Execution Copy
AMENDED AND RESTATED
SECURITY AGREEMENT
DATED AS OF JULY 2, 1997
BETWEEN
XXXXXXXXX XXXXX CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
TABLE OF CONTENTS
SECTION 1. DEFINED TERMS................................................... 1
SECTION 2. GRANT OF SECURITY............................................... 2
SECTION 3. AUTHORIZATION................................................... 5
SECTION 4. GRANTOR REMAINS LIABLE.......................................... 5
SECTION 5. REPRESENTATIONS AND WARRANTIES.................................. 6
SECTION 6. PERFECTION AND MAINTENANCE OF SECURITY INTEREST AND LIEN........ 7
SECTION 7. FINANCING STATEMENTS............................................ 8
SECTION 8. FILING COSTS.................................................... 8
SECTION 9. SCHEDULE OF COLLATERAL.......................................... 8
SECTION 10. EQUIPMENT AND INVENTORY......................................... 8
SECTION 11. ACCOUNTS........................................................ 9
SECTION 12. LEASED REAL PROPERTY............................................ 10
SECTION 13. GENERAL COVENANTS............................................... 10
SECTION 14. AGENT APPOINTED ATTORNEY-IN-FACT................................ 11
SECTION 15. AGENT MAY PERFORM............................................... 11
SECTION 16. AGENT'S DUTIES.................................................. 12
SECTION 17. REMEDIES........................................................ 12
SECTION 18. EXERCISE OF REMEDIES............................................ 13
SECTION 19. LICENSE......................................................... 13
SECTION 20. INJUNCTIVE RELIEF............................................... 14
SECTION 21. INTERPRETATION AND INCONSISTENCIES.............................. 14
- i -
SECTION 22. EXPENSES........................................................ 14
SECTION 23. AMENDMENTS, ETC................................................. 14
SECTION 24. NOTICES......................................................... 14
SECTION 25. CONTINUING SECURITY INTEREST; TERMINATION....................... 14
SECTION 26. SEVERABILITY.................................................... 15
SECTION 27. GOVERNING LAW................................................... 15
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL......... 15
(A) EXCLUSIVE JURISDICTION........................................ 15
(B) OTHER JURISDICTIONS........................................... 16
(C) SERVICE OF PROCESS............................................ 16
(D) WAIVER OF JURY TRIAL.......................................... 16
(E) WAIVER OF BOND................................................ 16
(F) ADVICE OF COUNSEL............................................. 17
- ii -
AMENDED AND RESTATED SECURITY AGREEMENT
This AMENDED AND RESTATED SECURITY AGREEMENT ("AGREEMENT"), dated as
of July 2, 1997 is made by XXXXXXXXX XXXXX CORPORATION, an Illinois corporation
("GRANTOR"), in favor of THE FIRST NATIONAL BANK OF CHICAGO, as "Agent" for its
benefit and for the benefit of the "Holders of Secured Obligations" (as defined
below) who are, or may hereafter become, parties to the Credit Agreement
referred to below.
PRELIMINARY STATEMENT
Grantor entered into that certain Credit Agreement dated as of August
12, 1994 among Grantor, Xxxxxx May Holdings, Inc., a Delaware corporation, the
institutions from time to time party thereto as lenders and the Agent (as the
same has been amended, restated, supplemented or otherwise modified prior to the
date hereof, the "ORIGINAL CREDIT AGREEMENT")
Grantor has entered into an Amended and Restated Credit Agreement
dated as of the date hereof among Grantor, the institutions from time to time
party thereto as lenders (the "Lenders") and the Agent (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), providing for the making of loans, advances and other
financial accommodations (including, without limitation issuing letters of
credit) (all such loans, advances and other financial accommodations being
hereinafter referred to collectively as the "LOANS") to or for the benefit of
Grantor.
Grantor and the Agent are parties to that certain Security Agreement
dated as of August 12, 1994 (as the same has been amended, supplemented or
modified prior to the date hereof, the "Original Security Agreement") pursuant
to which the Borrower granted a security interest in certain of its assets to
the Agent for the benefit of itself, and those lenders party to the Original
Credit Agreement as security for the Borrower's obligations thereunder.
It is a condition precedent to the making of the Loans under the
Credit Agreement that Grantor shall have granted the security interest
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined, and the
following terms shall have the following meanings (such meanings being equally
applicable to both the singular and the plural forms of the terms defined):
"AGREEMENT" shall mean this Security Agreement, as the same may from
time to time be amended, restated, modified or supplemented, and shall refer to
this Agreement as the same may be in effect at the time such reference becomes
operative.
"COLLATERAL" shall mean all property and rights in property now owned
or hereafter at any time acquired by Grantor in or upon which a Lien is granted
or purported to be granted in favor of the Agent by Grantor under this
Agreement, including, without limitation, the property described in SECTION 2.
"HOLDERS OF SECURED OBLIGATIONS" shall mean the holders of the Secured
Obligations from time to time and shall include their respective successors,
transferees and assigns.
"UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Illinois; PROVIDED, HOWEVER, if, by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of the Agent's and the Holders of Secured Obligations' security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of Illinois, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
SECTION 2. GRANT OF SECURITY. To secure the prompt and complete
payment, observance and performance of the Secured Obligations, Grantor hereby
assigns and pledges to the Agent, for the benefit of the Agent and the Holders
of Secured Obligations, and hereby grants to the Agent, for the benefit of the
Agent and the Holders of Secured Obligations, a security interest in all of
Grantor's right, title and interest in and to the following, subject to the last
paragraph of this SECTION 2, whether now owned or existing or hereafter arising
or acquired and wheresoever located:
ACCOUNTS: All "accounts" as such term is defined in Section 9-106 of
the UCC, whether now owned or hereafter acquired or arising, and shall include,
without limitation, all present and future accounts, accounts receivable and
other rights of Grantor to payment for goods sold or leased or for services
rendered (except those evidenced by instruments or chattel paper), whether now
existing or hereafter arising and wherever arising, and whether or not they have
been earned by performance (collectively, "ACCOUNTS"); and
INVENTORY: All "inventory" as defined in Section 9-109(4) of the UCC,
whether now owned or hereafter acquired or arising, and shall include, without
limitation, all goods now owned or hereafter acquired by Grantor (wherever
located, whether in the possession of Grantor or of a bailee or other person for
sale, storage, transit, processing, use or otherwise and whether consisting of
whole goods, spare parts, components, supplies, materials, or consigned,
returned or repossessed goods) which are held for sale or lease (including
without limitation, freezers and trade name superstructures), which are to be
furnished (or have been furnished) under any contract of service or which are
raw materials, work in process or materials used or consumed in Grantor's
business (collectively, "INVENTORY").
SECTION 3. AUTHORIZATION. Grantor hereby authorizes the Agent to
retain and each Holder of Secured Obligations, and each Affiliate of the Agent
and of each Holder of Secured Obligations, to pay or deliver to the Agent, for
the benefit of the Holders of Secured
-2-
Obligations, without any necessity on any Holder of Secured Obligation's part to
resort to other security or sources of reimbursement for the Secured
Obligations, at any time following the occurrence and during the continuance of
any Default, without prior notice to Grantor (such notice being expressly
waived), any of the deposits referred to in SECTION 2 (whether general or
special, time or demand, provisional or final) or other sums or property held by
such Person, for application against any portion of the Secured Obligations,
irrespective of whether any demand has been made or whether such portion of the
Secured Obligations is mature. The Agent will promptly notify Grantor of the
Agent's receipt of such funds or other property for application against the
Secured Obligations, but failure to do so will not affect the validity or
enforceability thereof. The Agent may give notice of the above grant of
security interest and assignment of the aforesaid deposits and other sums, and
authorization, to, and make any suitable arrangements with, any such Holder of
Secured Obligations for effectuation thereof, and Grantor hereby irrevocably
appoints the Agent as its attorney-in-fact to collect, following the occurrence
and during the continuance of a Default, any and all such deposits or other sums
to the extent any such payment is not made to the Agent by such Holder of
Secured Obligation or Affiliate thereof.
SECTION 4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (a) Grantor shall remain solely liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Agent of any of its
rights hereunder shall not release Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral, and (c) neither
the Agent nor the Holders of Secured Obligations shall have any responsibility,
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall the Agent or the Holders of
Secured Obligations be required or obligated, in any manner, to (i) perform or
fulfill any of the obligations or duties of Grantor thereunder, (ii) make any
payment, or make any inquiry as to the nature or sufficiency of any payment
received by Grantor or the sufficiency of any performance by any party under any
such contract or agreement or (iii) present or file any claim, or take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants, as of the date of this Agreement and as of each date the
representations and warranties contained in Article V of the Credit Agreement
are deemed made pursuant to Section 4.2 thereof (except for changes permitted or
contemplated by this Agreement):
(a) Grantor's correct corporate name is set forth in the first
paragraph of this Agreement. The jurisdictions listed on SCHEDULE 2-B
constitute all the jurisdictions in which Inventory is located and Grantor has
exclusive possession and control of such Inventory, except for such Inventory
which is (i) temporarily in transit between such locations, or (ii) temporarily
stored with third parties or held by third parties on consignment or for
processing, engineering, evaluation or repairs, the proper corporate names of
which third parties, the location of such Inventory and the nature of the
relationship between Grantor and such third parties are set forth in SCHEDULE
2-A or have been disclosed to the Agent in a writing making specific reference
to this SECTION 5(a). Grantor's chief place of business and chief executive
office are located at
-3-
the address of Grantor set forth below Grantor's signature on the Credit
Agreement and all records concerning any Accounts are located at such address
and none of the Accounts is evidenced by a promissory note or other instrument
except for such notes and other instruments delivered to the Agent;
(b) Grantor currently conducts business under the name Xxxxxxxxx
Xxxxx Corporation and, in certain areas and for certain operations, the trade
names listed on SCHEDULE 3;
(c) This Agreement creates in favor of the Agent a legal, valid and
enforceable security interest in the Collateral. When financing statements have
been filed in the appropriate offices against Grantor in the jurisdictions
listed on SCHEDULE 2-B, the Agent will have a perfected first priority lien on,
and security interest in, the Collateral in which a security interest may be
perfected by such filing, subject only to Liens permitted by Section 6.3(C) of
the Credit Agreement; and
(d) No authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority that has not already been taken or
made and which is in full force and effect or which is to be taken or made in
connection with the transactions contemplated to occur under the Loan Documents
on the Closing Date, is required (i) for the grant by Grantor of the security
interest in the Collateral granted hereby or (ii) for the exercise by the Agent
of any of its rights or remedies hereunder.
SECTION 6. PERFECTION AND MAINTENANCE OF SECURITY INTEREST AND LIEN.
Grantor agrees that until all of the Obligations (other than contingent
indemnity Obligations) have been fully satisfied and the Credit Agreement has
been terminated, the Agent's security interests in and Liens on and against the
Collateral and all proceeds and products thereof, shall continue in full force
and effect. Grantor shall perform any and all steps reasonably requested by the
Agent to perfect, maintain and protect the Agent's security interests in and
Liens on and against the Collateral granted or purported to be granted hereby or
to enable the Agent to exercise its rights and remedies hereunder with respect
to any Collateral, including, without limitation, (i) executing and filing
financing or continuation statements, or amendments thereof, in form and
substance reasonably satisfactory to the Agent, (ii) delivering to the Agent
warehouse receipts covering that portion of the Collateral, if any, located in
warehouses and for which warehouse receipts are issued, (iii) after the
occurrence and during the continuance of a Default, transferring Inventory to
warehouses designated by the Agent or taking such other steps as are deemed
necessary by the Agent to maintain the Agent's control of the Inventory, (iv)
using all reasonable efforts to obtain waivers of Liens and access agreements in
substantially the form of EXHIBIT A hereto (or such other form as may be agreed
to by the Agent) from landlords and mortgagees with respect to Grantor's leased
premises (excluding Grantor's leased retail store locations), (v) using all
reasonable efforts to obtain waivers of Liens and access agreements in
substantially the form of EXHIBIT B hereto (or such other form as may be agreed
to by the Agent) from bailees with respect to any of Grantor's Inventory held by
such bailees, and (vi) executing and delivering all further instruments and
documents, and taking all further action, as the Agent may reasonably request.
-4-
SECTION 7. FINANCING STATEMENTS. To the extent permitted by
applicable law, Grantor hereby authorizes the Agent to file one or more
financing or continuation statements and amendments thereto, disclosing the
security interest granted to the Agent under this Agreement, without Grantor's
signature appearing thereon. The Agent agrees to notify Grantor when any such
filing has been made. Grantor agrees that a carbon, photographic, photostatic,
or other reproduction of this Agreement or of a financing statement is
sufficient as a financing statement. If any Inventory is in the possession or
control of any warehouseman or Grantor's agents or processors, Grantor shall,
upon the Agent's request, notify such warehouseman, agent or processor of the
Agent's security interest in such Inventory and, upon the Agent's request,
instruct them to hold all such Inventory for the Agent's account and subject to
the Agent's instructions.
SECTION 8. FILING COSTS. Grantor shall pay the costs of, or
incidental to, all recordings or filings of all financing statements, including,
without limitation, any filing expenses incurred by the Agent pursuant to
SECTION 7.
SECTION 9. SCHEDULE OF COLLATERAL. Grantor shall furnish to the
Agent from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.
SECTION 10. INVENTORY. Grantor covenants and agrees with the Agent
that from the date of this Agreement and until termination of this Agreement
pursuant to SECTION 25, Grantor shall:
(a) Keep the Inventory (other than Inventory sold or disposed of in
accordance with the terms of this Agreement or the Credit Agreement) in the
jurisdictions specified in SCHEDULE 2-B, except for Inventory described in
clauses (i) and (ii) of SECTION 5(a). All such Inventory held at third party
locations listed on SCHEDULE 2-A shall be covered by a financing statement filed
in one of the jurisdictions listed on SCHEDULE 2-B.
(b) Deliver written notice to the Agent at least five (5) Business
Days prior to moving/delivering any Inventory (i) to any jurisdiction not
previously disclosed on SCHEDULE 2-B or (ii) to a third party not previously
disclosed on SCHEDULE 2-A, such written notice to provide information such that
the Agent may determine whether such movement/delivery requires further action
on the part of Grantor to perfect the security interests granted herein or on
the part of a third party to fully comply with the terms of this Agreement, such
written notice properly delivered to the Agent pursuant to this clause (b) shall
be deemed to add all locations or third parties disclosed therein to SCHEDULE
2-A and/or SCHEDULE 2-B, as applicable; and
(c) Comply with the terms of the Credit Agreement with respect to
such Inventory, including, without limitation, the maintenance and insurance
provisions set forth in Sections 6.2(F) and 6.2(J) of the Credit Agreement.
-5-
SECTION 11. ACCOUNTS. Grantor covenants and agrees with the Agent
that from and after the date of this Agreement and until termination of this
Agreement pursuant to SECTION 25, Grantor shall:
(a) Keep its chief place of business and chief executive office and
the office where it keeps its records concerning the Accounts at its address set
forth below its signature on the Credit Agreement at the locations therefor
specified in SECTION 5(a) or, upon thirty (30) days prior written notice to the
Agent, at such other locations within the United States in a jurisdiction where
all actions required by SECTION 6 shall have been taken with respect to the
Accounts. Grantor will hold and preserve such records (in accordance with
Grantor's usual document retention practices) and will permit representatives of
the Agent at any time during normal business hours to inspect and make abstracts
from such records; and
(b) In any suit, proceeding or action brought by the Agent under any
Account comprising part of the Collateral, Grantor will save, indemnify and keep
each of the Holders of Secured Obligations harmless from and against all
expenses, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by Grantor of any obligation or arising out
of any other agreement, indebtedness or liability at any time owing to or in
favor of such Holder of Secured Obligations from Grantor, and all such
obligations of Grantor shall be and shall remain enforceable against and only
against Grantor and shall not be enforceable against any of the Holders of
Secured Obligations.
(c) Upon the occurrence and during the continuance of a Default and
upon notice from the Agent, when Grantor or any of its Subsidiaries (or any
Affiliates, shareholders, directors, officers, employees, agents or those
Persons acting for or in concert with Grantor or a Subsidiary of Grantor) shall
receive or come into the possession or control of any monies, checks, notes,
drafts or any other payment relating to, or proceeds of, Grantor's Accounts or
other property constituting Collateral hereunder (individually, a "PAYMENT
ITEM", and, collectively, "PAYMENT ITEMS"), then, except as otherwise permitted
in a writing signed by the Agent, Grantor shall, or shall cause such Subsidiary
or such other Person to, deposit the same, in kind in precisely the form in
which such Payment Item was received (with all Payment Items endorsed if
necessary for collection), into an account as directed by the Agent from time to
time.
SECTION 12. LEASED REAL PROPERTY. Grantor covenants and agrees with
the Agent that from and after the date of this Agreement and until termination
of this Agreement pursuant to SECTION 25, that:
(a) Promptly following, but not later than ninety (90) days after,
the close of each fiscal year Grantor will furnish to the Agent a report
certified to be true and correct by Grantor containing a list of each of
Grantor's leased premises; the name or names of all owners; rentals being paid;
and whether Grantor has obtained waivers of Liens and access agreements from
landlords and mortgagees with respect to such premises in accordance with
SECTION 6, where such waivers or access agreements are required; and
-6-
(b) Grantor agrees that, from and after the occurrence of a Default
(but only for so long as such Default is continuing), the Agent may, but need
not, make any payment or perform any act hereinbefore required of Grantor with
respect to Grantor's leased premises in any form and manner deemed expedient.
All money paid for any of the purposes herein authorized and all other moneys
advanced by the Agent to protect the lien hereof shall be additional Secured
Obligations secured hereby and shall become immediately due and payable without
notice and shall bear interest thereon at the default interest rate as provided
in Section 2.11 of the Credit Agreement until paid to the Agent in full.
SECTION 13. GENERAL COVENANTS. Grantor covenants and agrees with the
Agent that from and after the date of this Agreement and until termination of
this Agreement pursuant to SECTION 25, Grantor shall:
(a) Keep and maintain at Grantor's own cost and expense satisfactory
and complete records of Grantor's Collateral in a manner consistent with
Grantor's current business practice; and
(b) Grantor will not create, permit or suffer to exist, and will
defend the Collateral against, and take such other action as is necessary to
remove, any Lien on such Collateral other than Liens permitted under Section
6.3(C) of the Credit Agreement, and will defend the right, title and interest of
the Agent in and to Grantor's rights to such Collateral, including, without
limitation, the proceeds and products thereof, against the claims and demands of
all Persons whatsoever.
SECTION 14. AGENT APPOINTED ATTORNEY-IN-FACT. Grantor hereby
irrevocably appoints the Agent as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor and in the name of Grantor or
otherwise, from time to time after the occurrence and during the continuance of
a Default, in the Agent's discretion, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:
(i) obtain and adjust insurance required to be paid to the Agent or any
Holders of Secured Obligations pursuant to the Credit Agreement;
(ii) ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;
(iii) receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with CLAUSE (I) or (II) above;
(iv) file any claims or take any action or institute any proceedings which
the Agent may deem necessary or desirable for the collection of any of the
Collateral, or otherwise to enforce the rights of the Agent with respect to any
of the Collateral;
-7-
(v) obtain access to records maintained for Grantor by computer services
companies and other service companies or bureaus; and
(vi) send requests under Grantor's, the Agent's or a fictitious name to
Grantor's customers or account debtors for verification of Accounts provided
that the Agent gives Grantor notice prior to initiating any such verifications.
Grantor hereby ratifies all that such attorney-in-fact shall lawfully do or
cause to be done by virtue hereof. This power of attorney is coupled with an
interest and shall be irrevocable.
SECTION 15. AGENT MAY PERFORM. Subject to the terms of Section 9.3 of the
Credit Agreement, if Grantor fails to perform any agreement contained herein or
in the Credit Agreement, the Agent may, upon three (3) days prior notice to
Grantor, perform, or cause performance of, such agreement, and the expenses of
the Agent incurred in connection therewith shall be payable by Grantor under
SECTION 22.
SECTION 16. AGENT'S DUTIES. The powers conferred on the Agent hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Agent shall not have any duty as to any Collateral, PROVIDED,
HOWEVER, that nothing contained herein will excuse the Agent from it own bad
faith, Gross Negligence or willful misconduct with respect to such custody. The
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Agent accords its own property,
it being understood that the Agent shall be under no obligation to take any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral, but may do so at its option, and all reasonable
expenses incurred in connection therewith shall be for the sole account of
Grantor and shall be added to the Secured Obligations.
SECTION 17. REMEDIES. (a) If any Default shall have occurred and be
continuing:
(i) The Agent shall have, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party upon default under the UCC (whether or not the UCC applies to
the affected Collateral) and further, the Agent may, without notice, demand or
legal process of any kind (except as may be required by law), all of which
Grantor waives, at any time or times, (x) enter Grantor's owned or leased
premises and take physical possession of the Collateral and maintain such
possession on Grantor's owned or leased premises, at no cost to the Agent or any
of the Holders of Secured Obligations, or remove the Collateral, or any part
thereof, to such other place(s) as the Agent may desire, (y) require Grantor to,
and Grantor hereby agrees that it will at its expense and upon request of the
Agent forthwith, assemble all or any part of the Collateral as directed by the
Agent and make it available to the Agent at a place to be designated by the
Agent which is reasonably convenient to the Agent and (z) without notice except
as specified below, sell, lease, assign, grant an option or options to purchase
or otherwise dispose of the Collateral or any part thereof
-8-
at public or private sale, at any exchange, broker's board or at any of the
offices of the Agent or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Agent may deem commercially reasonable.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to Grantor 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; PROVIDED, HOWEVER, that the Agent may give any shorter
notice that is commercially reasonable under the circumstances. The Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Agent 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;
(ii) The Agent shall apply all cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization upon all
or any part of the Collateral (after payment of any amounts payable to the Agent
pursuant to SECTION 22), for the benefit of the Holders of Secured Obligations,
against all or any part of the Secured Obligations in such order as may be
required by the Credit Agreement or, to the extent not specified therein, as is
determined by the Required Lenders. Any surplus of such cash or cash proceeds
held by the Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to Grantor or to whomsoever may be lawfully
entitled to receive such surplus;
(b) Grantor waives all claims, damages and demands against the Agent
arising out of the repossession, retention or sale of any of the Collateral or
any part or parts thereof, except any such claims, damages and awards arising
out of the Agent's or any Holder of Secured Obligation's bad faith, Gross
Negligence, willful misconduct, as determined in a final non-appealed judgment
of a court of competent jurisdiction; and
(c) The rights and remedies provided under this Agreement are
cumulative and may be exercised singly or concurrently and are not exclusive of
any rights and remedies provided by law or equity.
SECTION 18. EXERCISE OF REMEDIES. In connection with the exercise
of its remedies pursuant to SECTION 17, the Agent may, (i) exchange, enforce,
waive or release any portion of the Collateral and any other security for the
Secured Obligations; (ii) apply such Collateral or security and direct the order
or manner of sale thereof as the Agent may, from time to time, determine; and
(iii) settle, compromise, collect or otherwise liquidate any such Collateral or
security in any manner following the occurrence and during the continuance of a
Default, without affecting or impairing the Agent's right to take any other
further action with respect to any Collateral or security or any part thereof.
SECTION 19. LICENSE. The Agent is hereby granted a license or other
right to use, following the occurrence and during the continuance of a Default,
without charge, (a) Grantor's labels, patents, copyrights, trade secrets, trade
names, trademarks, service marks, customer lists and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral, provided that
the Agent uses quality standards at least substantially equivalent to those of
Grantor for the manufacture, advertising, sale and distribution of Grantor's
products and services and (b)
-9-
Grantor's rights under all licenses and all franchise agreements, if any, shall
inure to the Agent's benefit.
SECTION 20. INJUNCTIVE RELIEF. Grantor recognizes that in the event
Grantor fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy of law may prove to be inadequate
relief to the Holders of Secured Obligations; therefore, Grantor agrees that the
Holders of Secured Obligations, if the Agent so determines and requests, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
SECTION 21. INTERPRETATION AND INCONSISTENCIES. The rights and
duties created by this Agreement shall, in all cases, be interpreted
consistently with, and shall be in addition to (and not in lieu of), the rights
and duties created by the Credit Agreement and the other Loan Documents. In the
event that any provision of this Agreement shall be inconsistent with any
provision of any other Loan Document, such provision of the other Loan Document
shall govern.
SECTION 22. EXPENSES. Grantor will reimburse the Agent for its
expenses to the extent provided in Section 9.7 of the Credit Agreement.
SECTION 23. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Agent
and Grantor, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 24. NOTICES. All notices and other communications provided
for hereunder shall be delivered in the manner set forth in Article XIII of the
Credit Agreement.
SECTION 25. CONTINUING SECURITY INTEREST; TERMINATION. (a) Except as
provided in SECTION 25(b), this Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the later of the payment or satisfaction in full of the Obligations (other than
contingent indemnity obligations) and the termination of the Credit Agreement,
(ii) be binding upon Grantor, its successors and assigns and (iii) except to the
extent that the rights of any transferor, or assignor are limited by the terms
of the Credit Agreement, inure, together with the rights and remedies of the
Agent hereunder, to the benefit of the Agent and any of the Holders of Secured
Obligations. Nothing set forth herein or in any other Loan Document is intended
or shall be construed to give any other Person any right, remedy or claim under,
to or in respect of this Agreement or any other Loan Document or any Collateral.
Grantor's successors and assigns shall include, without limitation, a receiver,
trustee or debtor-in-possession thereof or therefor.
(b) Upon satisfaction in full of the Obligations (other than
contingent indemnity obligations) and the termination of the Credit Agreement,
this Agreement and the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to Grantor. Upon any such termination of
security interest, Grantor shall be entitled to the return, upon its request and
at its expense, of such of the Collateral held by the Agent as shall not have
-10-
been sold or otherwise applied pursuant to the terms hereof and the Agent will,
at Grantor's expense, execute and deliver to Grantor such other documents as
Grantor shall reasonably request to evidence such termination. In connection
with any sales of assets permitted under the Credit Agreement, the Agent will
release and terminate the liens and security interests granted under this
Agreement with respect to such assets.
SECTION 26. SEVERABILITY. It is the parties' intention that this
Agreement be interpreted in such a way that it is valid and effective under
applicable law. However, if one or more of the provisions of this Agreement
shall for any reason be found to be invalid or unenforceable, the remaining
provisions of this Agreement shall be unimpaired.
SECTION 27. GOVERNING LAW. THIS AGREEMENT HAS BEEN NEGOTIATED,
EXECUTED AND DELIVERED IN CHICAGO, ILLINOIS. THE AGENT HEREBY ACCEPTS THIS
AGREEMENT, ON BEHALF OF ITSELF AND THE LENDERS, AT CHICAGO, ILLINOIS BY
ACKNOWLEDGING AND AGREEING TO IT THERE. ANY DISPUTE BETWEEN GRANTOR AND THE
AGENT, ANY LENDER, OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE CONFLICT OF LAWS PRINCIPLES) OF THE STATE OF ILLINOIS.
SECTION 28. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. Except as provided in SUBSECTION (B), each of
the parties hereto agrees that all disputes between them arising out of,
connected with, related to, or incidental to the relationship established
between them in connection with this Agreement, whether arising in contract,
tort, equity, or otherwise, shall be resolved exclusively by state or federal
courts located in Chicago, Illinois, but the parties hereto acknowledge that any
appeals from those courts may have to be heard by a court located outside of
Chicago, Illinois. Each of the parties hereto waives in all disputes brought
pursuant to this subsection any objection that it may have to the location of
the court considering the dispute.
(B) OTHER JURISDICTIONS. Grantor agrees that the Agent, any Lender or any
Holder of Secured Obligations shall have the right to proceed against Grantor or
its property in a court in any location to enable such Person to (1) obtain
personal jurisdiction over Grantor or (2) realize on the Collateral or any other
security for the Obligations or to enforce a judgment or other court order
entered in favor of such Person. Grantor agrees that it will not assert any
permissive counterclaims in any proceeding brought by such Person to realize on
the Collateral or any other security for the Obligations or to enforce a
judgment or other court order in favor of such Person. Grantor waives any
objection that it may have to the location of the court in which such Person has
commenced a proceeding described in this subsection.
(C) SERVICE OF PROCESS. Grantor waives personal service of any process
upon it. Grantor irrevocably waives any objection (including, without
limitation, any objection of the laying of
-11-
venue or based on the grounds of FORUM NON CONVENIENS) which it may now or
hereafter have to the bringing of any such action or proceeding with respect to
this Agreement or any other instrument, document or agreement executed or
delivered in connection herewith in any jurisdiction set forth above.
(D) WAIVER OF JURY TRIAL. EACH OF GRANTOR AND AGENT, FOR ITSELF AND THE
HOLDERS OF SECURED OBLIGATIONS, IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. Grantor waives the posting of any bond otherwise
required of any party hereto in connection with any judicial process or
proceeding to realize on the collateral or any other security for the Secured
Obligations or to enforce any judgment or other court order entered in favor of
such party, or to enforce by specific performance, temporary restraining order,
preliminary or permanent injunction, this Agreement.
(F) ADVICE OF COUNSEL. Each of the parties represents to each other party
hereto that it has discussed this agreement and, specifically, the provisions of
this SECTION 28, with its counsel.
-12-
IN WITNESS WHEREOF, each of Grantor and the Agent has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
XXXXXXXXX XXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President-Finance and
Accounting
THE FIRST NATIONAL BANK
OF CHICAGO, as Agent
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
-13-
EXHIBIT A
To
Amended and Restated Security Agreement
FORM OF LANDLORD/MORTGAGEE AGREEMENT:
Attached
[Form of Landlord Agreement]
The First National Bank of Chicago,
as Agent
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention:
Ladies and Gentlemen:
Xxxxxxxxx Xxxxx Corporation, an Illinois corporation ("Borrower"), is
the lessee under that certain lease ("Lease") dated between
Borrower, and the undersigned, covering certain premises located at
_________________ (the "Premises") more fully described in the lease attached
hereto as EXHIBIT A ("Lease"). The undersigned is the sole owner of the
Premises. Borrower has certain of its assets located on the Premises.
Borrower has entered into certain financing arrangements with a group
of lenders (the "Lenders") including The First National Bank of Chicago, both as
a Lender and in its separate capacity as the contractual representative of the
Lenders (the "Agent") and, as a condition to the loans and other financial
accommodations of the Lenders to Borrower, the Agent and the Lenders require,
among other things, that Borrower grant liens in favor of the Agent for the
benefit of itself and the Lenders on all of Borrower's property located on the
Premises ("Collateral").
To induce the Agent and the Lenders (together with their agents,
successors and assigns) to enter into said financing arrangements, and for other
good and valuable consideration, the undersigned hereby agrees that:
(i) the Lease represents the full and complete agreement between
Borrower and the undersigned concerning the Premises;
(ii) it will not assert against any of Borrower's assets any
statutory or possessory liens, including, without limitation, rights of
levy or distraint for rent, all of which it hereby waives;
(iii) none of the Collateral located on the Premises
shall be deemed to be fixtures;
(iv) it will notify the Agent if Borrower defaults on
its lease obligations to the undersigned and allow the Agent
thirty (30) days from the Agent's receipt of notice in which
to cure or cause Borrower to cure any such defaults;
(v) if, for any reason whatsoever, the undersigned
either deems itself entitled to redeem or to take possession
of the Premises during the term of
Borrower's lease or intends to sell or otherwise transfer all
or any part of its interest in the Premises, the undersigned
will notify the Agent five (5) days before taking such
action;
(vi) if Borrower defaults on its obligations to the
Agent or any Lender and, as a result, the Agent undertakes to
enforce its security interest in the Collateral, the
undersigned will cooperate with the Agent in its efforts to
assemble all of the Collateral located on the Premises, will
permit the Agent to remain on the Premises for ninety (90)
days after the Agent declares the default, provided the Agent
pays the rental payments due under the Lease for the period
of time the Agent uses the Premises, or, at the Agent's
option, to remove the Collateral from the Premises within a
reasonable time, not to exceed ninety (90) days after the
Agent declares the default, provided the Agent pays the
rental payments due under the Lease for the period of time
the Agent uses the Premises, and will not hinder the Agent's
actions in enforcing its liens on the Collateral.
Any notice(s) required or desired to be given hereunder
shall be directed to the party to be notified at the address
stated herein.
The agreements contained herein shall continue in force
until all of Borrower's obligations and liabilities to the Agent
and the Lenders are paid and satisfied in full and all financing
arrangements among the Agent, the Lenders and Borrower have been
terminated.
The undersigned will notify all successor owners,
transferees, purchasers and mortgagees of the existence of this
waiver. The agreements contained herein may not be modified or
terminated orally and shall be binding upon the successors,
assigns and personal representatives of the undersigned, upon any
successor owner or transferee of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
-2-
Executed and delivered this day of ,
199_, at .
[Name and Address of Lessor]
(By)
---------------------
-3-
EXHIBIT B
To
Amended and Restated Security Agreement
FORM OF BAILEE LETTER:
Attached
[Form of Bailee Letter]
The First National Bank
of Chicago, as Agent
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention:
Ladies and Gentlemen:
Xxxxxxxxx Xxxxx Corporation, an Illinois corporation
("Borrower"), now does or hereafter may store certain of its
merchandise, inventory, or other of its personal property at
premises (the "Premises") owned or leased by [Name of Bailee],
including, without limitation, such Premises described on EXHIBIT
A attached hereto.
Borrower has entered into certain financing arrangements
with certain financial institutions (the "Lenders") including The
First National Bank of Chicago, both as a Lender and in its
separate capacity as the contractual representative of the Lenders
(the "Agent") and, as a condition to the loans and other financial
accommodations of the Lenders to Borrower, the Agent and the
Lenders require, among other things, that Borrower grant liens in
favor of the Agent for the benefit of the Lenders on all of
Borrower's property located on the Premises ("Collateral").
To induce the Lenders (together with their respective
agents and assigns) to enter into said financing arrangements, and
for other good and valuable consideration, the undersigned hereby
agrees that:
(i) it will not assert against any of Borrower's assets
any statutory or possessory liens, including, without
limitation, rights of levy or distraint for rent, all of
which it hereby waives;
(ii) the Collateral shall be identifiable as being
owned by Borrower and kept reasonably separate and distinct
from other property in our possession;
(iii) none of the Collateral located on the Premises
shall be deemed to be fixtures;
(iv) if Borrower defaults on its obligations to the
Lenders or the Agent and, as a result, the Agent undertakes
to enforce its security interest in the Collateral, the
undersigned will cooperate with the Agent in its efforts to
assemble all of the Collateral located on the Premises and
will permit the Agent to either remain on the Premises for
ninety (90) days after the Agent declares
the default, or, at the Agent's option, to remove the
Collateral from the Premises within a reasonable time, not to
exceed ninety (90) days after the Agent declares the default,
provided that the Agent leaves the Premises in the same
condition as existed immediately prior to such ninety (90)
day period, and the Agent shall indemnify the undersigned for
any damages arising out of its occupancy of the Premises, and
will not hinder the Agent's actions in enforcing its liens on
the Collateral.
Any notice(s) required or desired to be given hereunder
shall be directed to the party to be notified at the address
stated herein.
The agreements contained herein shall continue in force
until all of Borrower's obligations and liabilities to the Agent
and Lenders are paid and satisfied in full and all financing
arrangements among the Agent, the Lenders and Borrower have been
terminated.
The undersigned will notify all successor owners,
transferees, purchasers and mortgagees of the existence of this
agreement. The agreements contained herein may not be modified or
terminated orally and shall be binding upon the successors,
assigns and personal representatives of the undersigned, upon any
successor owner or transferee of any of the Premises, and upon any
purchasers, including any mortgagee, from the undersigned.
Executed and delivered this ____ day of __________,
199_, at _______________________.
[Name and Address of Bailee]
(By)
-----------------------
-2-
SCHEDULE I
TO
AMENDED AND RESTATED SECURITY AGREEMENT
[Reserved]
-3-
SCHEDULE 2-A
TO
AMENDED AND RESTATED SECURITY AGREEMENT
THIRD PARTY LOCATIONS:
Corporate Name of Description
THIRD PARTY ADDRESS OF RELATIONSHIP
-4-
SCHEDULE 2-B
TO
AMENDED AND RESTATED SECURITY AGREEMENT
JURISDICTIONS IN WHICH COLLATERAL IS LOCATED:
State of Arizona
State of Connecticut
State of Illinois
State of Indiana
Xxxxx County
Xxxxxxxxxxx County
Xxxxxxxx County
Xxxxxxx County
Lake County
XxXxxxx County
Xxxxxx County
Monroe County
St. Xxxxxx County
Tippecanoe County
Vigo County
State of Iowa
State of Kentucky
State of Maine
State of Maryland
Xxxxxxx County
Xxxxxxxxxx County
State of Massachusetts
Town of Auburn
Town of Braintree
Town of Brockton
Town of Boston
Town of Burlington
Town of Cambridge
Town of Canton
Town of Chicopee
Town of Danvers
Town of Dedham
Town of Framingham
Town of Hanover
Town of Medford
Town of Plymouth
Town of North Attleboro
Town of Watertown
State of Michigan
State of Minnesota
State of Missouri
St. Xxxxxxx County
St. Louis County
St. Louis, Independent City
State of New Hampshire
Town of Bedford
Town of Manchester
Town of Nashua
Town of Newington
Town of North Xxxxxx
State of New Jersey
State of New York
Albany County
Xxxxxx County
Cayuga County
Chemung County
Erie County
Monroe County
New York County
Niagara County
Oneida County
Onondaga County
Ontario County
Queens County
Rockland County
Saratoga County
Schenectady County
Suffolk County
Xxxxxx County
State of North Dakota
- 2 -
State of Ohio
Cuyahoga County
Erie County
Lake County
Xxxxx County
State of Pennsylvania
Allegheny County
Bucks County
Xxxxxxx County
Delaware County
Xxxxxxxxxx County
Philadephia County
State of Rhode Island
State of South Dakota
State of Tennessee
State of Virginia
Fairfax County
Fairfax, Independent City
Waynesboro, Independent City
State of Wisconsin
- 3 -
SCHEDULE 3
TO
AMENDED AND RESTATED SECURITY AGREEMENT
TRADE NAMES:
