolute discretion) to
hold the Pledged Securities in its own name as pledgee, the name of its nominee
or the name of the applicable Pledgor, endorsed or assigned in blank or in favor
of the Security Agent. Each of the Pledgors will promptly give to the Security
Agent copies of any notices or other communications received by it with respect
to Pledged Securities registered in the name of such Pledgor. The Security
Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
SECTION 2.04. Voting Rights; Dividends and Interest; etc. (a)
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Unless and until an Event of Default shall have occurred and be continuing and
the Security Agent
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shall have notified the Pledgors that their rights under this Section 2.04 are
being suspended:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers accruing to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms of
this Agreement, the Credit Agreement and the other Loan Documents;
provided, however, that such action would not materially and adversely
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affect the rights inuring to a holder of the Pledged Securities or the
rights and remedies of the Security Agent or any of the Secured Parties
under this Agreement or the Credit Agreement or any other Loan Document or
the ability of the Security Agent or any of the Secured Parties to exercise
the same.
(ii) The Security Agent shall execute and deliver to each Pledgor,
or cause to be executed and delivered to such Pledgor, all such proxies,
powers of attorney and other instruments as such Pledgor may reasonably
request for the purpose of enabling such Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any and
all dividends and principal and interest payments paid in cash on the
Pledged Securities pledged by it to the extent and only to the extent that
such cash dividends and principal and interest payments are permitted by,
and otherwise paid in accordance with, the terms and conditions of the
Credit Agreement, the other Loan Documents and applicable laws. Other than
(A) pursuant to the first sentence of this paragraph (a)(iii) or (B)
pursuant to a distribution or transfer of any of the assets of a Subsidiary
Pledgor to the Borrower or to a Subsidiary Pledgor that is a Wholly Owned
Consolidated Subsidiary in a transaction permitted under the Credit
Agreement,
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all noncash dividends and principal and interest payments, and all
dividends paid or payable in cash or otherwise in connection with a partial
or total liquidation or dissolution, return of capital, capital surplus or
paid-in surplus, and all other distributions made on or in respect of
Pledged Securities, whether paid or payable in cash or otherwise, whether
resulting from a subdivision, combination or reclassification of the
outstanding capital stock of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party
or otherwise, shall be and become part of the Collateral, and, if received
by a Pledgor, shall not be commingled by such Pledgor with any of its other
funds or property but shall be held separate and apart therefrom, shall be
held in trust for the benefit of the Security Agent and shall be forthwith
delivered to the Security Agent in the same form as so received (with any
necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, after the Security Agent shall have notified the Pledgors of the
suspension of their rights under paragraph (a)(iii) above, then all rights of
any Pledgor to receive dividends and principal and interest payments which such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the Security Agent,
which shall have the sole and exclusive right and authority to receive and
retain such dividends, interest and principal payments. All dividends and
principal and interest payments which are received by any Pledgor contrary to
the provisions of this Section 2.04 shall be received in trust for the benefit
of the Security Agent, shall be segregated from other property or funds of such
Pledgor and shall be forthwith delivered to the Security Agent in the same form
as so received (with any necessary endorsement). Any and all money and other
property paid over to or
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received by the Security Agent pursuant to the provisions of this paragraph (b)
shall be retained by the Security Agent in an account to be established by the
Security Agent upon receipt of such money or other property and shall be applied
in accordance with the provisions of Section 4.02.
(c) Upon the occurrence and during the continuance of an Event of
Default, after the Security Agent shall have notified the Pledgors of the
suspension of their rights under paragraph (a)(i) above, then all rights of the
Pledgors to exercise the voting and consensual rights and powers which they are
entitled to exercise pursuant to paragraph (a)(i) of this Section 2.04, and the
obligations of the Security Agent under paragraph (a)(ii) of this Section 2.04,
shall cease, and all such rights shall thereupon become vested in the Security
Agent, which shall have the sole and exclusive right and authority to exercise
such voting and consensual rights and powers.
(d) Any notice given by the Security Agent to the Pledgors suspending
their rights under paragraph (a) above (i) may be given by telephone if promptly
confirmed in writing, (ii) may be given to one or more of the Pledgors at the
same or different times and (iii) may suspend the rights of the Pledgors under
paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such
rights (as specified by the Security Agent in its sole and absolute discretion)
and without waiving or otherwise affecting the Security Agent's rights to give
additional notices from time to time suspending other rights so long as an Event
of Default has occurred and is continuing.
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ARTICLE III
Representations, Warranties and Covenants
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The Pledgors jointly and severally represent, warrant and covenant to
and with the Security Agent and the Lenders that:
(a) the Pledged Stock and Pledged Notes represent all the outstanding
capital stock of each Subsidiary that is a corporation and all the
outstanding indebtedness of each Subsidiary owed to the Borrower or to
another Subsidiary;
(b) the Pledged Stock has been duly and validly authorized and issued
by the issuers thereof and is fully paid and nonassessable;
(c) except for the security interest granted hereunder, each of the
Pledgors (i) is and will at all times continue to be the direct owner,
beneficially and of record, of the Pledged Securities indicated on Schedule
I to be owned by such Pledgor, (ii) holds the same free and clear of all
Liens (other than unperfected Liens imposed by law) or security interests
of any other Person, (iii) will make no assignment, pledge, hypothecation
or transfer of, or create any security interest in, the Collateral, other
than pursuant hereto, and (iv) subject to Section 2.04, will cause any and
all Collateral, whether for value paid by any Pledgor or otherwise, to be
forthwith deposited with the Security Agent and pledged or assigned
hereunder;
(d) except for restrictions and limitations imposed by securities laws
generally, the Collateral pledged hereunder is and will be freely
transferable and assignable, and no portion of such Collateral is or will
be subject to any option, right of first refusal, shareholders agreement,
charter or by-law provision,
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partnership agreement restriction or other contractual restriction of any
nature which might prohibit, impair, delay or otherwise affect the pledge
of such Collateral hereunder, the sale or disposition of the Collateral
pursuant hereto after the occurrence of an Event of Default or the exercise
by the Security Agent of its rights and remedies hereunder;
(e) each of the Pledgors (i) has the power and authority to pledge the
Collateral pledged by it hereunder in the manner hereby done or
contemplated and (ii) will defend its title or interest thereto or therein
against any and all Liens (other than the Lien of this Agreement), however
arising, of all persons whomsoever;
(f) no consent or approval of any Governmental Authority or any
securities exchange was or is necessary to the validity of the pledge
effected hereby;
(g) by virtue of the execution and delivery by the Pledgors of this
Agreement, when the Pledged Securities, certificates, instruments or other
documents representing or evidencing the Collateral are delivered to the
Security Agent in accordance with this Agreement, the Security Agent will
obtain a legal, valid and perfected first priority security interest in the
Pledged Securities as security for the payment and performance of the
Obligations; and
(h) the pledge effected hereby is effective to vest in the Security
Agent, on behalf of the Secured Parties, the rights of the Security Agent
in the Collateral as set forth herein.
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ARTICLE IV
Remedies
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SECTION 4.01. Remedies upon Default. If an Event of Default shall
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have occurred and be continuing, the Security Agent may exercise, to the extent
permitted by law, all the rights of a secured party under the Uniform Commercial
Code of the State of New York (whether or not the Code is in effect in the
jurisdiction where such rights are exercised) and, in addition, the Security
Agent may, without being required to give any notice, except as herein provided
or as may be required by mandatory provisions of law, sell the Collateral, or
any part thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Security Agent shall deem appropriate. The Security Agent shall be authorized
at any such sale (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such sale
the Security Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Pledgor, and each Pledgor hereby waives (to the extent
permitted by law) all rights of redemption, stay, valuation and appraisal which
such Pledgor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
The Security Agent shall give each Pledgor at least 10 days' prior
written notice (which each Pledgor agrees is reasonable notice within the
meaning of Section 9-504(3) of the Uniform Commercial Code as in effect in the
State of New York or its equivalent in other jurisdictions) of the Security
Agent's intention to make any sale of Collateral owned by such Pledgor. Such
notice, in
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the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange and, in the case of a private sale, shall state the time after which
any such sale is to be made. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the Security
Agent may fix and state in the notice of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Security Agent may (in its sole and absolute
discretion) determine. The Security Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The Security
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case any sale of all or
any part of the Collateral is made on credit or for future delivery, the
Collateral so sold may be retained by the Security Agent until the sale price is
paid in full by the purchaser or purchasers thereof, but the Security Agent
shall not incur any liability in case any such purchaser or purchasers shall
fail to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may be sold again upon like notice. At any public sale
made pursuant to this Section any Secured Party may bid for or purchase, free
(to the extent permitted by law) from any right of redemption, stay, valuation
or appraisal on the part of any Pledgor (all said rights being also hereby
waived and released to the extent permitted by law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
Obligation then due and payable to it from any Pledgor as a credit against the
purchase price, and the Security Agent
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may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Pledgor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Security Agent shall be free to carry
out such sale pursuant to such agreement, and none of the Pledgors shall be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Security Agent shall have entered into
such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Security Agent may proceed by a suit or suits at
law or in equity to foreclose this Agreement and to sell the Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver.
SECTION 4.02. Application of Proceeds of Sale. The proceeds of any
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sale of Collateral pursuant to Section 4.01, as well as any Collateral
consisting of cash, shall be applied by the Security Agent as follows:
FIRST: to the payment of all costs and expenses incurred by the Agent
or the Security Agent (in its capacity as such hereunder or under any other
Loan Document) in connection with such sale or otherwise in connection with
this Agreement or any of the Obligations, including all court costs and the
fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Security Agent hereunder or under any other Loan
Document on behalf of any of the Pledgors and any other costs or expenses
incurred in connection with the exercise of any right or remedy hereunder
or under any other Loan Document;
SECOND: to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the amounts
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of the Obligations owed to them on the date of any such distribution); and
THIRD: to the Pledgors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Security Agent shall have absolute discretion as to the time of application
of any such proceeds, moneys or balances in accordance with this Agreement.
Upon any sale of the Collateral by the Security Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt of
the Security Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Security Agent or such officer or be
answerable in any way for the misapplication thereof.
SECTION 4.03. Securities Act, etc. In view of the position of the
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Pledgors in relation to the Pledged Securities, or because of other present or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
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disposition of the Pledged Securities permitted hereunder. The Pledgors
understand that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Security Agent if the Security Agent were to
attempt to dispose of all or any part of the Pledged Securities, and might also
limit the extent to which or the manner in which any subsequent transferee of
any Pledged Securities could dispose of the same. Similarly, there may be other
legal restrictions or limitations affecting the Security Agent in any attempt to
dispose of all or part of the Pledged Securities under applicable Blue Sky or
other state securities laws or
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similar laws analogous in purpose or effect. The Pledgors recognize that in
light of the foregoing restrictions and limitations the Security Agent may, with
respect to any sale of Pledged Securities, limit the purchasers to those who
will agree, among other things, to acquire Pledged Securities for their own
account, for investment, and not with a view to the distribution or resale
thereof. The Pledgors acknowledge and agree that in light of the foregoing
restrictions and limitations, the Security Agent, in its sole and absolute
discretion, (a) may proceed to make such a sale whether or not a registration
statement for the purpose of registering the Pledged Securities or part thereof
shall have been filed under the Federal Securities Laws, and (b) may approach
and negotiate with a single possible purchaser to effect such sale. The Pledgors
acknowledge and agree that any such sale might result in prices and other terms
less favorable to the seller than if such sale were a public sale without such
restrictions. In the event of any such sale, the Security Agent shall incur no
responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Security Agent, in its sole and absolute
discretion, may in good ▇▇▇▇▇ ▇▇▇▇ reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might have
been realized if the sale were deferred until after registration as aforesaid or
if more than a single purchaser were approached. The provisions of this Section
will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at
which the Security Agent sells.
SECTION 4.04. Registration, etc. Each of the Pledgors agrees that,
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upon the occurrence and during the continuance of an Event of Default, if for
any reason the Security Agent desires to sell any of the Pledged Securities at a
public sale, it will, at any time and from time to time, upon the written
request of the Security Agent, take or cause the issuer of such Pledged
Securities to take such action and prepare, distribute and/or file such
documents, as are required or advisable in the reasonable opinion of
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counsel for the Security Agent to permit the public sale of such Pledged
Securities. Each of the Pledgors jointly and severally agrees to (a) indemnify,
defend and hold harmless the Security Agent, the other Secured Parties and their
respective officers, directors, affiliates and controlling persons from and
against all losses, liabilities, expenses, costs (including the reasonable fees
and expenses of legal counsel to the Security Agent and the Agent) and claims
(including the costs of investigation) which they may incur insofar as any such
loss, liability, expense, cost or claim arises out of or is based upon any
alleged untrue statement of a material fact contained in any prospectus,
offering circular or similar document (or any amendment or supplement thereto),
or arises out of or is based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements in any thereof
not misleading, except insofar as the same may have been caused by any untrue
statement or omission based upon information furnished in writing to any Pledgor
or the issuer of such Pledged Securities by the Security Agent or any other
Secured Party expressly for use therein, and (b) enter into an indemnification
agreement with any underwriter of or placement agent for any Pledged Securities,
on its standard form, to substantially the same effect. Each of the Pledgors
further agrees to use all reasonable efforts to qualify, file or register, or
cause the issuer of such Pledged Securities to qualify, file or register, any of
the Pledged Securities under the Blue Sky or other securities laws of such
states as may be requested by the Security Agent and keep effective, or cause to
be kept effective, all such qualifications, filings or regis trations. The
Pledgors will jointly and severally bear all costs and expenses of carrying out
their obligations under this Section. The Pledgors acknowledge that there is no
adequate remedy at law for failure by them to comply with the provisions of this
Section and that such failure would not be adequately compensable in damages,
and therefore agree that their agreements contained in this Section may be
specifically enforced.
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ARTICLE V
Miscellaneous
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SECTION 5.01. Notices. All communications and notices hereunder
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shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 10.01 of the Credit Agreement. All communications and
notices hereunder to any Subsidiary Pledgor shall be given to it in care of the
Borrower at the address specified in the Credit Agreement for notices to the
Borrower thereunder.
SECTION 5.02. Security Interest Absolute. All rights of the Security
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Agent hereunder, the security interests granted hereunder and all obligations of
the Pledgors hereunder shall be absolute and unconditional irrespective of (a)
any lack of validity or enforceability of the Credit Agreement or any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or nonperfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the
Obligations or this Agreement.
SECTION 5.03. Survival of Agreement. All covenants, agreements,
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representations and warranties made by any Pledgor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and
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shall survive the making by the Lenders of the Loans, and the execution and
delivery to the Lenders of the Notes evidencing such Loans, regardless of any
investigation made by the Lenders or on their behalf, and shall continue in full
force and effect until this Agreement shall terminate.
SECTION 5.04. Binding Effect; Several Agreement. This Agreement
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shall become effective as to any Pledgor when a counterpart hereof executed on
behalf of such Pledgor shall have been delivered to the Security Agent and a
counterpart hereof shall have been executed on behalf of the Security Agent, and
thereafter shall be binding upon such Pledgor and the Security Agent and their
respective successors and assigns, and shall inure to the benefit of such
Pledgor, the Security Agent and the other Secured Parties and their respective
successors and assigns, except that no Pledgor shall have the right to assign
its rights hereunder or any interest herein or in the Collateral except as
expressly contemplated by this Agreement or the Credit Agreement. This
Agreement shall be construed as a separate agreement with respect to each
Pledgor and may be amended, modified, supplemented, waived or released with
respect to any Pledgor without the approval of any other Pledgor and without
affecting the obligations of any other Pledgor hereunder.
SECTION 5.05. Successors and Assigns. Whenever in this Agreement any
-----------------------
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Pledgor or the Security Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 5.06. Security Agent Appointed Attorney-in-Fact. Each of the
-----------------------------------------
Pledgors hereby appoints the Security Agent the attorney-in-fact of such Pledgor
for the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument which the Security
19
Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Security Agent shall have the right, upon the
occurrence and during the continuance of an Event of Default, with full power of
substitution either in the Security Agent's name or in the name of any Pledgor,
to ask for, demand, ▇▇▇ for, collect, receive and give acquittance for any and
all moneys due or to become due under and by virtue of any Collateral, to
endorse checks, drafts, orders and other instruments for the payment of money
payable to such Pledgor representing any dividend or other distribution payable
in respect of the Collateral or any part thereof or on account thereof and to
give full discharge for the same, to settle, compromise, prosecute or defend any
action, claim or proceeding with respect thereto, and to sell, assign, endorse,
pledge, transfer and make any agreement respecting, or otherwise deal with, the
same; provided, however, that nothing herein contained shall be construed as
-------- -------
requiring or obligating the Security Agent to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by the Security
Agent, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action taken by the
Security Agent or omitted to be taken with respect to the Collateral or any part
thereof shall give rise to any defense, counterclaim or offset in favor of any
Pledgor or to any claim or action against the Security Agent or any other
Secured Party.
SECTION 5.07. Security Agent's Fees and Expenses; Indemnification.
----------------------------------- ----------------
(a) Each of the Pledgors jointly and severally agrees to pay upon demand to the
Security Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts or agents, which
the Security Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the
20
Collateral, (iii) the exercise, enforcement or protection of any of the rights
of the Security Agent hereunder or (iv) the failure of the Pledgors to perform
or observe any of the provisions hereof.
(b) Without limitation of their indemnification obligations under the
other Loan Documents, each of the Pledgors jointly and severally agrees to
indemnify the Security Agent from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by the
Security Agent in connection with any investigative, administrative or judicial
proceeding relating hereto or to the Collateral, whether or not the Security
Agent is a party thereto; provided that the Security Agent shall not have the
--------
right to be indemnified hereunder for its own gross negligence or wilful
misconduct as determined by a court of competent jurisdiction.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents. The
provisions of this Section shall remain operative and in full force and effect
regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Security
Agent or any Lender. All amounts due under this Section shall be payable on
written demand therefor.
SECTION 5.08. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
--------------
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 5.09. Waivers; Amendment. (a) No failure or delay of the
-------------------
Security Agent in exercising any power or right hereunder shall operate as a
waiver thereof,
21
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Security Agent hereunder and of
the Security Agent, the Agent and the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provisions of this Agreement or any other Loan
Document or consent to any departure by any Pledgor therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on any Pledgor in any case
shall entitle such Pledgor or any other Pledgor to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Security Agent and the Pledgor or Pledgors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.05 of the Credit Agreement.
SECTION 5.10. Waiver of Jury Trial. Each of the parties hereto
---------------------
irrevocably waives any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement or any other Loan Document or the
transactions contemplated hereby.
SECTION 5.11. Severability. In the event any one or more of the
-------------
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal
22
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 5.12 Counterparts. This Agreement may be executed in two or
-------------
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 5.04),
and shall become effective as provided in Section 5.04.
SECTION 5.13. Headings. Article and Section headings used herein are
---------
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 5.14. Jurisdiction; Consent to Service of Process. (a) Each
----------------------------------- --------
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Security Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Pledgor or its properties in the courts of any jurisdiction.
23
(b) Each Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 5.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 5.15. Termination. This Agreement and the security interests
------------
granted hereby shall terminate when all the Obligations (other than obligations
of the Borrower under Section 10.03(b) of the Credit Agreement, or any other
indemnification provisions contained in the Loan Documents, in respect of claims
which have not then been asserted) have been indefeasibly paid in full and the
Lenders have no further commitment to lend or to issue Letters of Credit under
the Credit Agreement, at which time the Security Agent shall reassign and
deliver to the Pledgors, at the Pledgors' expense and against receipt, such of
the Collateral as shall not have been sold or otherwise applied hereunder and
shall remain held by the Security Agent hereunder, together with such documents
as the Pledgors shall reasonably request to evidence such termination and
reassignment. Any such reassignment and any execution and delivery of documents
pursuant to this Section shall be without recourse to or warranty by the
Security Agent. Each Subsidiary Pledgor shall automatically be released from
its obligations hereunder and the security interest granted hereby in the
Collateral of such Subsidiary Pledgor shall be automatically released in the
event that all the capital stock of such Subsidiary Pledgor shall be sold,
transferred or otherwise
24
disposed of to a person that is not an Affiliate of the Borrower in accordance
with the terms of the Credit Agreement; provided that the Required Lenders shall
--------
have consented to such sale, transfer or other disposition and the terms of such
consent did not provide otherwise.
SECTION 5.16. Additional Pledgors. Upon execution and delivery by
--------------------
the Security Agent and a Subsidiary of an instrument in the form of Annex I
hereto, such Subsidiary shall become a Subsidiary Pledgor and Pledgor hereunder
with the same force and effect as if originally named as a Subsidiary Pledgor
and Pledgor herein. The execution and delivery of any such instrument shall not
require the consent of any Pledgor hereunder. The rights and obligations of
each Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Pledgor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BRYLANE, L.P.,
by VGP CORPORATION, General
Partner,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Treasurer
and Secretary
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as security
agent,
by __________________________________
Name:
Title:
ANNEX 1 to
Pledge Agreement
SUPPLEMENT NO. dated as of _____________, to the Pledge
Agreement dated as of December 9, 1996 among BRYLANE, L.P., a
Delaware limited partnership (the "Borrower"), such subsidiaries
--------
of the Borrower that have become parties thereto pursuant to
Section 5.16 thereof (collectively, the "Subsidiary Pledgors";
-------------------
the Borrower and the Subsidiary Pledgors being collectively
called the "Pledgors"); and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
--------
YORK, as security agent (in such capacity, the "Security Agent")
--------------
for the Secured Parties, as defined therein.
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Pledge Agreement.
B. The Borrower and the Subsidiary Pledgors have entered into the
Pledge Agreement in order to induce the Lenders to extend credit under the
Credit Agreement. The Pledge Agreement provides that additional Subsidiaries
may become Subsidiary Pledgors under the Pledge Agreement by execution and
delivery of an instrument in the form of this Supplement. Pursuant to the
Credit Agreement, the undersigned Subsidiary (the "New Subsidiary Pledgor") is
required to become a Subsidiary Pledgor under the Pledge Agreement. The New
Subsidiary Pledgor desires to become a Subsidiary Pledgor and Pledgor under the
Pledge Agreement in order to induce the Lenders to continue to extend credit
under the Credit Agreement and as consideration therefor.
Accordingly, the Security Agent and the New Subsidiary Pledgor agree
as follows:
SECTION 1. (a) In accordance with the Pledge Agreement, the New
Subsidiary Pledgor by its signature hereto shall become a Subsidiary Pledgor and
Pledgor under
2
the Pledge Agreement with the same force and effect as if originally named
therein as a Subsidiary Pledgor and Pledgor and the New Subsidiary Pledgor
hereby (i) agrees to all the terms and provisions of the Pledge Agreement
applicable to it as a Subsidiary Pledgor and Pledgor thereunder and (ii)
represents and warrants that the representations and warranties made by it as a
Subsidiary Pledgor and Pledgor thereunder are true and correct on and as of the
date hereof. In furtherance of the foregoing, the New Subsidiary Pledgor, as
security for the payment or performance, as the case may be, of the Obligations,
hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Security Agent, its successors and its
assigns, for the benefit of the Secured Parties, and hereby grants to the
Security Agent, its successors and its assigns, for the benefit of the Secured
Parties, a security interest in, all of the Subsidiary Pledgor's right, title
and interest in, to and under the Collateral. Each reference to a "Pledgor" or a
"Subsidiary Pledgor" in the Pledge Agreement shall be deemed to include the New
Subsidiary Pledgor. The Pledge Agreement is hereby incorporated herein by
reference.
(b) Attached hereto is a schedule identifying the Pledged Securities
included in the Collateral pledged by the New Subsidiary Pledgor hereunder,
which schedule supplements, and shall hereafter be deemed a part of, Schedule I
to the Pledge Agreement.
SECTION 2. This Supplement shall become effective when the Security
Agent shall have received a counterpart of this Supplement executed on behalf of
the New Subsidiary Pledgor.
SECTION 3. The New Subsidiary Pledgor hereby represents and warrants
that this Supplement has been duly authorized, executed and delivered by the New
Subsidiary Pledgor and constitutes a valid and binding obligation of the New
Subsidiary Pledgor, enforceable against it in accordance with its terms.
3
SECTION 4. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 5. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
The parties hereto shall endeavor in good-faith negotiations to replace any
invalid, illegal or unenforceable provisions herein with valid provisions, the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 7. This Supplement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
SECTION 8. The New Subsidiary Pledgor agrees to reimburse the
Security Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, includ-
4
ing the reasonable fees and expenses of counsel for the Security Agent.
IN WITNESS WHEREOF, the New Subsidiary Pledgor and the Security Agent
have duly executed this Supplement to the Pledge Agreement as of the day and
year first above written.
[NAME OF NEW SUBSIDIARY PLEDGOR],
by___________________________________
Title:
Address:___________________________
___________________________
___________________________
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Security Agent,
by___________________________________
Title:
