Document:

EXHIBIT 10.3

 

AMENDED AND RESTATED PLEDGE
AGREEMENT

 

THIS AMENDED AND RESTATED PLEDGE AGREEMENT
(the “Agreement”), dated as of June 10, 2008, is made and given by
WINMARK CORPORATION, a Minnesota corporation (the “Pledgor”), to LASALLE
BANK NATIONAL ASSOCIATION, a national banking association (the “Secured
Party”), for the ratable benefit of the Secured Party and the Lenders (as
defined below).

 

RECITALS

 

A.            The
Pledgor, Wirth Business Credit, Inc. a Minnesota corporation (“WBC”),
Winmark Capital Corporation, a Minnesota corporation (“WCC”), Grow Biz
Games, Inc., a Minnesota corporation (“Grow Biz”, and together with
the Pledgor, WBC and WCC, the “Loan Parties”), and the Secured Party
have entered into a Credit Agreement dated as of September 30, 2004
(as amended, the “Existing Credit Agreement”).

 

B.            The
Pledgor is the owner of the equity interests described in Schedule I hereto
(the “Pledged Shares”) issued by the business organizations named
thereon.

 

C.            As
a condition precedent to the obligation of the Secured Party to extend credit
accommodations pursuant to the terms of the Existing Credit Agreement, the
Pledgor executed and delivered to the Secured Party a Pledge Agreement dated as
of September 30, 2004 (as amended, the “Existing Pledge Agreement”).

 

D.            The
Loan Parties and the Secured Party have agreed to amend and restate the
Existing Credit Agreement pursuant to the terms and conditions set forth in
that certain Amended and Restated Revolving Credit Agreement of even date
herewith (the “Amended and Restated Credit Agreement”) by and among the
Loan Parties, each lender from time to time party thereto (each a “Lender”
and collectively, the “Lenders”), and the Secured Party, as a Lender and
as agent for the Lenders.

 

E.             It
is a condition precedent to the obligations of the Secured Party and the
Lenders to extend credit and certain other accommodations pursuant to the terms
of the Amended and Restated Credit Agreement that this Agreement be executed
and delivered by the Pledgor.

 

F.             The
Pledgor finds it advantageous, desirable and in the best interests of the
Pledgor to comply with the requirement that this Agreement be executed and
delivered to the Secured Party.

 

NOW, THEREFORE, in consideration of the
premises and in order to induce the Secured Party and the Lenders to enter into
the Amended and Restated Credit Agreement and to extend credit and certain
other accommodations to the Pledgor thereunder, the Pledgor hereby agrees with
the Secured Party, for the ratable benefit of the Secured Party and the Lenders,
as follows:

 

 

Section 1.       Defined Terms.

 

1(a)    As used in this Agreement, the following
terms shall have the meanings indicated:

 

“Collateral”:  As defined in Section 2.

 

“Event of Default”:  As defined in Section 11.

 

“Lien”:  Any security interest, mortgage, pledge,
lien, charge, encumbrance, title retention agreement or analogous instrument or
device (including the interest of the lessors under capitalized leases), in, of
or on any assets or properties of the Person referred to.

 

“Obligations”:  (a) All indebtedness, liabilities and
obligations of the Loan Parties to the Secured Party and the Lenders of every
kind, nature or description under the Amended and Restated Credit Agreement,
including the Loan Parties’ obligation on any promissory note or notes issued
under the Amended and Restated Credit Agreement and any note or notes hereafter
issued in substitution or replacement thereof, and (b) all liabilities of
the Pledgor under this Agreement, in all of the foregoing cases whether due or
to become due, and whether now existing or hereafter arising or incurred.

 

“Person”:  Any individual, corporation, partnership,
limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.

 

“Pledged Shares”:  As defined in Recital B above.

 

“Security Interest”:  As defined in Section 2.

 

1(b)         Terms Defined in Uniform Commercial Code.  All other terms used in this Agreement that
are not specifically defined herein or the definitions of which are not
incorporated herein by reference shall have the meaning assigned to such terms
in Article 9 of the Uniform Commercial Code as adopted in the State of
Minnesota as it may be amended, revised, supplemented or modified from time to
time, to the extent such other terms are defined therein.

 

1(c)         Singular/Plural, Etc. 
Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, and “or” has the inclusive
meaning represented by the phrase “and/or.” 
The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.”  
The words “hereof,” “herein,” “hereunder,” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement.  References
to Sections are references to Sections in this Amended and Restated Pledge Agreement
unless otherwise provided.

 

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Section 2.          Pledge.  As security for the payment and performance
of all of the Obligations, the Pledgor hereby pledges and grants to the Secured
Party, for the ratable benefit of the Secured Party and the Lenders, a security
interest (the “Security Interest”) in the following, including any
securities account containing a securities entitlement with respect to the
following (the “Collateral”):

 

2(a)      The
Pledged Shares and the certificates representing the Pledged Shares, and all
dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares.

 

2(b)      All
additional equity interests of any issuer of the Pledged Shares from time to
time acquired by the Pledgor in any manner, and the certificates representing
such additional shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such shares.

 

2(c)      All
proceeds of any and all of the foregoing 
(including proceeds that constitute property of types described above).

 

Section 3.          Delivery of Collateral.  All certificates and instruments representing
or evidencing the Pledged Shares which have not been previously delivered to
the Secured Party shall be delivered to the Secured Party contemporaneously
with the execution of this Agreement. 
All certificates and instruments representing or evidencing Collateral
received by the Pledgor after the execution of this Agreement shall be
delivered to the Secured Party promptly upon the Pledgor’s receipt
thereof.  All such certificates and
instruments shall be held by or on behalf of the Secured Party pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form
and substance satisfactory to the Secured Party.  With respect to all Pledged Shares consisting
of uncertificated securities, book-entry securities or securities entitlements,
the Pledgor shall either (a) execute and deliver, and cause any necessary
issuers or securities intermediaries to execute and deliver, control agreements
in form and substance satisfactory to the Secured Party covering such Pledged
Shares, or (b) cause such Pledged Shares to be transferred to the name of
the Secured Party.  The Secured Party
shall have the right at any time, whether before or after an Event of Default,
to cause any or all of the Collateral to be transferred of record into the name
of the Secured Party or its nominee for the ratable benefit of the Secured
Party and the Lenders (but subject to the rights of the Pledgor under Section 6)
and to exchange certificates representing or evidencing Collateral for
certificates of smaller or larger denominations.  If the Collateral is in the possession of a
bailee, the Pledgor will join with the Secured Party in notifying the bailee of
the interest of the Secured Party and in obtaining from the bailee an
acknowledgement that it hold the Collateral for the benefit of the Secured
Party.

 

Section 4.          Certain Warranties and Covenants.  The Pledgor makes the following warranties
and covenants:

 

4(a)      The
Pledgor has title to the Pledged Shares and will have title to each other item
of Collateral hereafter acquired, free of all Liens except the Security
Interest and Liens permitted by the Amended and Restated Credit Agreement.

 

4(b)      The
Pledgor has full corporate power and authority to execute this Pledge
Agreement, to perform the Pledgor’s obligations hereunder and to subject the
Collateral to the Security Interest created hereby

 

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4(c)      No
financing statement covering all or any part of the Collateral is on file in
any public office (except for any financing statements filed by the Secured
Party).

 

4(d)      The
Pledged Shares have been duly authorized and validly issued by the issuer
thereof and are fully paid and non-assessable. 
The certificates representing the Pledged Shares are genuine.  The Pledged Shares are not subject to any
offset or similar right or claim of the issuers thereof.

 

4(e)      The
Pledged Shares constitute the percentage of the issued and outstanding shares
of stock of the respective issuers thereof indicated on Schedule I (if any such
percentage is so indicated).

 

4(f)       The
Pledgor’s federal tax identification number and organizational identification
number are set forth on the signature page of this Agreement.

 

Section 5.          Further Assurances. The Pledgor
agrees that at any time and from time to time, at the expense of the Pledgor,
the Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or that the
Secured Party may reasonably request, in order to perfect and protect the
Security Interest or to enable the Secured Party to exercise and enforce its
rights and remedies hereunder with respect to any Collateral (but any failure
to request or assure that the Pledgor execute and deliver such instruments or
documents or to take such action shall not affect or impair the validity,
sufficiency or enforceability of this Agreement and the Security Interest,
regardless of whether any such item was or was not executed and delivered or
action taken in a similar context or on a prior occasion).

 

Section 6.          Voting Rights; Dividends; Etc.

 

6(a)      Subject
to paragraph (d) of this Section 6, the Pledgor shall be entitled to
exercise or refrain from exercising any and all voting and other consensual
rights pertaining to the Pledged Shares or any other stock that becomes part of
the Collateral or any part thereof for any purpose not inconsistent with the
terms of this Agreement or the Credit Agreement; provided, however, that the
Pledgor shall not exercise or refrain from exercising any such right if such
action could reasonably be expected to have a material adverse effect on the
value of the Collateral or any material part thereof as such (which shall not
be deemed, for purposes of this Section 6, to include actions which effect
or may effect the underlying value of the respective issuer thereof,  such as actions to approve a merger,
statutory exchange or asset disposition not prohibited by the Credit Agreement
and actions to elect directors).

 

6(b)      Subject
to paragraph (e) of this Section 6, the Pledgor shall be entitled to
receive, retain, and use in any manner not prohibited by the Credit Agreement
any and all dividends paid in respect of the Collateral.

 

6(c)      The
Secured Party shall execute and deliver (or cause to be executed and delivered)
to the Pledgor all such proxies and other instruments as the Pledgor may
reasonably request for the purpose of enabling the Pledgor to exercise the voting
and other rights that  it is entitled to
exercise pursuant to Section 6(a) hereof and to receive the dividends
that it is authorized to receive and retain pursuant to Section 6(b) hereof.

 

6(d)      Upon
the occurrence and during the continuance of any Event of Default, the Secured
Party shall have the right in its sole discretion, and the Pledgor shall
execute and 

 

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deliver all such proxies and other instruments as may be necessary or
appropriate to give effect to such right, to terminate all rights of the
Pledgor to exercise or refrain from exercising the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to Section 6(a) hereof,
and all such rights shall thereupon become vested in the Secured Party who
shall thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights; provided, however, that the Secured Party
shall not be deemed to possess or have control over any voting rights with
respect to any Collateral (and the Pledgor shall have no obligation to execute
or deliver any proxies or other instruments) unless and until the Secured Party
has given written notice to the Pledgor that any further exercise of such
voting rights by the Pledgor is prohibited and that the Secured Party and/or
its assigns will henceforth exercise such voting rights; and provided, further,
that neither the registration of any item of Collateral in the Secured Party’s
name nor the exercise of any voting rights with respect thereto shall be deemed
to constitute a retention by the Secured Party of any such Collateral in
satisfaction of the Obligations or any part thereof.

 

6(e)      Upon
the occurrence and during the continuance of any Event of Default, without
notice from the Secured Party:

 

(i)            all rights of the Pledgor to receive the dividends that
it would otherwise be authorized to receive and retain pursuant to Section 6
(b) hereof shall cease, and all such rights shall thereupon become vested
in the Secured Party, for the ratable benefit of the Secured Party and the
Lenders, who shall thereupon have the sole right to receive and hold such
dividends as Collateral, and

 

(ii)           all payments of dividends that are received by the Pledgor
contrary to the provisions of paragraph (i) of this Section 6 (e) shall
be received in trust for the benefit of the Secured Party, shall be segregated
from other funds of the Pledgor and shall be forthwith paid over to the Secured
Party as Collateral in the same form as so received (with any necessary
indorsement).

 

Section 7.          Transfers and Other Liens;
Additional Shares.

 

7(a)      Except
as may be permitted by the Credit Agreement, the Pledgor agrees that it will
not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, or (ii) create
or permit to exist any Lien, upon or with respect to any of the
Collateral.  Upon any sale, assignment or
other disposition of any of the Collateral permitted by the Amended and
Restated Credit Agreement, such Collateral shall be considered, automatically
and without any further action on the part of the Pledgor or the Secured Party,
to be released from the Security Interest, the Secured Party shall return to
the Pledgor such Collateral if then in its possession (together with all
related instruments of transfer and assignments in blank), and the Secured
Party shall, upon the request and at the expense of the Pledgor, thereafter
promptly execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request evidencing such release, including complete or partial (as
appropriate) releases of relevant financing statements.

 

7(b)      The
Pledgor agrees that it will (i) cause each issuer of the Pledged Shares that
it controls not to issue any stock or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to the
Pledgor, and (ii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all additional shares of stock or
other securities of each issuer of the Pledged Shares.

 

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Section 8.          Secured Party Appointed
Attorney-in-Fact.  The Pledgor hereby
appoints the Secured Party the Pledgor’s attorney-in-fact, with full authority
in the place and stead of such Pledgor and in the name of such Pledgor or
otherwise, from time to time in the Secured Party’s good-faith discretion, to
take any action and to execute any instrument that the Secured Party may
reasonably believe necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of the Pledgor under Section 6 hereof),
in a manner consistent with the terms hereof, including, without limitation
(subject to the rights of the Pledgor under Section 6 hereof), to receive,
indorse and collect all instruments made payable to the Pledgor representing
any dividend or other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same.

 

Section 9.          Secured Party May Perform.  The Pledgor hereby authorizes the Secured
Party to file financing statements with respect to the Collateral (including
financing statements containing a broader description of the Collateral than
the description set forth herein).  If
the Pledgor fails to perform any agreement contained herein, the Secured Party
may itself perform, or cause performance of, such agreement, and the reasonable
out-of-pocket expenses of the Secured Party incurred in connection therewith
shall be payable by the Pledgor under Section 14 hereof.

 

Section 10.        The Secured Party’s Duties.  The powers conferred on the Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  The Secured Party shall be deemed to have
exercised reasonable care in the safekeeping of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to the
safekeeping which the Secured Party accords its own property of like kind.  Except for the safekeeping of any Collateral
in its possession, the accounting for monies and for other properties actually
received by it hereunder, and as otherwise expressly set forth herein, the
Secured Party shall have no duty, as to any Collateral, as to ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the Secured
Party has or is deemed to have knowledge of such matters, or as to the taking
of any necessary steps to preserve rights against any Persons or any other
rights pertaining to any Collateral.  The
Secured Party will take action in the nature of exchanges, conversions, redemption,
tenders and the like requested in writing by the Pledgor with respect to any of
the Collateral in the Secured Party’s possession if the Secured Party in its
reasonable judgment determines that such action will not impair the Security
Interest or the value of the Collateral, but a failure of the Secured Party to
comply with any such request shall not of itself be deemed a failure to
exercise reasonable care.

 

Section 11.        Default.  Each of the following occurrences shall
constitute an Event of Default under this Agreement:  (a) the Pledgor shall fail to comply
with any agreement, covenant or term contained in Section 5 or 14 of this
Agreement and such failure to comply shall continue for thirty (30) calendar
days after whichever of the following dates is the earliest:  (i) the date the Pledgor gives notice of
such failure to the Secured Party, (ii) the date the Pledgor should have
given notice of such failure to the Secured Party pursuant to Section 10.1.6
of the Amended and Restated Credit Agreement, and (iii) the date the
Secured Party gives notice of such failure to the Pledgor; or (b) the
Pledgor shall fail to observe or perform any covenant or agreement applicable
to the Pledgor under this Agreement not specified in clause (a), above; or (c) any
representation or warranty made by the Pledgor in this Agreement or in any
financial statements, reports or certificates herewith or at any time hereafter
submitted by or on behalf of the Pledgor to the Secured Party pursuant to this
Agreement shall prove to have been false or misleading in any material respect
when made; or (d) any Event of Default shall occur under the Amended and
Restated Credit Agreement.

 

Section 12.        Remedies upon Default.  If any Event of Default shall have occurred
and be continuing:

 

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12(a)    The
Secured Party may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies of a secured party on default under Revised Article 9
of the Uniform Commercial Code as adopted in the State of Minnesota (the “Code”)
in effect at that time (whether or not the Code then applies to the affected
Collateral), and may, without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker’s board or at any of the Secured Party’s offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as are commercially reasonable. 
The Pledgor agrees that, to the extent notice of sale shall be required
by law, at least ten days’ prior notice to the Pledgor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification.  The
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given.  The
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned, to
the extent commercially reasonable.  The
Pledgor hereby waives all requirements of law, if any, relating to the marshalling
of assets which would be applicable in connection with the enforcement by the
Secured Party of its remedies hereunder, absent this waiver.

 

12(b)    The
Secured Party may notify any Person obligated on any of the Collateral that the
same has been assigned or transferred to the Secured Party and that the same
should be performed as requested by, or paid directly to, the Secured Party, as
the case may be.  The Pledgor shall join
in giving such notice, if the Secured Party so requests.  The Secured Party may, in the Secured Party’s
name or in the Pledgor’s name, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of, or securing, any such
Collateral or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligation of any such
Person.

 

12(c)    Any
cash held by the Secured Party as Collateral and all cash proceeds received by
the Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
the Secured Party, be held by the Secured Party as collateral for, or then or
at any time thereafter be applied in whole or in part by the Secured Party
against, all or any part of the Obligations (including any expenses of the
Secured Party payable pursuant to Section 13 hereof).

 

Section 13.        Waiver of Certain Claims.  The Pledgor acknowledges that because of
present or future circumstances, a question may arise under the Securities Act
of 1933, as from time to time amended (the “Securities Act”), with
respect to any disposition of the Collateral permitted hereunder.  The Pledgor understands that compliance with
the Securities Act may very strictly limit the course of conduct of the Secured
Party if the Secured Party were to attempt to dispose of all or any portion of
the Collateral and may also limit the extent to which or the manner in which
any subsequent transferee of the Collateral or any portion thereof may dispose
of the same.  There may be other legal
restrictions or limitations affecting the Secured Party in any attempt to
dispose of all or any portion of the Collateral under the applicable Blue Sky
or other securities laws or similar laws analogous in purpose or effect.  The Secured Party 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 only and not to engage in a distribution or resale
thereof in violation of the Securities Act. 
The Pledgor agrees that the Secured Party shall not incur any liability,
and any liability of the Pledgor for any deficiency shall not be impaired, as a
result of the sale of the Collateral or any portion thereof at any such private
sale in a manner that is commercially reasonable (within the meaning of Section 9-610
of the Uniform Commercial Code).  

 

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The Pledgor hereby waives
any claims against the Secured Party arising by reason of the fact that the
price at which the Collateral may have been sold at such sale was less than the
price that might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Secured Party shall accept the
first offer received and does not offer any portion of the Collateral to more
than one possible purchaser.  The Pledgor
further agrees that the Secured Party has no obligation to delay sale of any
Collateral for the period of time necessary to permit the issuer of such
Collateral to qualify or register such Collateral for public sale under the
Securities Act, applicable Blue Sky laws and other applicable state and federal
securities laws, even if said issuer would agree to do so.  Without limiting the generality of the
foregoing, the provisions of this Section would apply if, for example, the
Secured Party were to place all or any portion of the Collateral for private
placement by an investment banking firm, or if such investment banking firm
purchased all or any portion of the Collateral for its own account, or if the
Secured Party placed all or any portion of the Collateral privately with a
purchaser or purchasers.

 

Section 14.        Costs and Expenses; Indemnity.  The Pledgor will pay or reimburse the Secured
Party on demand for all reasonable out-of-pocket expenses (including in each
case all filing and recording fees and taxes and all reasonable fees and
expenses of counsel and of any experts and agents) incurred by the Secured
Party or any Lender in connection with the creation, perfection, protection,
satisfaction, foreclosure or enforcement of the Security Interest and the
preparation, administration, continuance, amendment or enforcement of this
Agreement, and all such costs and expenses shall be part of the Obligations
secured by the Security Interest.  The
Pledgor shall indemnify and hold the Secured Party and each Lender harmless
from and against any and all claims, losses and liabilities (including
reasonable attorneys’ fees) growing out of or resulting from this Agreement
(including enforcement of this Agreement) or the Secured Party’s or any Lender’s
actions pursuant hereto, except claims, losses or liabilities resulting from
the Secured Party’s or such Lender’s gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction.  Any liability of the Pledgor to indemnify and
hold the Secured Party or each Lender harmless pursuant to the preceding
sentence shall be part of the Obligations secured by the Security Interest.  The obligations of the Pledgor under this Section shall
survive any termination of this Agreement.

 

Section 15.        Waivers and Amendments; Remedies.  This Agreement can be waived, modified,
amended, terminated or discharged, and the Security Interest can be released,
only explicitly in a writing signed by the Secured Party (and, in the case of a
modification or amendment, by the Pledgor). 
A waiver so signed shall be effective only in the specific instance and
for the specific purpose given.  Mere
delay or failure to act shall not preclude the exercise or enforcement of any
rights and remedies available to the Secured Party.  All rights and remedies of the Secured Party
shall be cumulative and may be exercised singly in any order or sequence, or
concurrently, at the Secured Party’s option, and the exercise or enforcement of
any such right or remedy shall neither be a condition to nor bar the exercise
or enforcement of any other.

 

Section 16.        Notices.  Any notice or other communication to any
party in connection with this Agreement shall be in writing and shall be sent
by manual delivery, facsimile transmission, overnight courier or United States
mail (postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. 
All periods of notice shall be measured from the date of delivery
thereof if manually delivered, from the date of sending thereof if sent by
facsimile transmission, from the first business day after the date of sending
if sent by overnight courier, or from four days after the date of mailing if
mailed.

 

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Section 17.        Pledgor Acknowledgements.  The Pledgor hereby acknowledges that (a) the
Pledgor has been advised by counsel in the negotiation, execution and delivery
of this Agreement, (b) the Secured Party has no fiduciary relationship to
the Pledgor, the relationship being solely that of debtor and creditor, and (c) no
joint venture exists between the Pledgor or the Secured Party.

 

Section 18.        Continuing Security Interest;
Assignments under Credit Agreement. 
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment
in full of the Obligations and the expiration of the obligation, if any, of the
Secured Party and the Lenders to extend credit and certain other accommodations
to the Loan Parties under the Amended and Restated Credit Agreement, (b) be
binding upon the Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of the Secured Party hereunder, to the
benefit of, and be enforceable by, the Secured Party, the Lenders and their
successors, transferees and assigns. 
Without limiting the generality of the foregoing clause (c), the Secured
Party may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement to any other Person to the extent and in
the manner provided in the Credit Agreement, and may similarly transfer all or
any portion of its rights under this Pledge Agreement to such Persons.

 

Section 19.        Termination of Security Interest.  Upon payment in full of the Obligations and
the expiration of any obligation of the Secured Party and the Lenders to extend
credit and certain other accommodations to the Loan Parties under the Amended
and Restated Credit Agreement, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Pledgor.  Upon any such termination, the Secured Party
will return to the Pledgor such of the Collateral as shall not have been sold
or otherwise applied pursuant to the terms hereof (together with all related instruments
of transfer and assignments in blank) and execute and deliver to the Pledgor
such documents as the Pledgor shall reasonably request to evidence such
termination.  Any reversion or return of
the Collateral upon termination of this Agreement and any instruments of
transfer or termination shall be at the expense of the Pledgor and shall be
without warranty by, or recourse on, the Secured Party or any Lender.  As used in this Section, “Pledgor” includes
any assigns of Pledgor, any Person holding a subordinate security interest in
any part of the Collateral or whoever else may be lawfully entitled to any part
of the Collateral.

 

Section 20.        Governing
Law and Construction.  THE
VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF MINNESOTA, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS; PROVIDED, HOWEVER, THAT NO EFFECT
SHALL BE GIVEN TO CONFLICT OF LAWS PRINCIPLES OF THE STATE OF MINNESOTA, EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
MANDATORILY GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
MINNESOTA.  Whenever possible, each
provision of this Agreement and any other statement, instrument or transaction
contemplated hereby or relating hereto shall be interpreted in such manner as
to be effective and valid under such applicable law, but, if any provision of
this Agreement or any other statement, instrument or transaction contemplated
hereby or relating hereto shall be held to be prohibited or invalid under such
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement or any other statement,
instrument or transaction contemplated hereby or relating hereto.

 

9

 

Section 21.        Consent
to Jurisdiction.  AT THE
OPTION OF THE SECURED PARTY, THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL
COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY, MINNESOTA; AND THE
PLEDGOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY
ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.  IN THE EVENT THE PLEDGOR COMMENCES ANY ACTION
IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING
DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE
SECURED PARTY AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO
ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT
BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

 

Section 22.        Waiver
of Jury Trial.  EACH OF THE
PLEDGOR AND THE SECURED PARTY, BY ITS ACCEPTANCE OF THIS AGREEMENT, IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 23.        Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one and
the same instrument.

Section 24.        General.  All representations and warranties contained
in this Agreement or in any other agreement between the Pledgor, the Secured
Party and the Lenders shall survive the execution, delivery and performance of
this Agreement and the creation and payment of the Obligations.  The Pledgor waives notice of the acceptance
of this Agreement by the Secured Party. 
Captions in this Agreement are for reference and convenience only and
shall not affect the interpretation or meaning of any provision of this
Agreement.

 

Section 25.        Existing Pledge Agreement.  This Agreement amends and restates in its
entirety the Existing Pledge Agreement, provided that the obligations of the
Pledgor under the Existing Pledge Agreement shall continue under this Agreement
unabated, and shall not in any event be terminated, extinguished or annulled,
but shall hereafter be governed by this Agreement.

 

[The next page is the signature page.]

 

10

 

IN WITNESS WHEREOF, the Pledgor has caused
this Amended and Restated Pledge Agreement to be duly executed and delivered by
its officer thereunto duly authorized as of the date first above written.

 

	
   

  	
  PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  WINMARK CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
              /s/
  Brett D. Heffes

  
	
   

  	
  Name:

  	
  Brett D. Heffes

  
	
   

  	
  Title:

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  Federal tax identification number: 41-1622691

  
	
   

  	
  Organizational identification number: MN5Z-841

  
	
   

  	
   

  
	
   

  	
  Address for Pledgor:

  
	
   

  	
   

  
	
   

  	
  Winmark
  Corporation

  
	
   

  	
  4200
  Dahlberg Drive

  
	
   

  	
  Suite 100

  
	
   

  	
  Minneapolis,
  MN 55422-4837

  
	
   

  	
  Attention:
  Vice President and General Counsel

  
	
   

  	
  Telephone:
  (763) 520-8500

  
	
   

  	
  Fax: (763) 520-8410

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for the Secured Party:

  
	
   

  	
   

  
	
   

  	
  LaSalle
  Bank National Association

  
	
   

  	
  135
  South LaSalle Street, Suite 1152

  
	
   

  	
  Chicago,
  IL 60603

  
	
   

  	
  Attention:
  Quinn Richardson

  
	
   

  	
  Telephone:
  (312) 992-2160

  
	
   

  	
  Facsimile:
  (312) 904-6546

  

 

S-1

 

Schedule I

Pledged Stock

 

Pledgor owns 100% of the outstanding capital stock of each of the
following:

 

	
  Issuer

  	
   

  	
  Class of Stock

  	
   

  	
  Certificate

  Number

  	
   

  	
  Par Value

  	
   

  	
  Number of

  Outstanding

  Shares

  	
   

  
	
  Wirth
  Business Credit, Inc.

  	
   

  	
  Common

  	
   

  	
  02

  	
   

  	
  $

  	
  .01

  	
   

  	
  100

  	
   

  
	
  Winmark
  Capital Corporation

  	
   

  	
  Common

  	
   

  	
  01

  	
   

  	
  $

  	
  .01

  	
   

  	
  100

  	
   

  
	
  Grow Biz
  Games, Inc.

  	
   

  	
  Common

  	
   

  	
  2

  	
   

  	
  $

  	
  .01

  	
   

  	
  1,000EXHIBIT 10.4

 

THIRD AMENDED AND RESTATED NOTE

 

June 10, 2008

	
  $30,000,000

  	
   

  	
  Minneapolis, Minnesota

  

 

The
undersigned, jointly and severally, for value received, promise to pay to the
order of LaSalle Bank National Association (the “Lender”) at the
Administrative Agent’s Office (as defined in the Credit Agreement) the
aggregate unpaid amount of all Loans made to the undersigned by the Lender
pursuant to the Credit Agreement referred to below (as shown on the schedule
attached hereto (and any continuation thereof) or in the records of the
Lender), such principal amount to be payable on the dates set forth in the
Credit Agreement.

 

The
undersigned, jointly and severally, further promise to pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such Loan
is paid in full, payable at the rate(s) and at the time(s) set forth
in the Credit Agreement.  Payments of
both principal and interest are to be made in lawful money of the United States
of America.

 

This
Third Amended and Restated Note amends and restates that certain Second Amended
and Restated Note dated August 15, 2007, in the original principal amount
of $25,000,000 issued by the undersigned to the order of the Lender (the “Prior
Note”).  It is expressly intended,
understood and agreed that this Third Amended and Restated Note shall replace
the Prior Note as evidence of such indebtedness of the undersigned to the
Lender, and such indebtedness of the undersigned to the Lender heretofore
represented by the Prior Note, as of the date hereof, shall be considered
outstanding hereunder from and after the date hereof and shall not be
considered paid (nor shall the undersigned’s obligation to pay the same be
considered discharged or satisfied) as a result of the issuance of this Third Amended
and Restated Note.

 

This
Third Amended and Restated Note evidences indebtedness incurred under, and is
subject to the terms and provisions of, the Amended and Restated Revolving
Credit Agreement, dated as of June 10, 2008, which amended and restated
that certain 364-Day Revolving Credit Agreement, dated as of September 30, 2004, as
amended by that certain First Amendment to 364-Day Revolving Credit Agreement
dated as of August 25, 2005, that certain Second Amendment to 364-Day
Revolving Credit Agreement dated as of March 31, 2006, that certain
Third Amendment to 364-Day Revolving Credit Agreement dated as of May 19, 2006,
that certain Fourth Amendment to 364-Day Revolving Credit Agreement dated as of
August 15, 2007, and that certain Fifth Amendment to 364-Day
Revolving Credit Agreement dated as of November 12, 2007 (as further
amended, supplemented or modified, the “Credit Agreement”; terms not
otherwise defined herein are used herein as defined in the Credit Agreement),
among the undersigned, certain lenders party thereto and the Lender, to which
Credit Agreement reference is hereby made for a statement of the terms and
provisions under which this Third Amended and Restated Note may or must be paid
prior to its due date or its due date accelerated.

 

This
Third Amended and Restated Note is made under and governed by the laws of the
State of Minnesota applicable to contracts made and to be performed entirely
within such State.

 

	
  WINMARK
  CORPORATION

  	
   

  	
  GROW
  BIZ GAMES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
       /s/
  Brett D. Heffes

  	
   

  	
  By:

  	
       /s/
  Brett D. Heffes

  
	
  Name: Brett Heffes

  	
   

  	
  Name:  Brett Heffes

  
	
  Title: Chief Financial
  Officer and Treasurer

  	
   

  	
  Title:   Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  
	
  WIRTH
  BUSINESS CREDIT, INC.

  	
   

  	
  WINMARK
  CAPITAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
       /s/
  Brett D. Heffes

  	
   

  	
  By:

  	
       /s/
  Brett D. Heffes

  
	
  Name: Brett Heffes

  	
   

  	
  Name:  Brett Heffes

  
	
  Title: Chief Financial
  Officer and Treasurer

  	
   

  	
  Title:   Chief Financial Officer and Treasurer

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