Exhibit 10.7

PLEDGE AND SECURITY AGREEMENT

(Mezzanine Loan)

THIS PLEDGE AND SECURITY AGREEMENT (Mezzanine Loan) (this “Agreement”) is made
as of November 3, 2016, by GIRAFFE JUNIOR HOLDINGS, LLC, a Delaware limited
liability company (“Borrower”), in favor of BRIGADE LEVERAGED CAPITAL STRUCTURES
FUND LTD., BRIGADE CREDIT FUND II LTD., BRIGADE STRUCTURED CREDIT FUND LTD., LOS
ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION, BRIGADE DISTRESSED VALUE MASTER
FUND LTD., THE COCA-COLA COMPANY MASTER RETIREMENT TRUST, FEDEX CORPORATION
EMPLOYEES’ PENSION TRUST, DELTA MASTER TRUST, BRIGADE OPPORTUNISTIC CREDIT
FUND—ICIP, LTD. and BRIGADE OPPORTUNISTIC CREDIT FUND 16 LLC (together with each
of their respective successors and assigns, collectively, “Lender”).

RECITALS

A. WHEREAS, on the date hereof, Lender has made a loan to Borrower in the amount
of $88,000,000.00 (the “Loan”) pursuant to the terms of that certain Mezzanine
Loan Agreement of even date herewith by and between Lender and Borrower (as
amended, modified, supplemented or replaced from time to time, the “Loan
Agreement”).

B. WHEREAS, Toys “R” Us Property Company II, LLC, a Delaware limited liability
company (“Issuer”), is the owner and/or leasehold owner of certain parcels of
real property more particularly described in the Loan Agreement.

C. WHEREAS, Issuer was formed as a Delaware limited liability company and is
governed by the terms and provisions of that certain Third Amended and Restated
Limited Liability Company Agreement of Issuer, dated as of the date hereof (as
amended, modified, supplemented or restated in accordance with the terms of the
Loan Agreement, the “Formation Agreement”).

D. WHEREAS, Borrower is the legal and beneficial owner of 100% of the issued and
outstanding membership interests in Issuer.

F. WHEREAS, Lender is unwilling to make the Loan unless Borrower enters into
this Agreement.

NOW, THEREFORE, for Ten Dollars ($10.00) and in consideration of the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

Section 1. Capitalized Terms. All capitalized terms used but not defined herein
shall have the respective meanings ascribed thereto in the Loan Agreement and,
for the purposes of this Agreement, the following capitalized terms shall have
the following meanings:

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“Article 8 Matter” means any action, decision, determination or election by
Issuer or its member(s), shareholders or partners, as applicable, that its
membership interests, partnership interests, stock or other equity interests, as
applicable, be, or cease to be, a “security” as defined in and governed by
Article 8 of the Uniform Commercial Code, and all other matters related to any
such action, decision, determination or election.

“Bankruptcy Code” means Title 11 of the United States Code, as amended,
modified, succeeded or replaced, from time to time.

“Distributions” means all distributions (whether in cash or in kind) and all
interest in respect of, and all proceeds of, any instrument or interest
constituting part of the Pledged Collateral, of whatever kind or description,
real or personal, whether in the ordinary course or in partial or total
liquidation or dissolution, or any recapitalization, reclassification of
capital, or reorganization or reduction of capital, or otherwise.

“Equity Interests” means all limited liability company membership interests or
other equity interests of, and all other right, title and interest of, Borrower
in and to Issuer, including the interests described on Schedule 1 attached
hereto.

“Event of Default” shall have the meaning ascribed thereto in the Loan
Agreement.

“General Intangibles” shall have the meaning ascribed thereto in Article 9 of
the UCC.

“No-Action Letters” means various No-Action Letters issued by the SEC staff as
described in Section 14(b) below.

“Obligations” means Borrower’s obligations provided in the Loan Agreement, the
Note and the other Loan Documents to pay the Indebtedness payable to Lender in
respect of the Loan thereunder, and to perform and observe all of the terms,
covenants and provisions of each of the Loan Documents, including the payment of
interest that, but for the commencement of a case under the Bankruptcy Code,
would accrue on such Indebtedness.

“Pledged Collateral” means all of Borrower’s right, title and interest, whether
now owned or hereafter acquired, in, under and to (i) the Formation Agreement
and the Equity Interests, including, without limitation, Borrower’s share of the
profits, losses and capital of Issuer, and all Voting Rights, claims, powers,
privileges, benefits, options or rights of any nature whatsoever which currently
exist or may be issued or granted by Issuer to Borrower, and all instruments,
whether heretofore or hereafter acquired, evidencing such rights and interests,
(ii) the Account Collateral, (iii) all Distributions, (iv) all General
Intangibles relating to the foregoing, (v) the proceeds (including claims
against third parties), products and accessions of the foregoing, (vi) all
replacements and substitutions of the foregoing, (vii) all other rights
appurtenant to the property described in foregoing clauses (i) through (vi), and
(viii) any stock certificates, share certificates, limited liability company
certificates, partnership certificates or other certificates or instruments
evidencing the foregoing.

 

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“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as it may be amended from
time to time.

“Security Interest” shall have the meaning ascribed thereto in Section 2 hereof.

“Securities Laws” means the Securities Act and applicable state securities laws.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York.

“Voting Rights” means all of Borrower’s rights under the Formation Agreement to
vote and give approvals, consents, decisions and directions and exercise any
other similar right with respect to the Pledged Collateral.

Section 2. Pledge. Borrower hereby grants, pledges, hypothecates, transfers and
assigns to Lender a first priority perfected, continuing security interest in
and lien on the Pledged Collateral and in all proceeds thereof (the “Security
Interest”) as collateral security for the prompt and complete repayment and
performance when due (whether at the stated maturity or otherwise) of the
Obligations. No filing or other action is or will be necessary to perfect such
first priority security interest of Lender in the Equity Interests that are
represented by a certificate and that constitute certificated securities within
the meaning of Article 8 of the UCC, except for delivery to Lender of the
certificates evidencing the Equity Interests endorsed or accompanied by
appropriate powers duly endorsed in blank. The first priority security interest
of Lender in any of the Pledged Collateral that is not represented by a
certificate or that is otherwise not a “security” within the meaning of Article
8 of the UCC, if any, shall be perfected by the filing of a financing statement
or statements as hereinafter provided.

Section 3. Distributions. Except during the continuance of an Event of Default
or as otherwise set forth in the Loan Documents to the contrary, Borrower shall
have the right to receive Distributions, profits, losses, income, surplus,
return on capital and all other proceeds paid in respect of the Pledged
Collateral. Borrower hereby irrevocably authorizes and directs Issuer, upon the
occurrence and during the continuance of an Event of Default under the Loan
Agreement, to distribute, transfer, pay and deliver directly to Lender, and not
to Borrower, any and all Distributions at such time and in such manner as such
Distributions would otherwise be distributed, transferred, paid and delivered to
Borrower, for application in accordance with the Loan Agreement. If, during the
continuance of an Event of Default under the Loan Agreement or otherwise in
contravention of the Loan Documents, Borrower receives any Distributions,
Borrower shall accept the same as Lender’s agent and hold the same in trust on
behalf of and for the benefit of Lender and shall promptly deliver the same
forthwith to Lender for application in accordance with the Loan Agreement,
together with appropriate forms of assignment, UCC financing statements, and
other appropriate instruments, if necessary, indicating the Security Interests
of Lender in and to such Distribution. Borrower authorizes and directs Lender to
apply any Distributions received by Lender in the manner described in the Loan
Agreement.

 

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Section 4. Voting Rights.

(a) Borrower hereby collaterally assigns the Voting Rights to Lender, subject to
the terms and provisions of this Agreement and the other Loan Documents,
provided that Lender may not exercise any such Voting Rights unless an Event of
Default has occurred and is continuing.

(b) Except during the continuance of an Event of Default, Borrower may exercise
the Voting Rights, provided that Borrower shall not exercise the Voting Rights
in a manner which would result in a violation of any provision of this
Agreement, the Loan Agreement or any other Loan Document. Upon the occurrence
and during the continuance of an Event of Default, all rights of Borrower to
exercise the Voting Rights shall cease and Lender shall have the right to
exercise, in person or by its nominees or proxies, all Voting Rights assigned to
it hereunder and Lender shall exercise such Voting Rights in such manner as
Lender in its sole discretion shall deem to be in Lender’s best interests
(subject to the terms of this Agreement and the other Loan Documents). Upon the
occurrence and during the continuance of an Event of Default, Borrower shall
effect the directions of Lender in connection with any such exercise in
accordance with this Agreement.

(c) In connection with Lender’s exercise of the Voting Rights, Borrower shall
cause Issuer to rely on a notice from Lender stating that an Event of Default
has occurred and is continuing under the Loan Agreement or any other Loan
Document, in which event no further direction from Borrower shall be required to
effect the assignment of Voting Rights hereunder from Borrower to Lender, and
Issuer shall immediately permit Lender to exercise all of the Voting Rights in
respect of the business and affairs of Issuer. If the applicable Event of
Default is no longer continuing, Borrower shall again automatically have all of
the rights to exercise the Voting Rights and Lender shall so notify Issuer.

(d) Borrower acknowledges that, except for this Agreement and the other Loan
Documents, it has not entered into, and it is not bound by the terms of, any
agreement or understanding, whether oral or written, with respect to the
purchase, sale, transfer or voting of any Voting Rights.

Section 5. Termination of Agreement. Immediately upon payment in full of all of
the Obligations in accordance with the terms of the Loan Agreement and the other
Loan Documents, this Agreement (including, without limitation, any
power-of-attorney or proxy given hereunder or in connection herewith) shall
immediately cease, terminate and be of no further force or effect. Thereafter,
upon the request of Borrower and at Borrower’s sole cost and expense, Lender
shall deliver to Borrower, without any representations, warranties or recourse
of any kind whatsoever, such of the Pledged Collateral (including any
certificate or certificates evidencing the Equity Interests, if any, along with
the partnership, membership or stock powers, as applicable, endorsed in blank,
if any) as then may be held or controlled by Lender hereunder or under the other
Loan Documents, and execute and deliver to Borrower such documents as Borrower
may reasonably request to evidence such termination, including, without
limitation, UCC termination statements or similar documents to release Lender’s
lien on the Pledged Collateral; provided that if Lender has misplaced or is
otherwise unable to deliver the Pledged Collateral (including any certificate or
certificates evidencing the Equity Interests, along with the membership powers
endorsed in blank), Lender shall execute and deliver to Borrower a lost
certificate affidavit and indemnity with respect to the Pledged Collateral
containing

 

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commercially reasonable terms agreed upon by Lender and Borrower. Any Pledged
Collateral released from the Lien of this Agreement, the Loan Agreement and the
other Loan Documents in accordance therewith pursuant to this Section 5 shall,
effective upon such release, no longer be deemed “Pledged Collateral” for any
purpose under this Agreement or the other Loan Documents. Lender agrees, at the
request and sole cost and expense of Borrower, to notify Issuer and any other
third party reasonably requested by Borrower of such termination; provided that,
if Borrower shall arrange for repayment of the Obligations in their entirety by
a third party, at Borrower’s request and at its sole cost and expense, Lender
shall assign the Note, this Agreement and any other Loan Documents (to the
extent requested by Borrower) to such third party, without recourse,
representation or warranty.

Section 6. Liability. The trustees, officers, directors, employees and agents of
Lender shall have no personal liability under this Agreement, except to the
extent found by a final, non-appealable judgment of a court of competent
jurisdiction to have arisen from Lender’s gross negligence or willful
misconduct, and any obligation of Lender under this Agreement to Borrower or
Issuer shall be satisfied solely from the assets of Lender.

Section 7. Rights of Lender.

(a) Lender shall not be liable for failure to collect or realize upon the
Obligations or any collateral security or guarantee therefor, or any part
thereof, or for any delay in so doing nor be under any obligation to take any
action whatsoever with regard thereto. Subject to the other provisions of this
Agreement, the Loan Agreement and the other Loan Documents, any part or all of
the Pledged Collateral held by Lender may, without notice, but only during the
existence of an Event of Default, be transferred into the name of Lender or its
nominee and Lender or its nominee may thereafter without notice, exercise all
Voting Rights and other rights in respect of the Pledged Collateral, including
the exercise of any and all rights of conversion, exchange, subscription or any
other rights, privileges or options in respect of the Pledged Collateral, as if
it were the absolute owner thereof, all without liability except to account for
property actually received by Lender or its nominee; provided, however, that
Lender or its nominee shall have no duty to exercise any of the foregoing
actions, or any liability for failure to do so or delay in so doing.

(b) Lender shall not be liable for the consequence of any Voting Rights cast or
given by Lender in accordance with this Agreement, except for any such liability
found by a final, non-appealable judgment of a court of competent jurisdiction
to have resulted from Lender’s gross negligence, bad faith or willful
misconduct.

(c) Except as otherwise expressly set forth in this Agreement, and except to the
extent found by a final, non-appealable judgment of a court of competent
jurisdiction to have been caused by Lender’s gross negligence, bad faith or
willful misconduct, Lender shall have no liability to Borrower with respect to
the receipt and application by Lender of Distributions, the holding by Lender of
any Pledged Collateral pursuant to and in accordance with this Agreement and the
other Loan Documents, or Lender’s taking, or failure to take, any action
(including the obtaining of insurance) with respect to any Pledged Collateral.

 

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(d) Borrower hereby authorizes Lender in its absolute discretion, prior to the
termination of this Agreement pursuant to Section 5 hereof, (i) to file any and
all financing and continuation statements in any jurisdiction or jurisdictions
that Lender deems appropriate (including, without limitation, all initial
financing statements and continuation statements), naming Borrower as debtor,
with respect to any of the Pledged Collateral (including such as may be
necessary to renew, extend and continue the perfection of the Security Interest
of Lender) without consent of or authentication by Borrower and consents to a
photocopy or other reproduction of this Agreement or of a financing statement
being sufficient as a financing statement; and (ii) to file UCC financing
statements indicating that the collateral covered by such financing statements
is “all assets in which Borrower now or hereafter has rights” or “all assets.”

Section 8. Remedies. Upon the occurrence and during the continuance of an Event
of Default, Lender, without demand of performance or other demand, advertisement
or notice of any kind (except as specified in the Loan Agreement, the other Loan
Documents or as specified below or required by law) to or upon Borrower or any
other Person (all and each of which demands, advertisements and/or notices is
hereby expressly waived to the extent permitted by applicable law), may, without
obligation to resort to other security, and in addition to and not in limitation
of any and all other remedies reserved to Lender hereunder or at law or in
equity, forthwith collect, receive, appropriate and realize upon the Pledged
Collateral, or any part thereof, and/or may forthwith sell, assign, give an
option or options to purchase, contract to sell or otherwise dispose of and
deliver said Pledged Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or at Lender’s
offices or elsewhere upon such terms and conditions as it may reasonably deem
advisable and at such prices as it may deem best with respect to its own
interests, for cash or on credit or for future delivery without assumption of
any credit risk, with the right to Lender upon any such sale or sales, public or
private, to purchase the whole or any part of the Pledged Collateral so sold,
free of any right or equity of redemption in Borrower, which right or equity is
hereby expressly waived and released to the extent permitted by law. Upon the
occurrence and during the continuance of an Event of Default, Lender shall have
the right to proceed against the Pledged Collateral of Borrower as it shall
determine in its sole discretion. Lender shall not be obligated to make any sale
of the Pledged Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of the Pledged Collateral may have been given. Lender
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 the sale of all or any
part of the Pledged Collateral is made on credit or for future delivery, the
Pledged Collateral so sold shall be retained by Lender until the sale price is
paid by the purchaser or purchasers thereof, Lender shall not incur any
liability in case any such purchaser or purchasers shall fail to take and pay
for the Pledged Collateral so sold and, in case of any such failure, such
Pledged Collateral may be sold again upon like notice. To the extent permitted
by law, Borrower hereby waives all rights of marshaling the Pledged Collateral
and any other security at any time held by Lender and any right of valuation or
appraisal. Lender shall apply the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
out-of-pocket costs and expenses of every kind incurred therein or incidental to
the care, safekeeping or otherwise of any and all of the Pledged Collateral or
in any way relating to the rights of Lender hereunder, including reasonable
out-of-pocket attorney’s fees and legal

 

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expenses, to the payment in whole or in part, of the Obligations together with
interest thereon at the Default Rate under the Loan Agreement, and only after so
applying such net proceeds and after the payment by Lender of any other amount
required by any provision of law, including, without limitation, the UCC and any
version of the Uniform Commercial Code in effect in any applicable jurisdiction,
need Lender account for the surplus, if any, to Borrower. Borrower agrees that
Lender need not give more than 10 Business Days’ notice of the time and place of
any public sale or of the time and place if any private sale or other intended
disposition is to take place notwithstanding Section 9-612(b) of the UCC and
that such notice is commercially reasonable notification of such matters. No
notification need be given to Borrower if it has, after default, signed a
statement renouncing or modifying any right to notification of sale or other
intended disposition. Lender’s rights and remedies hereunder are cumulative, at
law or in equity, with any and all of Lender’s other rights in connection with
the Loan, and Lender may exercise any of such rights or remedies in any order.
In addition to the rights and remedies granted to it in this Agreement and any
other instrument securing, evidencing or relating to any of the Obligations,
Lender shall have all the rights and remedies of a secured party under the UCC,
as if such rights and remedies were fully set forth herein, and any rights and
remedies of a secured party under any version of the Uniform Commercial Code in
effect in any applicable jurisdiction in which such rights or remedies are
sought to be enforced.

Section 9. Right to Become Member, Shareholder or Partner. (a) In addition to
the remedies set forth in Section 8 hereof, upon the occurrence and during the
continuance of an Event of Default, Lender may, by delivering written notice to
Issuer and Borrower, after having acquired the right, title and interest of
Borrower’s Equity Interests, succeed, or designate one or more nominees(s) to
succeed, to all right, title and interest of Borrower (including, without
limitation, the right, if any, to vote on or take any action with respect to
Issuer) as a member, shareholder or partner of Issuer, as applicable, relating
to the Equity Interests acquired. Borrower hereby irrevocably authorizes and
directs Issuer on receipt of any such notice (i) to deem and treat Lender or its
nominee in all respects as a member, shareholder or partner, as applicable (and
not merely an assignee of a member, shareholder or partner, as applicable), of
Issuer entitled to exercise all the rights, powers and privileges (including the
right to vote on or take any action with respect to any and all membership,
shareholder or partnership matters, as applicable, pursuant to the Formation
Agreement) to receive all Distributions, to be credited with the capital account
and to have all other rights, powers and privileges appertaining to such
membership, shareholder or partnership interests, as applicable, to which
Borrower would have been entitled had Borrower’s membership, shareholder or
partnership interests, as applicable, not been transferred to Lender or such
nominee, (ii) to execute amendments to the Formation Agreement admitting Lender
or such nominee as a member, shareholder or partner, as applicable, in place of
Borrower and (iii) to issue the membership, shareholder or partnership
certificate(s), as applicable, in the name of Lender or its nominee, with
respect to each of the Equity Interests represented by a certificate or
certificates.

(b) Notwithstanding anything to the contrary contained herein, upon acquisition
of any portion of the Pledged Collateral by Lender or any other Person through
foreclosure or assignment in lieu of foreclosure, Borrower shall not be required
to make additional contributions or other payments to Issuer.

 

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Section 10. Certain Understandings of Parties; Certificated Securities. The
parties acknowledge and agree that all of the Equity Interests have been
“certificated”, are “securities” governed by Article 8 of the UCC and, during
the terms of this Agreement the Equity Interests are and will be deemed
securities under Article 8 and Article 9 of the UCC, including without
limitation, Section 8-103(c) of the UCC. Notwithstanding the foregoing, to
better assure the perfection of the security interest of Lender in the Equity
Interests concurrently with the execution and delivery of this Agreement, and
subsequently from time to time upon Lender’s written request following Lender’s
transfer of all or any portion of the Loan, Borrower shall send written
instructions in the form of Exhibit A hereto to the Issuer. Borrower shall
promptly deliver to Lender, or cause Issuer or any other entity issuing the
Equity Interests to deliver directly to Lender, share certificates or other
instruments representing any Equity Interests acquired or received after the
date of this Agreement with a stock or bond power duly executed in blank by
Borrower in the form reasonably acceptable to Lender. If at any time Lender
notifies Borrower that it requires additional stock or bond powers endorsed in
blank, Borrower shall promptly execute in blank and deliver the requested stock
or bond power to the requesting party.

Section 11. Representations, Warranties and Covenants of Borrower. Borrower
hereby represents and warrants to and covenants and agrees with Lender with
respect to itself and the Pledged Collateral that:

(a) Borrower is, and at all times will maintain its existence as, a limited
liability company organized solely under the laws of the State of Delaware, has
all requisite power and authority to execute, deliver and perform this Agreement
and the Formation Agreement and to consummate the transactions contemplated
hereby.

(b) This Agreement has been duly authorized, executed and delivered by Borrower,
is the legal, valid and binding obligation of Borrower, and is enforceable as to
Borrower in accordance with its terms, subject, however, to bankruptcy,
insolvency and other rights of creditors generally and to general principles of
equity.

(c) The execution, delivery, observance and performance by Borrower of this
Agreement and the transactions contemplated hereby will not result in any
violation of the Formation Agreement or, to Borrower’s knowledge, of any
constitutional provision, law, statute, ordinance, rule or regulation applicable
to it; or of any judgment, decree or order applicable to it and will not
conflict with, or cause a breach of, or default under, any such term or, except
for the liens created or contemplated hereby, result in the creation of any
mortgage lien, pledge, charge or encumbrance upon any of its properties or
assets pursuant to any such term.

(d) It is not necessary for Borrower to obtain or make any (i) governmental
consent, approval or authorization, registration or filing from or with any
governmental authorities or (ii) consent, approval, waiver or notification of
partners, creditors, lessors or other nongovernmental persons, in each case, in
connection with the execution and delivery of this Agreement or the consummation
of the transactions herein presently contemplated which has not been filed or
obtained.

 

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(e) Borrower is as of the date hereof (i) the sole economic, managing and voting
member of Issuer, (ii) the owner of 100% of the membership interests in Issuer
and (iii) the sole owner of all direct beneficial interests in the Pledged
Collateral. Borrower owns the Pledged Collateral, and the Pledged Collateral is
and shall remain, free and clear of any lien, mortgage, encumbrance, charge,
pledge, security interest, or claim of any kind (including, without limitation,
any unconditional sale or other title retention agreement) other than as created
by this Agreement or as permitted by the Loan Agreement.

(f) The Equity Interests are, and Borrower covenants and agrees that it will
ensure at all times that such Equity Interests remain, “securities” within the
meaning of the UCC and, in particular, with respect to the Equity Interests that
are represented by a certificate or certificates, are “certificated securities”
within the meaning of Section 8-102(a)(4) of the UCC, and Borrower has taken all
steps necessary to afford Lender “control” of such Equity Interests within the
meaning of the UCC.

(g) Borrower covenants and agrees to take commercially reasonable efforts to
defend, at its sole cost and expense, Lender’s right, title and Security
Interest in and to the Pledged Collateral and the proceeds thereof, created
pursuant hereto, against the claims and demands of all Persons whomsoever.

(h) The Equity Interests have been duly authorized and validly issued and are
fully paid and nonassessable.

(i) The Equity Interests constitute 100% of the interests in capital, profits,
distribution, management and voting rights in Issuer.

(j) Upon Lender obtaining and maintaining possession of the “security
certificates” (as defined in Section 8-102(a)(16) of the UCC) identified on
Schedule 1 and the timely filing of a UCC financing statement adequately
describing the Pledged Collateral in the office of the Secretary of State of the
State of Delaware, all steps necessary to create and perfect the security
interest created by this Agreement as a valid and continuing first priority lien
on, and first priority perfected (subject to possession of the certificates and
filing of the financing statements referenced above) security interest in, the
Pledged Collateral, in favor of Lender, prior to all other liens, security
interests and other claims of any sort whatsoever, have been taken. Borrower has
not granted a security interest in the Pledged Collateral to any other party,
and the security interest granted pursuant to this Agreement in the Pledged
Collateral constitutes a valid, perfected first priority security interest in
the Pledged Collateral subject to Permitted Encumbrances.

(k) Borrower has not changed its name, or used, adopted or discontinued the use
of any trade name, fictitious name or other trade name or trade style.

(l) Borrower will not change its name in any manner which could make any
financing or continuation statement filed hereunder seriously misleading within
the meaning of Section 9-507(c) of the UCC (or any other then-applicable
provision of the UCC) unless Borrower shall have given Lender at least 10
Business Days’ prior notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such change,
if it is impossible to take such action in advance) necessary or reasonably
requested by Lender to amend such financing statement or continuation statement
so that it is not seriously misleading.

 

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(m) Borrower shall perform all of its obligations under the Formation Agreement
and shall not amend the Formation Agreement in contravention of the Loan
Agreement or in any manner that would reduce or impede Lender’s rights or
remedies hereunder.

Section 12. Certain Covenants.

(a) No Disposition. Borrower agrees that, except to the extent permitted under
the Loan Agreement, it will not directly or indirectly sell, assign, transfer,
exchange, encumber or otherwise dispose of, or grant any option with respect to,
the Pledged Collateral, nor will it create, incur or permit to exist any
security interest with respect to any of the Pledged Collateral or any proceeds
thereof, except for the Security Interest provided for by this Agreement.

(b) Delivery of Certificates and Instruments. Any and all certificates or
instruments at any time representing or evidencing any Pledged Collateral shall
be immediately delivered to and held by or on behalf of Lender pursuant hereto,
and shall be in suitable form for transfer by delivery, or shall be accompanied
by instruments of transfer or assignment, duly executed in blank, all in form
and substance reasonably satisfactory to Lender. Lender shall have the right, at
any time, after the occurrence and during the continuance of an Event of
Default, to transfer to or to register in the name of Lender or its nominee any
Pledged Collateral. In addition, Lender 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.

(c) Other Units. Borrower has not and shall not permit the issuance of any units
of membership interest, stock or partnership interest, as applicable, or other
securities in addition to or in substitution for the Equity Interests.

Section 13. Other Partners, Shareholders and/or Members Shall Join. Every
member, shareholder or partner, as applicable, hereinafter admitted to Issuer as
a successor or additional member, shareholder or partner (to the extent
permitted under the Loan Documents) shall at Lender’s request and as a condition
thereto, join in this Agreement and agree to be bound by the terms and
provisions hereof, pursuant to a written joinder and assumption agreement in
form and substance reasonably satisfactory to Lender, and execute and deliver
appropriate forms of assignment and other appropriate instruments indicating the
Security Interest of Lender in the member’s Pledged Collateral. The failure of
any new member, shareholder or partner, as applicable, to execute and deliver
the same prior to or contemporaneously with its admission as a member,
shareholder or partner in Issuer, if such failure shall continue for 10 days
after request by Lender, shall constitute an Event of Default hereunder and
under the terms and provisions of the Loan Documents.

 

10

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Section 14. Foreclosure Sales of Securities.

(a) No Obligation to Register. In exercising its remedies hereunder, Lender may
be unable to sell Equity Interests publicly pursuant to this Agreement without
registering them under the Securities Laws, which would likely be an expensive
and time-consuming undertaking and, in fact, one which might be impossible to
accomplish even if Lender were willing to invest the necessary time and money.
Even though Lender may be able to register Equity Interests under the Securities
Laws, it may nonetheless regard such registration as too expensive or too
time-consuming (such determination to be made in Lender’s sole discretion). If
Lender sells Equity Interests without registration, Lender may be required to
sell them only in private sales to a restricted group of offerees and purchasers
who fulfill certain suitability standards and who will be obliged to agree,
among other things, to acquire the Equity Interests for their own account for
investment and not with a view to distributing or reselling them. Borrower
acknowledges that such a private sale may result in less favorable prices and
other terms than a public sale. Borrower agrees that a private sale, even under
these restrictive conditions, will not be considered commercially unreasonable
solely by virtue of the fact that Lender has not registered or sought to
register the Equity Interests under the Securities Laws, even if Borrower or
Issuer agrees to pay all costs of the registration process.

(b) Right of Lender to Purchase at No-Action Public Sale. Borrower is aware that
Section 9-610 of the UCC states that Lender is able to purchase the Equity
Interests only if they are sold at a public sale. Borrower is also aware that
SEC staff personnel have, over a period of years, issued various No-Action
Letters that describe procedures which, in the view of the SEC staff, permit a
foreclosure sale of securities to occur in a manner that is public for purposes
of Part 6 of Article 9 of the UCC, yet not public for purposes of Section 4(2)
of the Securities Act. Borrower is also aware that Lender may wish to purchase
the Equity Interests that are sold at a foreclosure sale, and Borrower believes
that such purchases would be appropriate in circumstances in which the Equity
Interests are sold in conformity with the principles set forth in the No-Action
Letters. Borrower specifically agrees that a foreclosure sale conducted in
conformity with the principles set forth in the No-Action Letters (i) shall be
considered to be a “public” sale for purposes of Section 9-610 of the UCC;
(ii) will not be considered commercially unreasonable solely by virtue of the
fact that Lender has not registered or sought to register the Equity Interests
under the Securities Laws, even if Borrower agrees or Issuer agrees to pay all
costs of the registration process; and (iii) shall be considered to be
commercially reasonable even if Lender purchases Equity Interests at such a
sale.

(c) Intercreditor Agreement. Borrower acknowledges that Mortgage Lender has
imposed certain restrictions on Lender’s ability to foreclose under this
Agreement, including that Lender shall have obtained a Rating Agency
Confirmation prior to its commencement of any foreclosure under this Agreement
unless the proposed transferee meets certain financial requirements and certain
other conditions are satisfied. Borrower specifically agrees that a foreclosure
sale conducted in conformity with such requirements (i) shall be considered to
be a “public” sale for purposes of Section 9-610 of the UCC; (ii) will not be
considered commercially unreasonable solely by virtue of the fact that such
restrictions are imposed; and (iii) shall be considered to be commercially
reasonable even if Lender purchases Equity Interests at such a sale.

 

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(d) General Standards Applicable to Foreclosure Sales. Borrower agrees that
Lender shall have no general duty or obligation to make any effort to obtain or
pay any particular price for any Equity Interests sold by Lender pursuant to
this Agreement (including sales made to Lender). Lender may, in its discretion,
among other things, accept the first offer received, or decide to approach or
not to approach any potential purchasers. Borrower specifically agrees that a
foreclosure sale conducted in conformity with this Section 14 will be considered
commercially reasonable.

(e) Further Assurances. Borrower shall use all reasonable efforts to do or cause
to be done all such other acts and things (except that Borrower shall not be
obligated to register any Equity Interests under the Securities Laws) as may be
reasonably necessary to make any sale or sales of Equity Interests valid and
binding and in compliance with applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at Borrower’s expense.

(f) Equitable Remedy. Borrower agrees that a breach of any of the covenants
contained in this Section 14 shall cause irreparable injury to Lender, and that
Lender will have no adequate remedy at law in respect of such breach. As a
consequence, Borrower agrees that each and every covenant contained in this
Section 14 shall be specifically enforceable against Borrower.

Section 15. Reimbursement of Lender.

(a) Borrower hereby covenants and agrees to reimburse Lender promptly upon
receipt of written notice from Lender for all reasonable out-of-pocket costs and
expenses payable to third parties incurred by Lender in connection with (A)
enforcing or preserving any rights, in response to third party claims or the
prosecuting or defending of any action or proceeding or other litigation, in
each case against, under or affecting Borrower or this Agreement (except to the
extent found by a final non-appealable judgment of a court of competent
jurisdiction to have resulted from Lender’s gross negligence or willful
misconduct), and (B) enforcing any obligations of or collecting any payments due
from Borrower under this Agreement.

(b) In no event shall Lender be liable to Borrower for any matter or thing in
connection with this Agreement other than to account for moneys actually
received by Lender in accordance with the terms hereof and any state of facts
determined by a final non-appealable judgment of a court of competent
jurisdiction to be caused by Lender’s gross negligence or willful misconduct in
connection therewith.

Section 16. No Waiver of Rights by Lender. Nothing herein shall be deemed (a) to
be a waiver of any right which Lender may have under the Bankruptcy Code or the
bankruptcy laws of any state to file a claim for the then outstanding amount of
the Loan or to require that all of the Pledged Collateral shall continue to
secure all of the Obligations; (b) to impair the validity of the Loan, the Loan
Agreement, the Note, the other Loan Documents or any other document or
instrument delivered to Lender in connection therewith; or (c) to impair the

 

12

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right of Lender to commence an action to foreclose any lien or security interest
in connection with the exercise of its remedies hereunder. Nothing herein shall
be deemed to be a waiver of any right which Lender may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code
to file a claim for the full amount of the indebtedness of the Loan and other
amounts due under this Agreement, the Loan Agreement, the Note, or the other
Loan Documents or to require that all of the Pledged Collateral shall continue
to secure the Obligations.

Section 17. Irrevocable Proxy. Solely with respect to Article 8 Matters,
Borrower hereby irrevocably grants and appoints Lender, from the date of this
Agreement until the termination of this Agreement in accordance with its terms,
as Borrower’s true and lawful proxy, for and in Borrower’s name, place and stead
to vote the Equity Interests, whether directly or indirectly, beneficially or of
record, now owned or hereafter acquired, with respect to such Article 8 Matters.
The proxy granted and appointed in this Section 17 shall include the right to
sign Borrower’s name (as a member, shareholder or partner of Issuer, as
applicable) to any consent, certificate or other document relating to an
Article 8 Matter and the Equity Interests that applicable law may permit or
require, to cause the Equity Interest to be voted in accordance with the
preceding sentence. Borrower hereby represents and warrants that there are no
other proxies and powers of attorney with respect to an Article 8 Matter and the
Equity Interests that Borrower may have granted or appointed. Borrower will not
give a subsequent proxy or power of attorney or enter into any other voting
agreement with respect to the Equity Interests with respect to any Article 8
Matter and any attempt to do so with respect to an Article 8 Matter shall be
void and of no effect. The proxies and powers granted by the Borrower pursuant
to this Agreement are coupled with an interest and are given to secure the
performance of the Borrower’s obligations.

Section 18. Miscellaneous.

(a) Successors. Except as otherwise provided in this Agreement, whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party, provided
that Borrower may not assign its obligations hereunder except as may be provided
in, and in accordance with, the Loan Agreement. All covenants and promises and
agreements in this Agreement contained, by or on behalf of Borrower, shall inure
to the benefit of Lender and its successors and assigns.

(b) Governing Law.

(1) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

(2) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST BORROWER ARISING OUT OF OR
RELATING TO THIS AGREEMENT MAY BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN
NEW YORK, NEW YORK PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW. BORROWER HEREBY (I) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT AND ANY CLAIM THAT ANY SUCH

 

13

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PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
AND (II) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

Corporation Service Company

2711 Centerville Road, Suite 400

Wilmington, DE USA 19808

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO MORTGAGOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON MORTGAGOR, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK.

(c) Modification, Waiver in Writing. This Agreement may not be amended or
waived, nor shall any consent or approval of Lender be granted hereunder, unless
such amendment, waiver, consent or approval is in writing signed by Lender and
(in the case of amendments) Borrower.

(d) Notices. The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated into this Agreement by this reference to the fullest extent as if
the text of such provisions were set forth in their entirety herein.

(e) Trial by Jury. The provisions of Section 9.5 of the Loan Agreement (as it
relates to the waiver of jury trial by Borrower and Lender) are hereby
incorporated into this Agreement by this reference to the fullest extent as if
the text of such provisions were set forth in their entirety herein.

(f) Principles of Construction. The provisions of paragraph (b) of the
“Definitions” section of the Loan Agreement are hereby incorporated into this
Agreement by this reference to the fullest extent as if the text of such
provisions were set forth in their entirety herein.

(g) Severability. The provisions of Section 9.8 of the Loan Agreement are hereby
incorporated into this Agreement by this reference to the fullest extent as if
the text of such provisions were set forth in their entirety herein.

(h) Offsets, Counterclaims and Defenses. All payments made by Borrower hereunder
shall be made irrespective of, and without any deduction for, any setoffs or
counterclaims. Borrower waives the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected with this Agreement
or the Obligations.

 

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(i) No Joint Venture. The provisions of Section 9.12 of the Loan Agreement are
hereby incorporated into this Agreement by this reference to the fullest extent
as if the text of such provisions were set forth in their entirety herein.

(j) Counterparts. The provisions of Section 9.15 of the Loan Agreement are
hereby incorporated into this Agreement by this reference to the fullest extent
as if the text of such provisions were set forth in their entirety herein.

(k) No Third-Party Beneficiaries. This Agreement is solely for the benefit of
Lender and Borrower, and nothing contained in this Agreement shall be deemed to
confer upon anyone other than Lender and Borrower any right to insist upon or to
enforce the performance or observance of any of the obligations contained herein
or therein.

(l) Limitation on Liability of Borrower; Exculpation. The provisions of
Section 9.19 of the Loan Agreement are hereby incorporated into this Agreement
by this reference to the fullest extent as if the text of such provisions were
set forth in their entirety herein.

(m) Right of Set-Off. The provisions of Section 9.20 of the Loan Agreement are
hereby incorporated into this Agreement by this reference to the fullest extent
as if the text of such provisions were set forth in their entirety herein.

(n) Servicer. The provisions of Section 9.22 of the Loan Agreement are hereby
incorporated into this Agreement by this reference to the fullest extent as if
the text of such provisions were set forth in their entirety herein.

(o) Prior Agreements. The provisions of Section 9.27 of the Loan Agreement are
hereby incorporated into this Agreement by this reference to the fullest extent
as if the text of such provisions were set forth in their entirety herein.

(p) Further Assurances. Borrower shall from time to time, at its expense,
promptly execute and deliver (and/or cause to be executed and delivered) all
further instruments and agreements, and take all further actions, that may be
necessary or appropriate, or that Lender may reasonably request, in order to
perfect or protect any assignment, pledge or security interest granted or
purported to be granted hereby or to enable Lender to exercise or enforce its
rights and remedies hereunder.

[Signature appears on the following page]

 

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IN WITNESS WHEREOF, Borrower has executed and delivered this Agreement as of the
date first above written.

 

BORROWER: GIRAFFE JUNIOR HOLDINGS, LLC, a Delaware limited liability company By:
 

/s/ James M. Young

  Name: James M. Young  

Title:   Vice President – Corporate Counsel and

            Assistant Secretary

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Schedule 1

LIST OF EQUITY INTERESTS

 

Issuer

   Class of Interest    Certificate No.      Percentage of Class
Represented by
Equity Interest  

Toys “R” Us Property Company II, LLC

   limited liability

company

     2         100 % 

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Exhibit A

FORM OF INSTRUCTION TO REGISTER PLEDGE

FOR ISSUER

November 3, 2016

 

To: Toys “R” Us Property Company II, LLC

1 Geoffrey Way

Wayne, New Jersey 07470

Attn: General Counsel

In accordance with the requirements of that certain Pledge and Security
Agreement (Mezzanine Loan), dated as the date hereof (as amended, supplemented
or otherwise modified from time to time, the “Pledge Agreement”), between
BRIGADE LEVERAGED CAPITAL STRUCTURES FUND LTD., BRIGADE CREDIT FUND II LTD.,
BRIGADE STRUCTURED CREDIT FUND LTD., LOS ANGELES COUNTY EMPLOYEES RETIREMENT
ASSOCIATION, BRIGADE DISTRESSED VALUE MASTER FUND LTD., THE COCA-COLA COMPANY
MASTER RETIREMENT TRUST, FEDEX CORPORATION EMPLOYEES’ PENSION TRUST, DELTA
MASTER TRUST, BRIGADE OPPORTUNISTIC CREDIT FUND - ICIP, LTD. and BRIGADE
OPPORTUNISTIC CREDIT FUND 16 LLC (together with each of their respective
successors and assigns, collectively, “Lender”) and GIRAFFE JUNIOR HOLDINGS,
LLC, a Delaware limited liability company (the “Borrower”) (defined terms used
herein as therein defined), you are hereby instructed, notwithstanding your and
our understanding that the limited liability company interests, partnership
interests and shares of stock described below are a “security” under the Uniform
Commercial Code, as in effect from time to time in the State of New York (the
“UCC”) as a precaution in the event that such interest was nevertheless held not
to be a security and to better assure the perfection of the security interest of
Lender in such interests, to register the pledge of the following interests in
the name of Lender as follows:

The 100% limited liability company interests of the undersigned in the issuer
(the “Issuer”) as listed on Schedule 1 to the Pledge Agreement including without
limitation all of Borrower’s right, title and interest, whether now owned or
hereafter acquired, in, under and to (collectively, the “Pledged Collateral”):

(i) the Formation Agreement and the Equity Interests, including, without
limitation, Borrower’s share of the profits, losses and capital of Issuer, and
all Voting Rights, claims, powers, privileges, benefits, options or rights of
any nature whatsoever which currently exist or may be issued or granted by
Issuer to Borrower, and all instruments, whether heretofore or hereafter
acquired, evidencing such rights and interests,

(ii) the Account Collateral (as defined in that certain Mezzanine Loan
Agreement, dated the date hereof, by and between Lender and Borrower);

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(iii) all distributions (whether in cash or in kind) and all interest in respect
of, and all proceeds of, any instrument or interest constituting part of the
Pledged Collateral, of whatever kind or description, real or personal, whether
in the ordinary course or in partial or total liquidation or dissolution, or any
recapitalization, reclassification of capital, or reorganization or reduction of
capital, or otherwise,

(iv) all General Intangibles (as defined in Article 9 of the UCC) relating to
the foregoing,

(v) the proceeds (including claims against third parties), products and
accessions of the foregoing,

(vi) all replacements and substitutions of the foregoing,

(vii) all other rights appurtenant to the property described in foregoing
clauses (i) through (vi), and

(viii) any stock certificates, share certificates, limited liability company
certificates, partnership certificates or other certificates or instruments
evidencing the foregoing.

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

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Very truly yours, GIRAFFE JUNIOR HOLDINGS, LLC, a Delaware limited liability
company By:  

 

  Name:   Title:

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LENDER:

BRIGADE LEVERAGED CAPITAL STRUCTURES FUND LTD.,

BRIGADE CREDIT FUND II LTD.,

BRIGADE STRUCTURED CREDIT FUND LTD.,

LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION,

BRIGADE DISTRESSED VALUE MASTER FUND LTD.,

THE COCA-COLA COMPANY MASTER RETIREMENT TRUST,

FEDEX CORPORATION EMPLOYEES’ PENSION TRUST,

DELTA MASTER TRUST,

BRIGADE OPPORTUNISTIC CREDIT FUND - ICIP, LTD., and

BRIGADE OPPORTUNISTIC CREDIT FUND 16 LLC

By: Brigade Capital Management, LP, as Investment Advisor

 

        By:  

 

  Name: Patrick Criscillo   Title: Chief Financial Officer