SECOND AMENDED AND RESTATED SECURITY AGREEMENT
This SECOND AMENDED AND RESTATED SECURITY AGREEMENT, dated as of December
23, 1998 (this "Agreement"), is by and among XXXXXXXXX XXXXX, INC., a California
corporation (the "Borrower"), XXXXXXXXX XXXXX HOLDING, INC., a Delaware
corporation (the "Guarantor"), XXXXXXXXX XXXXX MERCHANDISING, INC., a California
corporation ("Xxxxxxxxx Xxxxx Merchandising" and together with the Borrower and
the Guarantor, the "Companies") and BANKBOSTON, N.A., a national banking
association, as agent (the "Agent") for itself and such other lending
institutions (collectively, the "Banks") which are or may become parties to that
certain Second Amended and Restated Revolving Credit Agreement dated as of
December 23, 1998 (as amended and in effect from time to time, the "Credit
Agreement") among the Borrower, the Guarantor, the Banks and the Agent.
WHEREAS, pursuant to that certain Amended and Restated Revolving Credit and
Term Loan Agreement dated as of December 5, 1997 (as amended and in effect from
time to time, the "First Restated Credit Agreement", which amended and restated
in its entirety the Revolving Credit and Term Loan Agreement dated as of
September 27, 1996), the Banks made loans or otherwise extended credit to the
Borrower for the purposes described therein;
WHEREAS, pursuant to that certain Amended and Restated Security Agreement
dated as of December 5, 1997 (as amended and in effect from time to time, the
"First Restated Security Agreement", which amended and restated in its entirety
a Security Agreement dated as of September 27, 1996), the Borrower and the
Guarantor granted certain security interests to the Banks to secure payment and
performance of their obligations under and with respect to the First Restated
Credit Agreement and the related loan documents;
WHEREAS, the Borrower, the Guarantor, the Banks and the Agent have entered
into the Credit Agreement to amend and restate in its entirety the First
Restated Credit Agreement;
WHEREAS, the Guarantor has entered into the Parent Guaranty and Xxxxxxxxx
Xxxxx Merchandising has entered into the Subsidiary Guaranty (collectively, the
"Guaranties"), each dated as of the date hereof, each in favor of the Banks and
the Agent, and pursuant to which the Guarantor and Xxxxxxxxx Xxxxx Merchandising
have guaranteed the payment and performance of the Obligations (as defined in
the Credit Agreement) of the Borrower to the Banks and the Agent;
WHEREAS, it is a condition precedent to the Banks making any loans or
otherwise extending credit to the Borrower under the Credit Agreement that the
Companies execute and deliver to the Agent, for the benefit of the
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Banks and the Agent, a security agreement in substantially the form hereof; and
WHEREAS, each of the Companies wishes to grant security interests in the
Collateral (as hereinafter defined) in favor of the Agent in order to secure the
Obligations, and the Borrower and the Guarantor wish to ratify and confirm the
prior grant of a security interest in the Collateral under the First Restated
Security Agreement;
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower and the Guarantor hereto agree that the First
Restated Security Agreement is hereby amended and restated in its entirety, and
the parties agree as follows:
1. DEFINITIONS. All capitalized terms used herein without definitions
shall have the respective meanings provided therefor in the Credit Agreement.
All terms defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts and used herein shall have the same definitions
herein as specified therein.
2. GRANT OF SECURITY INTEREST.
2.1. COLLATERAL GRANTED. Each of the Companies hereby grants to the
Agent, for the benefit of the Banks, to secure the payment and performance
in full of all of the Obligations, a security interest in and so pledges
and assigns to the Agent, for the benefit of the Banks, the following
properties, assets and rights of such Company, wherever located, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof (all of the same being hereinafter called the "Collateral"):
All personal and fixture property of every kind and nature
including without limitation all furniture, fixtures, equipment, raw
materials, inventory, goods, accounts, contract rights, rights to the
payment of money, insurance refund claims and all other insurance
claims and proceeds, tort claims, chattel paper, documents,
instruments, securities and other investment property, deposit
accounts and all general intangibles including, without limitation,
all tax refund claims, license fees, patents, patent applications,
trademarks, trademark applications, trade names, copyrights, copyright
applications, rights to xxx and recover for past infringement of
patents, trademarks and copyrights, computer programs, computer
software, engineering drawings, service marks, customer lists,
goodwill, and all licenses, permits, agreements of any kind or nature
pursuant to which such Company possesses, uses or has authority to
possess or use property (whether tangible or intangible) of others or
others possess, use
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or have authority to possess or use property (whether tangible or
intangible) of such Company, and all recorded data of any kind or
nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and
schematics.
2.2. DELIVERY OF INSTRUMENTS, ETC. Pursuant to the terms hereof,
each of the Companies has endorsed, assigned and delivered to the Agent all
negotiable or non-negotiable instruments (including certificated
securities) and chattel paper pledged by it hereunder, together with
instruments of transfer or assignment duly executed in blank as the Agent
may have specified. In the event that any of the Companies shall, after
the date of this Agreement, acquire any other negotiable or non-negotiable
instruments (including certificated securities) or chattel paper to be
pledged by it hereunder, such Company shall forthwith endorse, assign and
deliver the same to the Agent, accompanied by such instrument's of transfer
or assignment duly executed in blank as the Agent may from time to time
specify. To the extent that any securities are uncertificated, appropriate
book-entry transfers reflecting the pledge of such securities created
hereby have been or, in the case of uncertificated securities hereafter
acquired by any of the Companies, will at the time of such acquisition be,
duly made for the account of the Agent or one or more nominees of the Agent
with the issuer of such securities or other appropriate book-entry facility
or financial intermediary, with the Bank having at all times the right to
obtain definitive certificates (in the Agent's name or in the name of one
or more nominees of the Agent) where the issuer customarily or otherwise
issues certificates, all to be held as Collateral hereunder. Each of the
Companies hereby acknowledges that the Agent may, in its discretion,
appoint one or more financial institutions to act as the Agent's agent in
holding in custodial account instruments or other financial assets in which
the Agent is granted a security interest hereunder, including, without
limitation, certificates of deposit and other instruments evidencing short
term obligations.
2.3. EXCLUDED COLLATERAL. Notwithstanding the foregoing provisions
of this Section 2, such grant of security interest shall not extend to, and
the term "Collateral" shall not include, any chattel paper and general
intangibles which are now or hereafter held by any of the Companies as
licensee, lessee or otherwise, to the extent that (i) such chattel paper
and general intangibles are not assignable or capable of being encumbered
as a matter of law or under the terms of the license, lease or other
agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent
of the licensor or lessor thereof or other applicable party thereto and
(ii) such consent has not been obtained; PROVIDED, HOWEVER, that the
foregoing grant of security interest shall extend to, and the term
"Collateral" shall include, (A) any and all
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proceeds of such chattel paper and general intangibles to the extent that
the assignment or encumbering of such proceeds is not so restricted and (B)
upon any such licensor, lessor or other applicable party consent with
respect to any such otherwise excluded chattel paper or general intangibles
being obtained, thereafter such chattel paper or general intangibles as
well as any and all proceeds thereof that might have theretofore have been
excluded from such grant of a security interest and the term "Collateral".
2.4. STOCK PLEDGE AGREEMENTS. Concurrently herewith, the Borrower
and the Guarantor are executing and delivering to the Agent, for the
benefit of the Banks and the Agent, Stock Pledge Agreements. Pursuant to
the Borrower Stock Pledge Agreement, the Borrower is pledging to the Agent,
for the benefit of the Banks and the Agent, all the shares of the capital
stock of the Borrower's Subsidiaries. Pursuant to the Parent Stock Pledge
Agreement, the Guarantor is pledging to the Agent, for the benefit of the
Banks and the Agent, all the shares of the capital stock of the Borrower.
Such pledges shall be governed by the terms of such Stock Pledge Agreements
and not by the terms of this Agreement.
2.5. TRADEMARK ASSIGNMENTS. Concurrently herewith the Borrower is
executing and delivering to the Agent, for the benefit of the Banks, the
Trademark Assignment pursuant to which the Borrower is assigning to the
Agent, for the benefit of the Banks, certain Collateral consisting of
trademarks, service marks and trademark and service xxxx rights, together
with the goodwill appurtenant thereto. The provisions of the Trademark
Assignment are supplemental to the provisions of this Agreement, and
nothing contained in the Trademark Assignment shall derogate from any of
the rights or remedies of the Banks or the Agent hereunder. Nor shall
anything contained the Trademark Assignment be deemed to prevent or extend
the time of attachment or perfection of any security interest in such
Collateral created hereby.
3. TITLE TO COLLATERAL, ETC. The Companies are the owners of the
Collateral free from any adverse lien, security interest or other encumbrance,
except for the security interest created by this Agreement and other liens
permitted by the Credit Agreement. None of the Collateral constitutes, or is
the proceeds of, "farm products" as defined in Section 9-109(3) of the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts. None of the
account debtors in respect of any accounts, chattel paper or general intangibles
and none of the obligors in respect of any instruments included in the
Collateral is a governmental authority subject to the Federal Assignment of
Claims Act.
4. CONTINUOUS PERFECTION. Each Company's chief executive office is
indicated on the Perfection Certificate of such Company delivered to the Bank
herewith (the "Perfection Certificate"). None of the Companies will
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change the same, or the name, identity or corporate structure of such Company in
any manner, without providing at least thirty (30) days prior written notice to
the Agent. Subject to Section 6 hereof, the Collateral, to the extent not
delivered to the Agent pursuant to Section 2.2, will be kept at those locations
listed on the Perfection Certificates except for inventory which is in transit
between such locations or is being returned to suppliers and none of the
Companies will remove the Collateral from such locations (except for inventory
which is in transit between such locations or is being returned to suppliers),
without providing at least thirty (30) days prior written notice to the Agent.
5. NO LIENS. Except for the security interest herein granted and liens
permitted by the Credit Agreement, the Companies shall be the owner of the
Collateral free from any lien, security interest or other encumbrance, and the
Companies shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the Agent or any
of the Banks. None of the Companies shall pledge, mortgage or create, or suffer
to exist a security interest in the Collateral in favor of any person other than
the Agent, for the benefit of the Banks, except for liens permitted by the
Credit Agreement.
6. NO TRANSFERS. None of the Companies will sell or offer to sell or
otherwise transfer the Collateral or any interest therein except for (i) sales
of inventory in the ordinary course of business and (ii) sales or other
dispositions of assets as contemplated or permitted by the Credit Agreement.
7. INSURANCE.
7.1. MAINTENANCE OF INSURANCE. Each of the Companies will maintain
with financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall
be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such
minimum amounts that such Company will not be deemed a co-insurer under
applicable insurance laws, regulations and policies and otherwise shall be
in such amounts, contain such terms, be in such forms and be for such
periods as may be reasonably satisfactory to the Agent. In addition, all
such insurance shall be payable to the Agent as loss payee under a
"standard" or "New York" loss payee clause. Without limiting the foregoing,
each of the Companies will (i) keep all of its physical property insured
with casualty or physical hazard insurance on an "all risks" basis, with a
full replacement cost endorsement and an "agreed amount" clause in an
amount equal to 100% of the full replacement cost of such property, (ii)
maintain all such workers' compensation or similar insurance as may be
required by law and (iii) maintain, in amounts and with deductibles equal
to those generally maintained by businesses engaged in similar activities
in similar
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geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of such Company; and business interruption insurance.
7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall, subject to the
rights, if any, of other parties with a prior interest in the property
covered thereby, (i) so long as no Event of Default has occurred and is
continuing and to the extent that the amount of such proceeds is less than
$5,000,000, be disbursed to the Company which suffers such loss for direct
application by such Company solely to the repair or replacement of such
Company's property so damaged or destroyed and (ii) in all other
circumstances, be held by the Agent as cash collateral for the Obligations.
The Agent may, at its sole option, disburse from time to time all or any
part of such proceeds so held as cash collateral, upon such terms and
conditions as the Agent may reasonably prescribe, for direct application by
the applicable Company solely to the repair or replacement of such
Company's property so damaged or destroyed, or the Agent may apply all or
any part of such proceeds to the Obligations with the Commitment (if not
then terminated) being reduced by the amount so applied to the Obligations.
7.3. NOTICE OF CANCELLATION, ETC. All policies of insurance shall
provide for at least ten (10) days prior written cancellation notice to the
Agent if cancellation is due to failure to pay premiums and thirty (30)
days prior written cancellation notice to the Agent if cancellation is due
to any other reason. In the event of failure by any Company to provide and
maintain insurance as herein provided, the Agent may, at its option,
provide such insurance and charge the amount thereof to such Company. The
Companies shall furnish the Agent with certificates of insurance and
policies evidencing compliance with the foregoing insurance provision.
8. MAINTENANCE OF COLLATERAL; COMPLIANCE WITH LAW. Each of the Companies
will keep the Collateral in good order and repair and will not use the same in
violation of law or any policy of insurance thereon. The Agent, or its
designee, may inspect the Collateral at any reasonable time within normal
business hours, wherever located. In accordance with the manner required under
Section 9.5 of the Credit Agreement, each of the Companies will pay all taxes,
assessments, governmental charges and levies upon the Collateral or incurred in
connection with the use or operation of such Collateral or incurred in
connection with this Agreement. Each of the Companies has at all times
operated, and each of the Companies will continue to operate, its business in
compliance in all material respects with all applicable provisions of the
federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control,
shipment, storage or
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disposal of hazardous materials or substances, except for any noncompliance
which would not have a Materially Adverse Effect.
9. COLLATERAL PROTECTION EXPENSES; PRESERVATION OF COLLATERAL.
9.1. EXPENSES INCURRED BY AGENT. In its discretion, the Agent may
discharge taxes and other encumbrances at any time levied or placed on any
of the Collateral, make repairs thereto and pay any necessary filing fees.
Each the Companies agrees jointly and severally to reimburse the Agent on
demand for any and all expenditures so made. The Agent shall have no
obligation to any of the Companies to make any such expenditures, nor shall
the making thereof relieve the Companies of any default.
9.2. AGENT'S OBLIGATIONS AND DUTIES. Anything herein to the contrary
notwithstanding, each of the Companies shall remain liable under each
contract or agreement comprised in the Collateral to be observed or
performed by such Company thereunder. Neither the Agent nor any Bank shall
have any obligation or liability under any such contract or agreement by
reason of or arising out of this Agreement or the receipt by the Agent or
any Bank of any payment relating to any of the Collateral, nor shall the
Agent or any Bank be obligated in any manner to perform any of the
obligations of any of the Companies under or pursuant to any such contract
or agreement, to make inquiry as to the nature or sufficiency of any
payment received by the Agent or any Bank in respect of the Collateral or
as to the sufficiency of any performance by any party under any such
contract or agreement, to present or file any claim, to take any action to
enforce any performance or to collect the payment of any amounts which may
have been assigned to the Agent or any Bank or to which the Agent or any
Bank may be entitled at any time or times. The Agent's sole duty with
respect to the custody, safe keeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts or otherwise, shall
be to deal with such Collateral in the same manner as the Agent deals with
similar property for its own account.
10. SECURITIES AND DEPOSITS. The Agent may at any time after an Event of
Default shall have occurred and be continuing, at its option, transfer to itself
or any nominee any securities constituting Collateral, receive any income
thereon and hold such income as additional Collateral or apply it to the
Obligations. Whether or not any Obligations are due, the Agent may, after an
Event of Default shall have occurred and be continuing, demand, xxx for,
collect, or make any settlement or compromise which it deems desirable with
respect to the Collateral. Regardless of the adequacy of Collateral or any
other security for the Obligations, any deposits or other sums at any time
credited by or due from the Agent or any Bank to any of the Companies may at any
time after an Event of Default shall have
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occurred and be continuing be applied to or set off against any of the
Obligations.
11. NOTIFICATION TO ACCOUNT DEBTORS AND OTHER OBLIGORS. If an Event of
Default shall have occurred and be continuing, each of the Companies shall, at
the request of the Agent, notify account debtors on accounts, chattel paper and
general intangibles of such Company and obligors on instruments for which such
Company is an obligee of the security interest of the Agent in any account,
chattel paper, general intangible or instrument and that payment thereof is to
be made directly to the Agent or to any financial institution designated by the
Agent as the Agent's agent therefor, and the Agent may itself, if an Event of
Default shall have occurred and be continuing, without notice to or demand upon
such Company, so notify account debtors and obligors. After the making of such
a request or the giving of any such notification, such Company shall hold any
proceeds of collection of accounts, chattel paper, general intangibles and
instruments received by such Company as trustee for the Agent without
commingling the same with other funds of such Company and shall turn the same
over to the Agent in the identical form received, together with any necessary
endorsements or assignments. The Agent shall apply the proceeds of collection
of accounts, chattel paper, general intangibles and instruments received by the
Agent to the Obligations, such proceeds to be immediately entered after final
payment in cash or solvent credits of the items giving rise to them.
12. FURTHER ASSURANCES. Each of the Companies, at its own expense, shall
do, make, execute and deliver all such additional and further acts, things,
deeds, assurances and instruments as the Agent may require more completely to
vest in and assure to the Agent and the Banks their respective rights hereunder
or in any of the Collateral, including, without limitation, (i) executing,
delivering and, where appropriate, filing financing statements and continuation
statements under the Uniform Commercial Code, (ii) using its reasonable efforts
to obtain governmental and other third party consents and approvals, including
without limitation any consent of any licensor, lessor or other applicable party
referred to in Section 2.3, PROVIDED that "reasonable efforts" shall not require
such Company to agree to any dimunition in its rights with respect to such third
parties or to make any additional payments to such third parties and (iii)
taking all actions required by Sections 8-313 and 8-321 of the Uniform
Commercial Code, as applicable in each relevant jurisdiction, with respect to
certificated and uncertificated securities; PROVIDED that, as to perfection, it
is understood and agreed that (a) no fixture filings or filings or recordations
as to any leasehold interests, or consent or other agreement from any landlord,
shall be required, except to the extent provided by Section 9.1(k) of the Third
Amendment and (b) unless there is a significant change from past practice as to
ownership of motor vehicles, no action beyond the filing of Uniform Commercial
Code financing statements shall be required with respect to motor vehicles.
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13. POWER OF ATTORNEY.
13.1. APPOINTMENT AND POWERS OF AGENT. Each of the Companies hereby
irrevocably constitutes and appoints the Agent and any officer or agent
thereof, with full power of substitution, as its true and lawful
attorneys-in-fact with full irrevocable power and authority in the place
and stead of such Company or in the Agent's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments that may be
necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives said
attorneys the power and right, on behalf of such Company, without notice to
or assent by such Company, to do the following:
(a) upon the occurrence and during the continuance of an Event
of Default, generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral in such
manner as is consistent with the Uniform Commercial Code as in effect
in the Commonwealth of Massachusetts and as fully and completely as
though the Agent were the absolute owner thereof for all purposes, and
to do at such Company's expense, at any time, or from time to time,
all acts and things which the Agent deems necessary to protect,
preserve or realize upon the Collateral and the Agent's security
interest therein, in order to effect the intent of this Agreement, all
as fully and effectively as such Company might do, including, without
limitation, (i) the filing and prosecuting of registration and
transfer applications with the appropriate federal or local agencies
or authorities with respect to trademarks, copyrights and patentable
inventions and processes, (ii) upon written notice to such Company,
the exercise of voting rights with respect to voting securities, which
rights may be exercised, if the Agent so elects, with a view to
causing the liquidation in a commercially reasonable manner of assets
of the issuer of any such securities and (iii) the execution, delivery
and recording, in connection with any sale or other disposition of any
Collateral, of the endorsements, assignments or other instruments of
conveyance or transfer with respect to such Collateral; and
(b) to file such financing statements with respect hereto, with
or without such Company's signature, or a photocopy of this Agreement
in substitution for a financing statement, as the Agent may deem
appropriate and to execute in such Company's name such financing
statements and amendments thereto and continuation statements which
may require such Company's signature.
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13.2. RATIFICATION BY COMPANIES. To the extent permitted by law,
each of the Companies hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney
is a power coupled with an interest and shall be irrevocable.
13.3. NO DUTY ON AGENT. The powers conferred on the Agent hereunder
are solely to protect the interests of the Agent and the Banks in the
Collateral and shall not impose any duty upon it to exercise any such
powers. The Agent shall be accountable only for the amounts that it
actually receives as a result of the exercise of such powers and neither it
nor any of its officers, directors, employees or agents shall be
responsible to any of the Companies for any act or failure to act, except
for the Agent's own gross negligence or willful misconduct.
14. REMEDIES. If an Event of Default shall have occurred and be
continuing, the Agent may, without notice to (except as required by applicable
law) or demand upon the Companies, declare this Agreement to be in default, and
the Agent shall thereafter have in any jurisdiction in which enforcement hereof
is sought, in addition to all other rights and remedies, the rights and remedies
of a secured party under the Uniform Commercial Code, including, without
limitation, the right to take possession of the Collateral, and for that purpose
the Agent may, so far as the Companies can give authority therefor, enter upon
any premises on which the Collateral may be situated and remove the same
therefrom. The Agent may in its discretion require the Companies to assemble
all or any part of the Collateral at such location or locations within the
state(s) of each Company's principal office(s) or at such other locations as the
Agent may designate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Agent shall give to the Companies at least ten (10) Business Days
prior written notice of the time and place of any public sale of Collateral or
of the time after which any private sale or any other intended disposition is to
be made. Each of the Companies hereby acknowledges that ten (10) Business Days
prior written notice of such sale or sales shall be reasonable notice. In
addition, each of the Companies waives any and all rights that it may have to a
judicial hearing in advance of the enforcement of any of the Agent's and the
Banks' rights hereunder, including, without limitation, their right following an
Event of Default to take immediate possession of the Collateral and to exercise
their rights with respect thereto. To the extent that any of the Obligations
are to be paid or performed by a person other than any of the Companies, each of
the Companies waives and agrees not to assert any rights or privileges which it
may have under Section 9-112 of the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts.
15. NO WAIVER, ETC. Each of the Companies waives demand, notice, protest,
notice of acceptance of this Agreement, notice of loans made, credit extended,
Collateral received or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With respect
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to both the Obligations and the Collateral, each of the Companies assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as the Agent may deem advisable. The Agent shall have no
duty as to the collection or protection of the Collateral or any income thereon,
nor as to the preservation of rights against prior parties, nor as to the
preservation of any rights pertaining thereto beyond the safe custody thereof as
set forth in Section 9.2. The Agent shall not be deemed to have waived any of
its rights upon or under the Obligations or the Collateral unless such waiver
shall be in writing and signed by the Agent. No delay or omission on the part
of the Agent in exercising any right shall operate as a waiver of such right or
any other right. A waiver on any one occasion shall not be construed as a bar
to or waiver of any right on any future occasion. All rights and remedies of
the Agent with respect to the Obligations or the Collateral, whether evidenced
hereby or by any other instrument or papers, shall be cumulative and may be
exercised singularly, alternatively, successively or concurrently at such time
or at such times as the Agent deems expedient.
16. MARSHALLING. The Agent shall not be required to marshal any present
or future collateral security (including but not limited to this Agreement and
the Collateral) for, or other assurances of payment of, the Obligations or any
of them or to resort to such collateral security or other assurances of payment
in any particular order, and all of its rights hereunder and in respect of such
collateral security and other assurances of payment shall be cumulative and in
addition to all other rights, however existing or arising. To the extent that
it lawfully may, each of the Companies hereby agrees that it will not invoke any
law relating to the marshalling of collateral which might cause delay in or
impede the enforcement of the Agent's rights under this Agreement or under any
other instrument creating or evidencing any of the Obligations or under which
any of the Obligations is outstanding or by which any of the Obligations is
secured or payment thereof is otherwise assured, and, to the extent that it
lawfully may, each of the Companies hereby irrevocably waives the benefits of
all such laws.
17. PROCEEDS OF DISPOSITIONS; EXPENSES. The Companies shall pay to the
Agent on demand any and all expenses, including reasonable attorneys' fees and
disbursements, incurred or paid by the Agent in protecting, preserving or
enforcing the Agent's or any Bank's rights under or in respect of any of the
Obligations or any of the Collateral. After deducting all of said expenses, the
residue of any proceeds of collection or sale of the Obligations or Collateral
shall, to the extent actually received in cash, be applied to the payment of the
Obligations in such order or preference as the Agent may determine, proper
allowance and provision being made for any Obligations not then due. Upon the
final payment and satisfaction in full of
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all of the Obligations and after making any payments required by Section
9-504(1)(c) of the Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts, any excess shall be returned to the Companies, and the Companies
shall remain liable for any deficiency in the payment of the Obligations.
18. OVERDUE AMOUNTS. Until paid, all amounts due and payable by any of
the Companies hereunder shall be a debt secured by the Collateral and shall
bear, whether before or after judgment, interest at the rate of interest for
overdue principal set forth in the Credit Agreement.
19. GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. Each of the
Companies agrees that any suit for the enforcement of this Agreement may be
brought in the courts of the Commonwealth of Massachusetts or any federal court
sitting therein and consents to the non-exclusive jurisdiction of such court and
to service of process in any such suit being made upon the Companies by mail at
the address specified by reference in Section 20 of the Credit Agreement. Each
of the Companies hereby waives any objection that it may now or hereafter have
to the venue of any such suit or any such court or that such suit is brought in
an inconvenient court.
20. WAIVER OF JURY TRIAL. EACH OF THE COMPANIES WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law,
each of the Companies waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each of the Companies (i) certifies that neither the Agent or
any Bank nor any representative, agent or attorney of the Agent or any Bank has
represented, expressly or otherwise, that the Agent or such Bank would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that, in entering into the Credit Agreement and the other Loan
Documents to which the Agent is a party, the Agent and the Banks are relying
upon, among other things, the waivers and certifications contained in this
Section 20.
21. MISCELLANEOUS. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon each of
the Companies and its respective successors and assigns, and shall inure to the
benefit of the Agent and the Banks and its successors and assigns. If any term
of this Agreement shall be held to be invalid, illegal or unenforceable, the
validity of all other terms hereof shall in no way be affected thereby, and this
Agreement shall be construed and be enforceable
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as if such invalid, illegal or unenforceable term had not been included herein.
Each of the Companies acknowledges receipt of a copy of this Agreement.
22. TRANSITIONAL ARRANGEMENTS. This Agreement shall supersede the First
Restated Security Agreement in its entirety on and as of the Closing Date. On
the Closing Date, the rights and obligations of the parties under the First
Restated Security Agreement shall be subsumed within and governed by this
Agreement; PROVIDED, that the provisions of the First Restated Security
Agreement shall remain in full force and effect prior to the Closing Date. The
security interest granted by this Agreement is an extension of the security
interest granted in the First Restated Security Agreement.
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IN WITNESS WHEREOF, intending to be legally bound, each of the Companies
has caused this Second Amended and Restated Security Agreement to be duly
executed as of the date first above written.
XXXXXXXXX XXXXX, INC.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Title: CFO
XXXXXXXXX XXXXX HOLDING, INC.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Title: CFO
XXXXXXXXX XXXXX
MERCHANDISING, INC.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Title: CFO
Accepted:
BANKBOSTON, N.A., AS AGENT
By: /s/ XXXXX X. XXXXXX
--------------------
Title: Director
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CERTIFICATE OF ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 23 day of December, 1998, personally appeared Xxxxxx X.
Xxxxxx to me known personally, and who, being by me duly sworn, deposes and
says that he is the CFO of each of Xxxxxxxxx Xxxxx, Inc., Xxxxxxxxx Xxxxx
Holding, Inc. and Xxxxxxxxx Xxxxx Merchandising, Inc. and that said
instrument was signed and sealed on behalf of each of said corporations by
authority of its Board of Directors, and said Xxxxxx X. Xxxxxx acknowledged
said instrument to be the free act and deed of each of said corporations.
/s/ XXXXXXX X. XXXXX
----------------------------
Notary Public
My commission expires:
