PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of March 3, 1997 between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the
"Pledgor") and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK (the "Bank").
WHEREAS, the Bank may extend and has already extended loans or other
credit facilities or financial accommodations (collectively, the "Loans") to
or on behalf of the Pledgor from time to time;
NOW, THEREFORE, to induce the Bank to extend the Loans and to secure his
obligations (collectively, the "Secured Obligations") with regard thereto,
and for other good consideration, the receipt and adequacy of which are
hereby acknowledged, the Pledgor and the Bank agree as follows:
1. As collateral security for the performance of the Secured
Obligations, the Pledgor hereby pledges and assigns to the Bank, and grants
to the Bank a security interest in, those securities identified in Exhibit A
hereto, all proceeds and products thereof and distributions thereon, and all
other shares of ▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. from time to time maintained by him in
custody with the Bank (collectively, the "Collateral.
2. The Pledgor represents and warrants that: (i) all of the Collateral
is and will be validly and duly pledged to the Bank in accordance with law,
and agrees to defend the Bank's right, title, lien and security interest in
and to the Collateral against the claims and demands of all persons
whomsoever, (ii) he has, and will have upon deposit with the Bank, title to
all of the Collateral, free and clear of all claims, mortgages, pledges,
liens, encumbrances and security interests of every nature whatsoever, and
that no consent or approval of any person, entity or governmental or
regulatory authority, or of any securities exchange was or is necessary to
the validity of this pledge, (iii) the information set forth in Exhibit A is
true and correct and (iv) no liens, security interests or adverse claims
other than in favor of the Bank exist upon any of the Collateral.
3. The Pledgor will faithfully preserve and protect the Bank's
security interest in the Collateral and will do all such acts and things and
execute and deliver all such documents and instruments, including without
limitation further pledges, assignments, financing statements and
continuation statements, as the Bank in its sole discretion may reasonably
deem necessary or advisable from time to time in order to preserve, protect
and perfect such security interest. The Pledgor hereby authorizes the Bank
to sign and file financing and continuation statements without the signature
of the Pledgor.
4. The Pledgor will not permit any liens, security interests or
adverse claims other than in favor of the Bank to exist upon any of the
Collateral and will not, without the prior express written consent of the
Bank, pledge any additional shares of the Corporation (as defined in Exhibit
A) to any person or entity other than the Bank.
5. The Pledgor will not take any action that could in any way limit or
adversely affect the ability of the Bank to realize upon its rights on the
collateral.
6. The Pledgor agrees to notify the Bank:
(a) at least 72 hours prior to donating, or committing any other act
with respect to any securities of the same class (or convertible into) shares
of the Corporation which might render the Collateral not salable: and
(b) immediately of any development or occurrence which to his knowledge
would render any of the Collateral not readily saleable under Rules 144 or
145(d) or the Securities Act of 1933, whichever is applicable.
7. If any time the Secured Obligations shall be in default the Bank
may cause all or any of the Collateral to be transferred to or registered in
its name or the name of its nominee or nominees.
8. In the event the Secured Obligations shall be in default (i) all
dividends, interest and other distributions at any time and from time to time
declared or paid upon any of the Collateral shall become part of the
Collateral and (ii) the Bank shall be entitled to exercise all voting power
with respect to the Collateral.
9. If any of the Secured Obligations shall not be performed forthwith
when due in accordance with their terms, the Bank, without obligation to
resort to other security, shall have the right at any time and from time to
time to sell, resell, assign and deliver, in its discretion, all or any of
the Collateral, in one or more parcels at the same or different times, and
all right, title and interest, claim and demand therein and right of
redemption thereof, on any securities exchange on which the Collateral or any
of it may be listed, or at public or private sale, for cash, upon credit or
for future delivery, and in connection therewith the Bank may grant options,
the Pledgor hereby waiving and releasing any and all equity or right of
redemption. If any of the Collateral is sold by the Bank upon credit or for
future delivery, the Bank shall not be liable for the failure of the
purchaser to purchase or pay for the same and, in the event of any such
failure, the Bank may resell such Collateral. In no event shall the Pledgor
be credited with any part of the proceeds of sale of any Collateral until
cash payment thereof has actually been received by the Bank. In addition,
should any portion of the Collateral consist of a time deposit or deposits
with a financial institution, the Bank may terminate such deposit or deposits
prior to the maturity thereof and any penalties payable in connection
therewith shall be for the sole account of the Pledgor.
10. No demand, advertisement or notice, all of which are hereby
expressly waived, shall be required in connection with any sale or other
disposition of any part of the Collateral which threatens to decline speedily
in value or which is of a type customarily sold on a recognized market;
otherwise the Bank shall give the Pledgor at least five business days' prior
notice of the time and place of any public sale and of the time after which
any private sale or other disposition is to be made, which notice the Pledgor
agrees is reasonable, all other demands, advertisements and notices being
hereby waived. The Bank shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale may have been given. The Bank 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 the case of all sales of
Collateral, public or private, the Pledgor shall pay all costs and expenses
of every kind for sale or delivery, including brokers' and attorneys' fees,
and after deducting such costs and expenses from the proceeds of sale, the
Bank shall apply any residue to the payment of principal, interest and other
amounts owed with regard to the Loans. The balance, if any, remaining after
payment in full of all such amounts shall be paid to the Pledgor, subject to
any duty of the Bank imposed by law to the holder of any subordinate security
interest in the Collateral known to the Bank
11. The Pledgor recognizes that the Bank may be unable to effect a
public sale of all or a part of the Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, as now or
hereafter in effect, or in applicable Blue Sky or other state securities
laws, as now or hereafter in effect, but may be compelled to resort to one or
more private sales to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such Collateral for their own account,
for investment and not with a view to the distribution or resale thereof.
The Pledgor agrees that private sales so made may be at prices and other
terms less favorable to the seller than if such Collateral were sold at
public sales, and that the Bank has no obligation to delay sale of any such
Collateral for the period of time necessary to permit the issuer of such
Collateral, even if such issuer would agree, to register such Collateral for
public sale under such applicable securities laws. The Pledgor agrees that
private sales made under the foregoing circumstances shall be deemed to have
been made in a commercially reasonable manner.
12. The remedies provided herein in favor of the Bank shall not be
deemed exclusive, but shall be cumulative, and shall be in addition to all
other remedies in favor of the Bank existing at law or in equity.
13. The Bank 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 Collateral.
14. The Bank shall have no duty as to the collection or protection of
the Collateral or any income thereon or as to the preservation of any rights
pertaining thereto, beyond the safe custody of any thereof actually in its
possession. With respect to any maturities, calls, conversions, exchanges,
redemptions, offers, tenders or similar matters relating to any of the
Collateral (herein called "events"), the Bank's duty shall be fully satisfied
if (i) the Bank exercises reasonable care to ascertain the occurrence and to
give reasonable notice to the Pledgor of any events applicable to any
Collateral which is registered and held in the name of the Bank or its
nominee, (ii) the Bank gives the Pledgor reasonable notice of the occurrence
of any events, of which the Bank has received actual knowledge, as to any
securities which are in bearer form or are not registered and held in the
name of the Bank or its nominee (the Pledgor agreeing to give the Bank
reasonable notice of the occurrence of any events applicable to any
securities in the possession of the Bank of which the Pledgor has received
knowledge), and (iii) in the exercise of its sole discretion (a) the Bank
endeavors to take such action with respect to any of the events as the
Pledgor may reasonably and specifically request in writing in sufficient time
for such action to be evaluated and taken or (b) if the Bank determines that
the action requested might adversely affect the value of the Collateral as
collateral, the collection of the Loans, or otherwise prejudice the interests
of the Bank, the Bank gives reasonable notice to the Pledgor that any such
requested action will not be taken and if the Bank makes such determination
or if the Pledgor fails to make such timely request, the Bank takes such
other action as it deems advisable in the circumstances. Except as
hereinabove specifically set forth, the Bank shall have no further obligation
to ascertain the occurrence of, or to notify the Pledgor with respect to, any
events and shall not be deemed to assume any such further obligation as a
result of the establishment by the Bank of any internal procedures with
respect to any securities in its possession. The Pledgor releases the Bank
from any claims, causes of action and demands at any time arising out of or
with respect to this Agreement, the Collateral and/or any actions, taken or
omitted to be taken by the Bank with respect thereto, and the Pledgor hereby
agrees to hold the Bank harmless from and with respect to any and all such
claims, causes of action and demands.
15. The Pledgor hereby irrevocably appoints the Bank as the Pledgor's
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument which either may
deem necessary or advisable to accomplish the purposes hereof. Without
limiting the generality of the foregoing, the Bank shall have the right and
power to receive, endorse and collect all checks and other orders for the
payment of money made payable to the Pledgor representing any interest or
dividend or other distribution payable in respect of the Collateral or any
part thereof and to give full discharge for the same.
16. No delay on the part of the Bank in exercising any of its options,
powers or rights, or partial or single exercise thereof, shall constitute a
waiver thereof. The pledge of the Collateral hereby shall not in any way
preclude or restrict any recourse by the Bank against the Borrower or any
other person or entity liable with regard to the Secured Obligations or any
other collateral therefor.
17. Upon the repayment in full of all principal, interest and other
amounts that may be payable with regard to the Loans, the Pledgor shall be
entitled to the return of all of the Collateral and of all other property and
cash which have not been used or applied toward the payment of such
principal, interest and other amounts free and clear of all liens in favor of
the Bank or any encumbrances imposed by the Bank. Except as aforesaid, the
assignment by the Bank to the Pledgor of such Collateral and other property
shall be without representation or warranty of any nature whatsoever and
wholly without recourse.
18. Any notice or demand upon the Pledgor shall be deemed to have been
sufficiently given for all purposes thereof if mailed, postage prepaid, by
registered or certified mail, return receipt requested, or if delivered, to
the Pledgor at the address specified below, or at such other address as the
Pledgor may theretofore have designated in writing and given in like manner
to the Bank.
19. Any waiver, permit, consent or approval of any kind or character on
the part of the Bank of any breach or default under this Agreement or any
such waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in
such writing.
20. This Agreement and the rights and obligations of the Bank and the
Pledgor hereunder shall be construed in accordance with and governed by the
laws of the State of New York, cannot be changed orally and shall bind and
inure to the benefit of the Pledgor and the Bank and their respective
successors and assigns, and all subsequent holders of the Secured
Obligations.
21. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
22. This Agreement replaces all prior agreements between the Pledgor
and the Bank relating to the Collateral contained in any promissory note
delivered to the Bank by the Pledgor.
23. The Pledgor agrees to pay the Bank on demand all costs, including
legal fees, incurred by the Bank in connection with the administration and
enforcement of this Agreement.
IN WITNESS WHEREOF, the Pledgor and the Bank have caused this Agreement
to be duly executed as of the day and year first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
By:
-----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Vice President
Address:
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Exhibit A
THE COLLATERAL
Name of Issuer of
Pledged Shares
(the "Corporation") No. of Shares Class of Shares Certificate No.
------------------ ------------- --------------- ---------------
▇▇▇▇▇▇ & Noble, Inc. (SEE ATTACHED SCHEDULE)
Date of Acquisition Nature of Acquisition Date on which Shares
of Shares of Shares fully paid for
------------------- ---------------------- ---------------------
NUMBER OF SHARES OF THE CORPORATION OWNED BY PLEDGOR
The Pledgor represents that:
(a) the total number of shares that he directly owns of the class of
security of the Corporation hereby being pledged is 4,486,209, and
(b) the total number of all other classes of the securities of the
Corporation directly or indirectly owned by the Pledgor is
NONE .
SALES BY PLEDGOR OF STOCK OF THE CORPORATION
The Pledgor represents to the Bank that during the last three months he, or
any person(s) who Pledgor must aggregate his sales with under Rule 144 of the
Securities Act of 1933, as amended,
(a) has sold 0 shares of the Corporation; and
(b) has sold 0 convertible securities which are convertible
into shares of the Corporation.
In addition, the Pledgor and such person(s) currently have no sale orders
open with any broker and that he and they will not place any such sale orders
to sell shares of the Corporation or such convertible securities without the
prior express written consent of the Bank.
▇▇▇▇▇▇ & ▇▇▇▇▇, INC. COMMON STOCK
ACQUISITION AND NATURE OF
CERT NO. NO. OF SHARES FULL PAYMENT DATE ACQUISITION
------- ------------- ----------------- -----------
4 100 12/30/86 Original Issue
7 106 12/30/86 Original Issue
12 283 12/30/86 Original Issue
90 1,194,915 12/30/86 Original Issue
243 727,800 12/30/86 Original Issue
412 630,000 12/30/86 Original Issue
485 398,769 11/16/92 Original Issue
607 491,167 12/30/86 Original Issue
758 833,669 11/16/92 Original Issue
23,300 1/17/97 Open Market Purchase
25,000 1/21/97 Open Market Purchase
10,000 1/21/97 Open Market Purchase
7,000 1/21/97 Open Market Purchase
5,000 1/21/97 Open Market Purchase
24,900 1/22/97 Open Market Purchase
22,600 1/22/97 Open Market Purchase
5,500 1/22/97 Open Market Purchase
10,000 2/25/97 Open Market Purchase
26,100 2/25/97 Open Market Purchase
50,000 2/25/97 Open Market Purchase
EXISTING PLEDGES TO OTHERS OF STOCK OF THE CORPORATION
No. of Pledged
Shares Date of Pledge Pledgee
-------------- -------------- -------
NONE