PLEDGE AGREEMENT
This Pledge Agreement (this "Pledge Agreement") is entered into as of
January 6, 2002 by and among The Right Start, Inc. (the "Pledgor"), Xxxxxxx-RS,
LLC, a New York limited liability company ("Xxxxxxx"), and Toy Soldier, Inc., a
Delaware corporation ("TS" and, collectively with Xxxxxxx, the "Pledged Stock
Issuers"), and Xxxxx Fargo Retail Finance, LLC ("WFRF" or the "Secured Party").
WITNESSETH
WHEREAS, the Pledgor, TS and WFRF, and as successor to Paragon Capital LLC,
are parties to the Loan and Security Agreement dated as of January 23, 2001, as
amended by (i) the First Amendment to Loan and Security Agreement dated as of
September 5, 2001, (ii) the Second Amendment to Loan and Security Agreement
dated as of December 14, 2001 and (iii) the Third Amendment to Loan and Security
Agreement dated as of the date hereof (as so amended and as may be further
amended, restated, supplemented and/or otherwise modified from time to time, the
"Loan Agreement"), pursuant to which WFRF, subject to the terms and conditions
contained therein, has agreed to make certain revolving credit advances, cause
the issuance of letters of credit and provide other financial accommodations to
the Pledgor (collectively, the "Loans");
WHEREAS, the Pledgor owns all of the outstanding capital stock of TS and
uncertificated membership interests of Xxxxxxx;
WHEREAS, the obligation of the WFRF to make additional Loans is subject to
the conditions, among others, that the Pledgor and each of the Pledged Stock
Issuers execute and deliver this Pledge Agreement and that the Pledgor grant the
security interest hereinafter described;
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, it is hereby agreed as follows:
1. Certain Definitions.
(a) As used in this Pledge Agreement the following terms
shall have the following definitions:
(i) "Pledged Collateral" shall mean the Pledged Stock and
any other collateral now or hereafter pledged hereunder.
(ii) "Pledged Stock" shall mean the shares of capital stock
of each Pledged Stock Issuer listed on Schedule I hereto and any
additional securities now or hereafter pledged hereunder.
(b) Capitalized terms used but not defined herein shall have
the respective meanings ascribed to such terms in the Loan
Agreement. Unless the context of this Pledge Agreement clearly
requires otherwise, references to the plural include the
singular, and references to the singular include the plural.
2. Security Interest. To secure the Pledgor's prompt, punctual and faithful
payment and performance of all and each of the Liabilities, the Pledgor hereby
deposits with and pledges the Pledged Collateral to the Secured Party and hereby
grants to the Secured Party a security interest in and to and a lien on all of
the Pledgor's right, title and interest in and to the Pledged Collateral.
3. Special Warranties and Covenants of the Pledgor. The Pledgor hereby
warrants and covenants to the Secured Party that:
(a) The Pledged Collateral is duly and validly pledged with
the Secured Party in accordance with law, and the Pledgor
warrants and will defend the Secured Party's right, title and
security interest in and to the Pledged Collateral against the
claims and demands of all persons whomsoever.
(b) This Pledge Agreement and, in the case of TS, the
delivery of the Pledged Collateral to the Secured Party creates a
perfected first priority security interest in all of the Pledged
Collateral in favor of the Secured Party, securing payment of the
Liabilities, and all actions necessary to achieve such perfection
have been taken.
(c) The Pledgor has good title to the Pledged Collateral,
free and clear of all claims, mortgages, pledges, liens, security
interests and other encumbrances of every nature whatsoever
except for the security interests in the Pledged Collateral
granted to QFS and FAO pursuant to the Parent Security Agreement
dated as of the date hereof among QFS, FAO and the Pledgor.
(d) All of the Pledged Stock has been duly and validly
issued and is fully paid and nonassessable.
(e) The Pledged Stock constitutes all of the presently
issued and outstanding capital stock of the Pledged Stock Issuers
issued to the Pledgor.
(f) If (i) any additional shares of capital stock of any
class of any Pledged Stock Issuer or any other securities of any
Pledged Stock Issuer are acquired by the Pledgor after the date
hereof, the same shall constitute Pledged Collateral and,
simultaneously with such acquisition, shall be deposited and
pledged with the Secured Party as provided in Section 2 hereof.
The Pledgor will promptly notify the Secured Party of the date
and amount of any material loans made from time to time by the
Pledgor to any Pledged Stock Issuer.
(g) If at any time and from time to time any Pledged
Collateral consists of an uncertificated security or a security
in book entry form, then such Pledged Stock Issuer shall promptly
register or enter such Pledged Collateral, as the case may be, in
the name of Secured Party or otherwise cause the Secured Party's
security interest thereon to be perfected in accordance with
applicable law.
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(h) The Pledgor has taken all steps it deems necessary or
appropriate to be informed on a continuing basis of changes or
potential changes affecting the Pledged Collateral (including
rights of conversion and exchange, rights to subscribe, payment
of dividends, reorganizations or recapitalization, tender offers
and voting rights), and the Pledgor agrees that the Secured Party
shall have not any responsibility or liability for informing the
Pledgor of any such changes or potential changes or for taking
any action or omitting to take any action with respect thereto.
(i) All information herein or hereafter supplied to the
Secured Party by or on behalf of the Pledgor in writing with
respect to the Pledged Collateral is, or in the case of
information hereafter supplied will be, accurate and complete in
all material respects.
(j) The Pledgor will not sell, convey or otherwise dispose
of any of the Pledged Collateral, nor will the Pledgor create,
incur or permit to exist any pledge, mortgage, lien, charge,
encumbrance or any security interest whatsoever with respect to
any of the Pledged Collateral or the proceeds thereof, other than
liens on and security interests in the Pledged Collateral created
hereby or which are otherwise expressly permitted under the Loan
Agreement.
(k) The Pledgor will not consent to or approve the issuance
of any additional shares of capital stock of any class of any of
the Pledged Stock Issuers if such issuance would violate the
terms of the Loan Agreement or would cause an Event of Default
under the Loan Agreement and, in the event that any such
additional shares of capital stock are issued to the Pledgor,
they shall be deposited and pledged with the Secured Party
simultaneously with such issuance as provided in Section 2
hereof.
(l) Neither the pledge of the Pledged Collateral pursuant to
this Pledge Agreement nor the extensions of credit represented by
the Liabilities violates Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
4. Further Assurances.
(a) The Pledgor agrees that from time to time, at the
expense of the Pledgor, the Pledgor will promptly execute and
deliver all further instruments and documents, and take all
further actions that may be necessary or reasonably desirable, or
that the Secured Party may reasonably request in writing, in
order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Secured Party to
exercise and enforce its rights and remedies hereunder with
respect to any of the Pledged Collateral. Without limiting the
generality of the foregoing, the Pledgor and the Pledged Stock
Issuers, as the case may be, will: (i) at the request of the
Secured Party, xxxx conspicuously their respective records
pertaining to the Pledged Collateral with a legend, in form and
substance reasonably satisfactory to the Secured Party,
indicating that such Pledged Collateral is subject to the
security interest granted hereby; (ii) execute and file such
financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or
reasonably desirable, or as the Secured Party may reasonably
request, in order to perfect and preserve the security interests
granted or purported to be granted hereby; (iii) allow inspection
of the Pledged Collateral by the Secured Party or Persons
designated by the Secured Party; and (iv) appear in and defend
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any action or proceeding that may affect Pledgor's title to or
the Secured Party's security interest in the Pledged Collateral
upon the written request of the Secured Party.
(b) Pledgor hereby authorizes the Secured Party to file one
or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor where permitted by law to
perfect the Secured Party's security interest therein.
(c) Upon the Secured Party's request, the Pledgor will
furnish to the Secured Party: (i) a certificate executed by an
authorized officer of Pledgor, and dated as of the date of
delivery to the Secured Party, itemizing in such detail as
Secured Party may reasonably request in writing, the Pledged
Collateral which, as of the date of such certificate, has been
delivered to Secured Party by the Pledgor pursuant to the
provisions of this Pledge Agreement; and (ii) such statements and
schedules further identifying and describing the Pledged
Collateral and such other reports in connection with the Pledged
Collateral as the Secured Party may reasonably request.
5. Covenants of Pledgor. The Pledgor shall:
(a) Perform each and every covenant in the Loan Documents
applicable to the Pledgor; and
(b) Upon receipt by the Pledgor or any material notice,
report, or other communication from the Pledged Stock Issuers
relating to all or any part of the Pledged Collateral, deliver
such notices, report or other communication to the Secured Party
as soon as possible, but in no event later than five (5) days
following the receipt thereof by the Pledgor.
6. Secured Party as Pledgor's Attorney-in-Fact.
(a) The Pledgor hereby irrevocably appoints the Secured
Party as the Pledgor's attorney-in-fact, with full authority in
the place and stead of the Pledgor and in the name of the
Pledgor, the Secured Party or otherwise, from time to time at the
Secured Party's discretion, to take any action and to execute any
instrument that the Secured Party may reasonably deem necessary
or advisable to accomplish the purposes of this Pledge Agreement,
including: (i) upon the occurrence and during the continuance of
an Event of Default, to receive, endorse, and collect all
instruments made payable to the Pledgor representing any
dividend, interest payment or other distribution in respect of
the Pledged Collateral or any part thereof to the extent
permitted hereunder and to give full discharge for the same and
to execute and file governmental notifications and reporting
forms; (ii) to issue any notifications/instructions that the
Secured Party deems necessary pursuant to Section 4 of this
Pledge Agreement; or (iii) to arrange for the transfer of the
Pledged Collateral on the books of the Pledged Stock Issuers or
any other Person to the name of the Secured Party or to the name
of the Secured Party's nominee in accordance with Section 10.
(b) In addition to the designation of the Secured Party as
the Pledgor's attorney-in-fact in subsection (a), upon the
occurrence and during the continuation of an Event of Default,
the Pledgor hereby irrevocably appoints the Secured Party as the
Pledgor's agent and attorney-in-fact to make, execute and deliver
any and all documents and writings which may be necessary or
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appropriate for approval of, or be required by, any regulatory
authority located in any city, county, state or country where the
Pledgor or any of the Pledged Stock Issuers engage in business,
in order to transfer or to more effectively transfer any of the
Pledged Shares or otherwise enforce the Secured Party's rights
hereunder.
7. Distributions. In case, upon the dissolution, winding up, liquidation or
reorganization of the Pledged Stock Issuers whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
any other marshalling of the assets and liabilities of such Pledged Stock
Issuers or otherwise, any sum shall be paid or any property shall be distributed
upon or with respect to any of the Pledged Collateral, such sum shall be paid
over to the Secured Party to be held as collateral security for the Liabilities.
In case any stock dividend shall be declared on any of the Pledged Collateral,
or any share of stock or fraction thereof shall be issued pursuant to any stock
split involving any of the Pledged Collateral, or any distribution of capital
(including cash dividends, except those expressly allowed under the Loan
Agreement) shall be made on any of the Pledged Collateral, or any property shall
be distributed upon or with respect to the Pledged Collateral pursuant to
recapitalization or reclassification of the capital of the Pledged Stock
Issuers, the shares or other property so distributed shall be delivered to the
Secured Party to be held as collateral security for the Liabilities.
8. Events of Default. Any Event of Default as defined and provided in the
Loan Agreement shall constitute an Event of Default under this Pledge Agreement.
9. Rights and Remedies of the Secured Party. Upon the occurrence and
continuance of any Event of Default, such default not having previously been
remedied or cured within any applicable grace or cure periods, the Secured Party
shall have the following rights and remedies:
(a) All rights and remedies provided by law, including,
without limitation, those provided by the UCC;
(b) All rights and remedies provided in this Pledge
Agreement; and
(c) All rights and remedies provided in the Loan Agreement
or in any other Loan Document, other agreement, document or
instrument pertaining to the Liabilities.
The rights and remedies of the Secured Party set forth above shall be
exercisable only in connection with a foreclosure on the Pledged Collateral in
accordance with the terms hereof. The rights and remedies of the Secured Party
under this Pledge Agreement against the Pledgor shall be limited to foreclosure
on such Pledged Collateral, and the Secured Party shall not have the right to
commence any action against the Pledgor for any deficiency remaining in respect
of the Liabilities after the exercise of the rights of the Secured Party against
the Pledged Collateral in accordance with terms of this Pledge Agreement.
10. Right to Transfer into Name of Secured Party, etc. In case there shall
exist an Event of Default that shall be continuing after applicable grace and
cure periods, but subject to the provisions of the UCC or other applicable law,
the Secured Party may cause all or any of the Pledged Collateral to be
transferred into its name or into the name of its nominee or nominees. So long
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as no Event of Default shall exist and be continuing, the Pledgor shall be
entitled to exercise as the Pledgor shall deem fit, but in a manner not
inconsistent with the terms hereof or of the Liabilities, the voting power with
respect to the Pledged Collateral. In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
11. Right of Secured Party to Exercise Voting Power, etc. In case there
shall exist an Event of Default, which shall not have been remedied or cured,
the Secured Party, until such Event of Default has been remedied or cured in
accordance with the Loan Agreement shall be entitled to exercise the voting
power with respect to the Pledged Collateral, to receive and retain, as
collateral security for the Liabilities, any and all dividends or other
distributions at any time and from time to time declared or made upon any of the
Pledged Collateral, and to exercise any and all rights of payment, conversion,
exchange, subscription or any other rights, privileges or options pertaining to
the Pledged Collateral as if it were the absolute owner thereof, including
without limitation, the right to exchange, at its discretion, any and all of the
Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any of the Pledged Stock Issuers or,
upon the exercise of any such right, privilege or option pertaining to the
Pledged Collateral, and in connection therewith, to deposit and deliver any and
all of the Pledged Collateral with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Secured Party may determine, all without liability except to account for
property actually received, the Secured Party shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.
12. Right of Secured Party to Dispose of Collateral, etc.
(a) Upon the occurrence and continuance of an Event of
Default, such default not having previously been remedied or
cured within any applicable grace or cure periods, the Secured
Party shall have the right, unless such Event of Default shall
have been remedied or cured in accordance with the Loan Agreement
prior to taking any such actions, at any time or times thereafter
to sell, resell, assign and deliver all or any of the Pledged
Collateral in one or more parcels at any exchange or broker's
board or at public or private sale. The Secured Party will give
the Pledgor at least ten (10) days' prior written notice at the
address of the Pledgor specified in Section 23 hereof of the time
and place of any public sale thereof or of the time after which
any private sale or any other intended disposition thereof is to
be made. Any such notice shall be deemed to meet any requirement
hereunder or under any applicable law (including the UCC) that
reasonable notification be given of the time and place of such
sale or other disposition. Such notice may be given without any
demand of performance or other demand, all such demands being
hereby expressly waived by the Pledgor. All such sales shall be
conducted in a commercially reasonable manner and shall be at
such commercially reasonable price or prices as the Secured Party
shall deem best and either for cash or on credit or for future
delivery (without assuming any responsibility for credit risk).
At any such sale or sales the Secured Party may purchase any or
all of the Pledged Collateral to be sold thereat upon such terms
as the Secured Party may deem best. Upon any such sale or sales
the Pledged Collateral so purchased shall be held by the
purchaser absolutely free from any claims or rights of whatsoever
kind or nature, including any equity of redemption and any
similar rights, all such equity of redemption and any similar
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rights being hereby expressly waived and released by the Pledgor.
In the event any consent, approval or authorization of any
governmental agency will be necessary to effectuate any such sale
or sales, the Pledgor shall execute, and hereby agree to cause
the Pledged Stock Issuers to execute, all such applications or
other instruments as may be required. The proceeds of any such
sale or sales, shall be applied as provided in the Loan
Agreement.
(b) The Pledgor recognizes that the Secured Party may be
unable to effect a public sale of all or a part of the Pledged
Collateral by reason of certain prohibitions contained in the
Securities Act of 1933, as amended (the "Securities Act"), but
may be compelled to resort to one or more private sales to a
restricted group of purchasers, each of whom will be obligated to
agree, among other things, to acquire such Pledged Collateral for
its own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges that
private sales so made may be at prices and upon other terms less
favorable to the seller than if such Pledged Collateral were sold
at public sales, and that the Secured Party has no obligation to
delay sale of any such Pledged Collateral for the period of time
necessary to permit such Pledged Collateral to be registered for
public sale under the Securities Act of 1933. The Pledgor agrees
that any such private sales shall not be deemed to have been made
in a commercially unreasonable manner solely because they shall
have been made under the foregoing circumstances.
(c) If the Secured Party, for its benefit, shall determine
to exercise its right to sell all or any portion of the Pledged
Collateral pursuant to this Section 12, the Pledged Stock Issuers
shall, upon the written request of the Secured Party and at its
own expense:
(i) execute and deliver, all such instruments and documents,
and to do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of Secured Party, advisable
to register such Pledged Collateral under the provisions of the
Securities Act, and use its best efforts to cause the
registration statement relating thereto to become effective and
to remain effective for such period as prospectuses are required
by law to be furnished, and to make all amendments and
supplements thereto and to the related prospectuses which, in the
opinion of the Secured Party, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission
applicable thereto;
(ii) use its best efforts to qualify the Pledged Collateral
under the state securities laws or "Blue Sky" laws and to obtain
all necessary governmental approvals for the sale of the Pledged
Collateral, as requested by the Secured Party in writing;
(iii) make available to its respective security holders, as
soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act;
(iv) execute and deliver to any person, entity or
governmental authority as Secured Party may choose, any and all
documents and writings which, in the Secured Party's reasonable
judgment, may be necessary or appropriate for approval, or be
required by, any regulatory authority located in any city, state
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or country where the Pledgor or Pledged Stock Issuers engage in
business, in order to transfer or to more effectively transfer
the Pledged Shares or otherwise enforce Secured Party's rights
hereunder; and
(v) do or cause to be done all such other acts and things as
may be necessary to make such sale of the Pledged Collateral or
any part thereof valid and binding and in compliance with
applicable law.
(d) The Pledgor acknowledges that there is no adequate
remedy at law for failure by it to comply with the provisions of
this Section 12 and that such failure would not be adequately
compensable in damages, and therefore agrees that its agreements
contained in this Section may be specifically enforced.
13. Collection of Amounts Payable on Account of Pledged Collateral, etc.
Upon the occurrence and during the continuance of any Event of Default, the
Secured Party may, but without obligation to do so, demand, xxx for and/or
collect any money or property at any time due, payable or receivable, to which
it may be entitled hereunder, on account of or in exchange for any of the
Pledged Collateral and shall have the right, for and in the name, place and
stead of the Pledgor, to execute endorsements, assignments or other instruments
of conveyance or transfer with respect to all or any of the Pledged Collateral.
14. Care of Pledged Collateral in Secured Party's Possession. Beyond the
exercise of reasonable care to assure the safe custody of the Pledged Collateral
while held hereunder, the Secured Party shall have no duty or liability to
collect any sums due in respect thereof or to protect or preserve rights
pertaining thereto, and shall be relieved of all responsibility for the Pledged
Collateral upon surrendering the same to the Pledgor.
15. WAIVERS, ETC. EXCEPT AS IS OTHERWISE PROVIDED HEREIN, THE PLEDGOR
HEREBY WAIVES PRESENTMENT, DEMAND, NOTICE, PROTEST AND ALL OTHER DEMANDS AND
NOTICES IN CONNECTION WITH THIS AGREEMENT OR THE ENFORCEMENT OF THE SECURED
PARTY'S RIGHTS HEREUNDER OR IN CONNECTION WITH ANY LIABILITY OR ANY PLEDGED
COLLATERAL AND CONSENTS TO AND WAIVES NOTICE OF THE GRANTING OF RENEWALS,
EXTENSIONS OF TIME FOR PAYMENT OR OTHER INDULGENCES TO THE PLEDGED STOCK ISSUERS
OR THE PLEDGOR OR TO ANY THIRD PARTY, OR SUBSTITUTION, RELEASE OR SURRENDER OF
ANY COLLATERAL SECURITY FOR ANY LIABILITY, THE ADDITION OR RELEASE OF PERSONS
PRIMARILY OR SECONDARILY LIABLE ON ANY LIABILITY OR ON ANY COLLATERAL SECURITY
FOR ANY LIABILITY, THE ACCEPTANCE OF PARTIAL PAYMENTS ON ANY LIABILITY OR ON ANY
COLLATERAL SECURITY FOR ANY LIABILITY AND/OR THE SETTLEMENT OR COMPROMISE
THEREOF. NO DELAY OR OMISSION ON THE PART OF THE SECURED PARTY IN EXERCISING ANY
RIGHT HEREUNDER SHALL OPERATE AS A WAIVER OF SUCH RIGHT OR OF ANY OTHER RIGHT
HEREUNDER. ANY WAIVER OF ANY SUCH RIGHT ON ANY ONE OCCASION SHALL NOT BE
CONSTRUED AS A BAR TO OR WAIVER OF ANY SUCH RIGHT ON ANY FUTURE OCCASION. THE
PLEDGOR FURTHER WAIVES ANY RIGHT IT MAY HAVE UNDER THE CONSTITUTION OF THE
COMMONWEALTH OF MASSACHUSETTS OR THE CONSTITUTION OF THE STATE OF CALIFORNIA (OR
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UNDER THE CONSTITUTION OF ANY OTHER STATE IN WHICH ANY OF THE PLEDGED COLLATERAL
MAY BE LOCATED), OR UNDER THE CONSTITUTION OF THE UNITED STATES OF AMERICA, TO
NOTICE (OTHER THAN ANY REQUIREMENT OF NOTICE PROVIDED HEREIN) OR TO A JUDICIAL
HEARING PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED BY THIS AGREEMENT
TO THE SECURED PARTY AND WAIVES ITS RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE
ANY SALE DULY CONSUMMATED IN ACCORDANCE WITH THE FOREGOING PROVISIONS HEREOF ON
THE GROUNDS (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR
JUDICIAL HEARING. THE PLEDGOR'S WAIVERS UNDER THIS SECTION HAVE BEEN MADE
VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY AND AFTER THE PLEDGOR HAS BEEN APPRISED
AND COUNSELED BY ITS ATTORNEYS AS TO THE NATURE THEREOF AND ITS POSSIBLE
ALTERNATIVE RIGHTS.
16. Termination; Assignment, etc. This Pledge Agreement and the security
interest in the Pledged Collateral created hereby shall terminate when all of
the Liabilities have been paid and finally discharged in full in cash (provided
that the Secured Party is no longer obligated to make Loans under the Loan
Agreement). For all purposes of this Pledge Agreement, no Event of Default shall
be deemed to have been cured or waived except as expressly provided in the Loan
Agreement. No waiver by the Secured Party or by any other holder of Liabilities
of any default shall be effective unless in writing nor operate as a waiver of
any other default or of the same default on a future occasion. In the event of a
sale or assignment by the Secured Party of all or any of the Liabilities held by
it in accordance with the terms of the Loan Agreement, the Secured Party may
assign or transfer the rights and interest of the Secured Party, under this
Pledge Agreement in whole or in part to the purchaser or purchasers of such
Liabilities, whereupon such purchaser or purchasers shall become vested with all
of the powers and rights of the Secured Party hereunder, and the Secured Party
shall thereafter be forever released and fully discharged from any liability or
responsibility hereunder with respect to the rights and interest so assigned.
17. Reinstatement. Notwithstanding the provisions of Section 13, this
Pledge Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any amount received by the Secured Party in respect of
the Liabilities is rescinded or must otherwise be restored or returned by the
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any of the Pledged Stock Issuers or the Pledgor or upon the
appointment of any intervenor or conservator of, or trustee or similar official
for, the Pledged Stock Issuers or the Pledgor or any substantial part of their
respective properties, or otherwise, all as though such payments had not been
made.
18. Governmental Approvals, etc. Upon the exercise by the Secured Party of
any power, right, privilege or remedy pursuant to this Pledge Agreement which
requires any consent, approval, qualification or authorization of any
governmental authority or instrumentality and the written request of the Secured
Party, the Pledgor will execute and deliver, or will cause the execution and
delivery of, all applications, certificates, instruments and other documents and
papers that the Secured Party may be required to obtain for such governmental
consent, approval, qualification or authorization.
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19. Restrictions on Transfer, etc. To the extent that any restrictions
imposed by the charter or by-laws of the Pledged Stock Issuers or any agreement
among the holders of capital stock of the Pledged Stock Issuers or other
document or instrument would in any way affect or impair the pledge of the
Pledged Collateral hereunder or the exercise by the Secured Party of any right
granted hereunder, including, without limitation, the right of the Secured Party
to dispose of the Pledged Collateral upon the occurrence of any Event of
Default, the Pledgor hereby waives such restrictions. Each Pledged Stock Issuer
represents and warrants that it has taken each necessary action to waive such
restrictions. The Pledgor Stock Issuers and the Pledgor will each take any
further action which the Secured Party may reasonably request in writing in
order that the Secured Party may obtain and enjoy the full rights and benefits
granted to the Secured Party by this Pledge Agreement free of any such
restrictions.
20. Amendments. No amendment or waiver of any provision of this Pledge
Agreement nor consent to any departure by Pledgor herefrom shall in any event be
effective unless the same shall be in writing and signed by Secured Party, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
21. Security Interest Absolute. To the maximum extent permitted by law, all
rights of the Secured Party, all security interests hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of the
Liabilities or any other agreement or instrument relating
thereto, including any of the Loan Documents;
(b) any change in the time, manner, or place of payment of,
or in any other term of, all or any of the Liabilities, or any
other amendment or waiver of or any consent to any departure from
any of the Loan Documents, or any other agreement or instrument
relating thereto;
(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 Liabilities;
or
(d) any other circumstances (other than payment) that might
otherwise constitute a defense available to, or a discharge of,
the Pledgor.
To the maximum extent permitted by law, the Pledgor hereby waives any right
to require Secured Party to: (A) proceed against or exhaust any security held
from the Pledgor; or (B) pursue any other remedy in the Secured Party's power
whatsoever.
22. Waiver of Marshaling. Each of the Pledgor and the Secured Party
acknowledges and agrees that in exercising any rights under or with respect to
the Pledged Collateral: (i) the Secured Party is under no obligation to marshal
any Pledged Collateral; (ii) may, in its absolute discretion, realize upon the
Pledged Collateral in any order and in any manner it so elects; and (iii) may,
in its absolute discretion, apply the proceeds of any or all of the Pledged
Collateral to the Liabilities in any order and in any manner it so elects. The
Pledgor and the Secured Party waive any right to require the marshaling of any
of the Pledged Xxxxxxxxxx.
00
00. Notices. Except as otherwise provided herein, all notices to the
Pledgor or to the Secured Party shall be in writing and shall be deemed to have
been sufficiently given or served for all purposes hereof if made in accordance
with and delivered to the respective addresses provided in the Loan Agreement.
24. Governing Law; Jurisdiction; Waiver of Jury Trial. This Pledge
Agreement, including the validity hereof and the rights and obligations of the
parties hereunder, shall be construed in accordance with and governed by the
laws of The Commonwealth of Massachusetts. The Pledgor, to the extent that it
may lawfully do so, hereby consents to the jurisdiction of the state and federal
courts located in the county of Suffolk, Massachusetts, as well as to the
jurisdiction of all courts to which an appeal may be taken from such courts, for
the purpose of any suit, action or other proceeding arising out of any of its
obligations hereunder or with respect to the transactions contemplated hereby,
and expressly waives any and all objections it may have as to venue in any such
courts. The Pledgor further agrees that a summons and complaint commencing an
action or proceeding in any of such courts shall be properly served and shall
confer personal jurisdiction if served personally or by certified mail to it at
its address as provided in the Loan Agreement or as otherwise provided under the
laws of The Commonwealth of Massachusetts. The Pledgor irrevocably waives all
right to a trial by jury in any suit, action or other proceeding instituted by
or against it in respect of its obligations hereunder or the transactions
contemplated hereby.
25. Miscellaneous.
(a) This Pledge Agreement shall inure to the benefit of and
be binding upon the Secured Party, the Pledgor, each of the
Pledged Stock Issuers and their respective successors and
assigns. In case any provision in this Pledge Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
(b) This Pledge Agreement may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
(c) This Pledge Agreement has been entered into in
conjunction with the provisions of and the security interest
granted to the Secured Party, for its benefit and the ratable
benefit of the Secured Parties, under the Loan Agreement. The
rights and remedies of the Pledgor, the Pledged Stock Issuers and
the Secured Party with respect to the security interests granted
herein are in addition and without prejudice to those set forth
in the Loan Agreement, all terms and provisions of which are
hereby incorporated herein by reference. In the event that any
provisions of this Pledge Agreement are deemed to conflict with
the Loan Agreement or the other Loan Documents, the provisions of
the Loan Agreement or the other Loan Documents shall govern.
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IN WITNESS WHEREOF, the parties hereto have executed this Pledge
Agreement as a sealed instrument as of the date first above written.
PLEDGOR:
THE RIGHT START, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Executive Vice President
PLEDGED STOCK ISSUERS:
XXXXXXX-RS, LLC
By: The Right Start, Inc., its managing member
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Executive Vice President
TOY SOLDIER, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Executive Vice President
SECURED PARTY:
XXXXX FARGO RETAIL FINANCE, LLC
By: /s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx,
Senior Vice President
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SCHEDULE I TO PLEDGE AGREEMENT
PLEDGED STOCK
Description (class and/or series)
of Pledged Stock
No. of Shares Percentage* Certificate No.
Common Stock of Toy 1000 100% 1
Soldier, Inc.
Limited Liability Company
Membership Interests of
Xxxxxxx-RS, LLC Not Applicable 100% Not Applicable
* For the purposes of this Schedule I, "Percentage" means the percentage of all
of the issued and outstanding shares of capital stock of the Pledged Stock
Issuers on a fully diluted basis.
