General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D Statement of Beneficial Ownership 10 36K
2: EX-1 Joint Filing Agreement 1 6K
3: EX-2 Asset Purchase Agreement 38 129K
4: EX-3 Pledge and Irrevocable Proxy 8± 32K
5: EX-4 Rider to Pledge Dated May 30, 1996 6 15K
EX-3 — Pledge and Irrevocable Proxy
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PLEDGE AND IRREVOCABLE PROXY
SECURITY AGREEMENT
(INCLUDING CONTROL STOCK)
Date May 30, 1996
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NAME NO. AND STREET
Episode USA, Inc. (Debtor and Debtor-in-Possession) 1040 Avenue of the Americas
CITY, VILLAGE OR TOWN COUNTY STATE
New York New York NY 10018 (Pledgor) and
LENDING OFFICE, DEPARTMENT OR DIVISION
MARINE MIDLAND BANK
NO. AND STREET CITY STATE
140 Broadway New York NY 10005-1180 (Secured Party)
agree as follows:
1. Security Interest.
In consideration of any extension of credit heretofore or hereafter made by
Secured Party to the Pledgor (Borrower), Pledgor hereby pledges, transfers and
assigns to Secured Party and grants to Secured Party a security interest
(Security Interest) in the following described personal property, in all
increases or profits received therefrom, in all substitutions therefor, and in
all Proceeds thereof in any form including, WITHOUT LIMITATION, all property
described in any schedule from time to time delivered by Pledgor to Secured
Party, (Collateral): any and all common stock in Mothers Work, Inc. issued to
the Pledgor pursuant to the Asset Purchase Agreement dated as of April 25, 1996
among the Pledgor, Mothers Work, Inc. and T3 Acquisition, Inc., as amended on
May 30, 1996 (the "Purchase Agreement") or otherwise.
2. Indebtedness Secured.
The Security Interest secures payment of any and all indebtedness
(Indebtedness) of Borrower to Secured Party, whether now existing or
hereafter incurred, of every kind and character, direct or indirect and
whether such Indebtedness is from time to time reduced and thereafter
increased, or entirely extinguished and thereafter reincurred, including,
without limitation: (a) Indebtedness not yet outstanding, but contracted for,
or with respect to which any other commitment by Secured Party exists;
(b) all interest provided in any instrument, document, or agreement
(including this Security Agreement) which accrues on any Indebtedness until
payment of such Indebtedness in full; (c) any moneys payable as hereinafter
provided; and (d) any debts owed or to be owed to others by Borrower which
Secured Party has obtained, or may obtain, by assignment or otherwise.
3. Representations and Warranties of Pledgor.
Pledgor represents and warrants and, so long as this Security Agreement
is in effect, shall be deemed continuously to represent and warrant that:
(a) each Instrument and Document of Title constituting Collateral is genuine and
in all respects what it purports to be; (b) Pledgor is the owner of the
Collateral free of all security interests or other encumbrances, except the
Security Interest; and (c) Pledgor is authorized to enter into this Security
Agreement.
4. Irrevocable Proxy.
Pledgor irrevocably constitutes and appoints Secured Party, whether or not
the Collateral has been transferred into the name of Secured Party or its
nominee, as Pledgor's proxy with full power, in the same manner, to the same
extent and with the same effect as if Pledgor were to do the same: (a) to
attend all meetings of stockholders of the issuer of the Collateral (Company)
held from the date hereof and to vote the Collateral at such meeting in such
manner as Secured Party shall, in its sole discretion, deem appropriate,
including, without limitation, in favor of the liquidation of the Company;
(b) to consent, in the sole discretion of Secured Party, to any and all action
by or with respect to the Company for which the consent of the stockholders of
the Company is or may be necessary or appropriate; and (c) without limitation,
to do all things which Pledgor can or could do as a stockholder of the Company,
giving to Secured Party full power of substitution and revocation; PROVIDED,
HOWEVER, that this proxy shall not be exercisable by Secured Party and Pledgor
alone shall have the foregoing powers (whether or not the Collateral has been
transferred into the name of Secured Party or its nominee) until Secured Party
has given to Pledgor written notice of Secured Party's election to exercise
this proxy and either (i) all or any part of any Indebtedness has been declared
by Secured Party to be, or has become, immediately due and payable as provided
in paragraph 9(b) hereof, or (ii) demand for payment has been made respecting
any Indebtedness which is payable on demand. This proxy shall terminate when
this Security Agreement is no longer in full force and effect as hereinafter
provided. Pledgor hereby revokes any proxy or proxies heretofore given by
Pledgor to any person or persons whatsoever and agrees not to give any other
proxies in derogation hereof until this Security Agreement is no longer in
full force and effect as hereinafter provided.
5. Covenants of Pledgor.
So long as this Security Agreement is in effect, Pledgor: (a) will defend
the Collateral against the claims and demands of all other parties; will keep
the Collateral free from all security interests or other encumbrances, except
the Security Interest; and will not sell, transfer, assign, deliver or otherwise
dispose of any Collateral or any interest therein without the prior written
consent of Secured Party; (b) will notify Secured Party promptly in writing of
any change in Pledgor's address, specified above; (c) in connection herewith,
will execute and deliver to Secured Party such financing statements, assignments
and other documents and do such other things relating to the Collateral and the
Security Interest as Secured Party may request, and pay all costs of title
searches and filing financing statements, assignments and other documents in all
public offices requested by Secured Party; (d) will pay all taxes, assessments
and other charges of every nature which may be imposed, levied or assessed
against the Collateral; and
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(e) if Secured Party in its sole discretion at any time or from time to time
determines that the liquidation value of the Collateral has become
inadequate, will immediately on demand (i) deliver to Secured Party additional
collateral of a kind and value satisfactory to Secured Party, or (ii) make
payments of Indebtedness, sufficient to cause the relationship of the
liquidation value of the Collateral to Indebtedness (including Indebtedness for
which a commitment to lend exists) to become satisfactory to Secured Party.
6. Registered Holder of Collateral.
Pledgor authorizes Secured Party to transfer the Collateral or any part
thereof into its own name or that of its nominee so that Secured Party or its
nominee may appear on record as the sole owner thereof; provided that so long as
no event of default has occurred. Secured Party shall deliver promptly to
Pledgor all notices, statements or other communications received by it or its
nominee as such registered owner, and upon demand and receipt of payment of
necessary expenses thereof, shall give to Pledgor or its designee a proxy or
proxies to vote and take all action with respect to such securities. After the
occurrence of any event of default, Pledgor waives all rights to be advised of
or to receive any notices, statements or communications received by Secured
Party or its nominee as such record owner, and agrees that no proxy or proxies
given by Secured Party to Pledgor or its designee as aforesaid shall thereafter
be effective.
7. Income from and interest on Collateral.
(a) Until the occurrence of an event of default, Pledgor reserves the
right to receive all income from or interest on the Collateral, and if Secured
Party receives any such income or interest prior to such event of default,
Secured Party shall pay the same promptly to Pledgor.
(b) Upon the occurrence of an event of default, Pledgor will not demand
or receive any income from or interest on the Collateral, and if Pledgor
receives any such income or interest without any demand by it, same shall be
held by Pledgor in trust for Secured Party in the same medium in which received,
shall not be commingled with any assets of Pledgor and shall be delivered to
Secured Party in the form received, properly indorsed to permit collection, not
later than the next business day following the day of its receipt. Secured Party
may apply the net cash receipts from such income or interest to payment of any
of the Indebtedness, provided that Secured Party shall account for and pay over
to Pledgor any such income or interest remaining after payment in full of the
Indebtedness.
8. Increases, Profits, Payments or Distributions.
(a) Whether or not an event of default has occurred, Pledgor authorizes
Secured Party: (i) to receive any increases in or profits on the Collateral
(including, without limitation, any stock issued as a result of any stock split
or dividend, any capital distributions and the like), and to hold the same as
part of the Collateral; and (ii) to receive any payment or distribution on the
Collateral upon redemption by, or dissolution and liquidation of, the Company;
to surrender the Collateral or any part thereof in exchange therefor; and to
hold the net cash receipts from any such payment or distribution as part of the
Collateral.
(b) If Pledgor receives any such increase, profits, payments or
distributions, Pledgor will receive and deliver same promptly to Secured Party
on the same terms and conditions set forth in paragraph 7(b) hereof respecting
income and interest, to be held by Secured Party as part of the Collateral.
9. Events of Default.
(a) Any of the following events or conditions shall constitute an event
of default hereunder: (i) nonpayment when due, whether by acceleration or
otherwise, of principal of or interest on any Indebtedness, or default by
Pledgor in the performance of any obligation, term or condition of this Security
Agreement or any other agreement relating to the Indebtedness between Pledgor or
Borrower and Secured Party; (ii) death or judicial declaration of incompetency
of Borrower, if an individual; if Borrower is generally not paying Borrower's
debts as such debts become due; (vi) the occurrence of any event described in
paragraph 9(a)(ii), (iii), (iv) or (v) hereof with respect to any indorser,
guarantor or any other party liable for, or whose assets or any interest therein
secures, payment of any Indebtedness (Third Party), or the occurrence of any
such event with respect to any general partner of Borrower, if Borrower is a
partnership; (vii) if any certificate, statement, representation, warranty or
audit heretofore or hereafter furnished by or on behalf of Pledgor, Borrower or
any Third Party, pursuant to or in connection with this Security Agreement, or
otherwise (including, without limitation, representations and warranties
contained herein), or as an inducement to Secured Party to extend any credit to
or to enter into this or any other agreement with respect to any Indebtedness,
proves to have been false in any material respect at the time as of which the
facts therein set forth were stated or certified, or to have omitted any
substantial contingent or unliquidated liability or claim against Pledgor,
Borrower or any such Third Party; or, if upon the date of execution of this
Security Agreement, there shall have been any materially adverse change in any
of the facts disclosed by any such certificate, statement, representation,
warranty or audit, which change shall not have been disclosed in writing to
Secured Party at or prior to the time of such execution; (viii) the
reorganization, merger or consolidation of Borrower (or the making of any
agreement therefor) without the prior written consent of Secured Party; (ix)
nonpayment by Borrower of any taxes, assessments, or other charges of any nature
which may be imposed, levied or assessed against Borrower or any of Borrower's
assets, prior to the date of attachment of any penalties or liens with respect
thereto (other than liens attaching prior to payment becoming due, if payment is
made when due), provided, however, Borrower shall not be required to pay any
such tax, assessment or other charge so long as its validity is being contested
in good faith by appropriate proceedings diligently conducted or (x) occurrence
of any Event of Default as defined in the Loan and Security Agreement dated
as of January 31, 1996 between the Borrower and the Secured Party, as
amended (the "Loan Agreement")
(b) Secured Party, at its sole election, may declare all of any part of any
Indebtedness not payable on demand to be immediately due and payable without
demand or notice of any kind upon the happening of any event of default (other
than an event of default under either paragraph 9(a)(iii) or (iv) hereof), or if
Secured Party in good faith believes that the prospect of payment of all or any
part of the Indebtedness or performance of Pledgor's obligations under this
Security Agreement or any other agreement relating to the Indebtedness now or
hereafter in effect between Pledgor
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or Borrower and Secured Party is impaired. All or any part of any Indebtedness
not payable on demand shall be immediately due and payable without demand or
notice of any kind upon the happening of one or more events of default under
paragraph 9(a)(iii) or (iv) hereof. The provisions of this paragraph are not
intended in any way to affect any rights of Secured Party with respect to any
indebtedness which may now or hereafter be payable on demand.
(c) Secured Party's rights and remedies with respect to the Collateral
shall be those of a Secured Party under the Uniform Commercial Code and under
any other applicable law, as the same may from time to time be in effect, in
addition to those rights granted herein and in any other agreement now or
hereafter in effect between Pledgor and Secured Party.
(d) Without in any way requiring notice to be given in the following time
and manner, Pledgor agrees that any notice by Secured Party of sale, disposition
or other intended action hereunder or in connection herewith, whether required
by the Uniform Commercial Code or otherwise, shall constitute reasonable notice
to Pledgor if such notice is mailed by regular or certified mail, postage
prepaid, at least five (5) days prior to such action, to Pledgor's address
specified above or to any other address which Pledgor has specified in writing
to Secured Party as the address to which notices hereunder shall be given to
Pledgor.
(e) Pledgor agrees to pay on demand all costs and expenses incurred by
Secured Party in enforcing this Security Agreement, in realizing upon or
protecting any Collateral and in enforcing and collecting any Indebtedness or
any guaranty thereof, including, without Limitation, if Secured Party retains
counsel for advice, suit, appeal, insolvency or other proceedings under the
federal Bankruptcy Code or otherwise, or for any of the above purposes, the
actual attorneys' fees incurred by Secured Party. Payment of all moneys
hereunder is secured by the Collateral.
10. Miscellaneous.
(a) Pledgor authorizes Secured Party, without notice or demand and
without affecting Pledgor's obligations hereunder, whether or not Borrower and
Pledgor are the same, from time to time: (i) to renew, extend, increase,
accelerate or otherwise change the time for payment of, the terms of or the
interest on the indebtedness or any part thereof; (ii) to take from any party
and hold collateral (other than the Collateral) for the payment of the
indebtedness or any part thereof, and to exchange, enforce or release such
collateral or any part thereof; (iii) to accept and hold any indorsement or
guaranty of payment of the indebtedness or any part thereof and to release,
substitute or modify any such obligation of any such indorser or guarantor, or
any party who has given any security interest in any other collateral as
security for the payment of the indebtedness or any part thereof, or any other
party in any way obligated to pay the Indebtedness or any part thereof; (iv)
upon the occurrence of any event of default as hereinabove provided, to direct
the order or manner of the disposition of the Collateral and any and all other
collateral and the enforcement of any and all indorsements and guaranties
relating to the Indebtedness or any part thereof as Secured Party, in its sole
discretion, may determine; and (v) to determine, in its sole discretion, how,
when and what application of payments and credits, if any, shall be made on
the Indebtedness or any part thereof.
(b) Pledgor hereby appoints Secured Party as Pledgor's attorney-in-fact
(without requiring Secured Party) to perform all acts which Secured Party deems
appropriate to perfect and continue the Security Interest and to protect,
preserve and realize upon the Collateral. This power of attorney shall not be
affected by the subsequent disability or incompetence of Pledgor.
(c)(i) If any Borrower and Pledgor are the same, as further security for
payment of the Indebtedness, Pledgor hereby grants to Secured Party a Security
Interest in and lien on any and all property of Pledgor which is or may
hereafter be in the possession or control of Secured Party in any capacity or of
any third party acting on its behalf, including, without limitation, all deposit
and other accounts and all moneys owed or to be owed by Secured Party to
Pledgor; and with respect to all of such property, Secured Party shall have the
same rights hereunder as it has with respect to the Collateral. (ii) Without
limiting any other right of Secured Party, whenever Secured Party has the right
to declare any Indebtedness to be immediately due and payable (whether or not it
has so declared), Secured Party at its sole election, if any Borrower and
Pledgor are the same, may set off against the Indebtedness any and all moneys
then or thereafter owed to Pledgor by Secured Party in any capacity, whether or
not the indebtedness or the obligation to pay such moneys owed by Secured Party
is then due, and Secured Party shall be deemed to have exercised such right of
set off immediately at the time of such election even though any charge therefor
is made or entered on Secured Party's records subsequent thereto.
(d) Upon Pledgor's failure to perform any of its duties hereunder, Secured
Party may, but shall not be obligated to, perform any or all such duties,
including, without limitation, if any Borrower and Pledgor are the same, payment
of taxes, assessments, insurance and other charges and expenses as herein
provided, and Pledgor shall pay an amount equal to the cost thereof to
Secured Party on demand by Secured Party. Payment of all moneys hereunder shall
be secured by the Collateral.
(e) Unless any instrument, document, or agreement evidencing any
Indebtedness expressly provides a rate for the accrual of interest after such
Indebtedness becomes due, the rate at which interest on such Indebtedness shall
accrue after such Indebtedness becomes due, whether by reason of default or
otherwise and until such Indebtedness is paid in full, shall be the rate
provided in such instrument, document, or agreement which is in effect
immediately prior to such Indebtedness becoming due.
(f) No course of dealing between Pledgor and Secured Party and no delay or
omission by Secured Party in exercising any right or remedy hereunder or with
respect to any Indebtedness shall operate as a waiver thereof or of any other
right or remedy, and no single or partial exercise thereof shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
Secured Party may remedy any default by Pledgor hereunder or with respect to any
Indebtedness in any reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by Pledgor. All rights and
remedies of Secured Party hereunder are cumulative.
(g) Secured Party shall have no obligation to take, and Pledgor shall have
sole responsibility for taking, any and all steps to preserve rights against any
and all prior parties to any Instrument constituting Collateral, whether or not
in Secured Party's possession. Secured Party shall not be responsible to Pledgor
for loss or damage resulting from Secured Party's failure to enforce or collect
any such Collateral or to collect any moneys due or to become due thereunder.
Pledgor waives protest of any instrument constituting Collateral at any time
held by Secured Party on which Pledgor is in any way liable and waives notice of
any other action taken by Secured Party.
(h) The rights and benefits of Secured Party hereunder shall, if Secured
Party so directs, inure to any party acquiring any interest in the Indebtedness
or any part thereof.
(i) Secured Party and Pledgor as used herein shall include the heirs,
executors or administrators, or successors or assigns, of those parties.
(j) If more than one Pledgor executes this Security Agreement, the term
"Pledgor" shall include each as well as all of them and their obligations,
warranties and representations hereunder shall be joint and several.
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(k) No modification, rescission, waiver, release or amendment of any
provision of this Security Agreement shall be made except by a written agreement
subscribed by Pledgor and by a duly authorized officer of Secured Party.
(l) This Security Agreement and the transaction evidenced hereby shall
be construed under the laws of New York State, as the same may from time to time
be in effect.
(m) All terms, unless otherwise defined in this Security Agreement,
shall have the definitions set forth in the Uniform Commercial Code adopted in
New York State, as the same may from time to time be in effect.
(n) This Security Agreement is and is intended to be a continuing
Security Agreement and shall remain in full force and effect until the officer
in charge of the Lending Office, Department or Division of Secured Party
indicated above shall actually receive from Pledgor written notice of its
discontinuance; provided, however, this Security Agreement shall remain in full
force and effect thereafter until all of the Indebtedness outstanding, or
contracted or committed for (whether or not outstanding), before the receipt of
such notice by Secured Party, and any extensions or renewals thereof (whether
made before or after receipt of such notice), together with interest accruing
thereon after such notice, shall be finally and irrevocably paid in full. If,
after receipt of any payment of all or any part of the Indebtedness, Secured
Party is for any reason compelled to surrender such payment to any person or
entity, because such payment is determined to be void or voidable as a
preference, impermissible set off, or a diversion of trust funds, or for any
other reason, this Security Agreement shall continue in full force
notwithstanding any contract action which may have been taken by Secured Party
in reliance upon such payment, and any such contrary action so taken shall be
without prejudice to Secured Party's rights under this Security Agreement and
shall be deemed to have been conditioned upon such payment having become final
and irrevocable.*
SECURED PARTY: PLEDGOR:
MARINE MIDLAND BANK EPISODE USA, INC. (Debtor and Debtor-in-
Possession)
By /s/ Lita B. Chow
_____________________________________________
By /s/ John Northington Name: Lita B. Chow
______________________ _____________________________________________
Name: John Northington Title: President
Title: Vice President
* The attached "Rider to Pledge and Irrevocable Proxy Security Agreement
(Including Control Stock)" dated May 30, 1996 between Marine Midland Bank and
Episode USA, Inc. (debtor and debtor-in-possession) shall be an integral part of
this Security Agreement, and is hereby incorporated herein.
Dates Referenced Herein
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| This ‘SC 13D’ Filing | | Date | | First | | Last | | | Other Filings |
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| |  |
| Filed on: | | 7/22/96 | | | | | | | None on these Dates |
| | 5/30/96 | | 1 | | 4 |
| | 4/25/96 | | 1 |
| | 1/31/96 | | 2 |
| List all Filings |
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