EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT dated as of April
30, 1997, as amended and restated as of September 21, 1998, among BRYLANE, L.P.,
a Delaware limited partnership (the "Borrower"), the subsidiaries of the
Borrower listed on Schedule I hereto and such other subsidiaries of the Borrower
as shall become parties hereto pursuant to Section 6.16 hereof (collectively,
the "Subsidiary Grantors"; the Borrower and the Subsidiary Grantors being
collectively called the "Grantors"); and CREDIT LYONNAIS NEW YORK BRANCH, as
security agent (in such capacity, the "Security Agent") for the Secured
Parties, as defined herein.
Reference is made to the Credit Agreement dated as of April 30, 1997,
as amended and restated as of September 21, 1998 (as amended from time to time,
the "Credit Agreement"), among the Borrower, the lenders party thereto (the
"Lenders") and Credit Lyonnais New York Branch, as administrative agent (in such
capacity, the "Administrative Agent"). Reference also is made to the Security
Agreement dated as of April 30, 1997 (the "Existing Security Agreement"), among
the Borrower, the Subsidiary Guarantors and Xxxxxx Guaranty Trust Company of New
York, as security agent, and, upon the effectiveness hereof, this Agreement
shall amend and restate the Existing Security Agreement and shall maintain the
Security Interest (as herein defined) created under the Security Agreement. The
Lenders have agreed to extend credit to the Borrower pursuant to, and subject to
the terms and conditions specified in, the Credit Agreement. The obligations
of the Lenders to extend credit under the Credit Agreement are conditioned
upon, among other things, the execution and delivery by the Grantors of a
security agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and interest on the Loans, when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (ii) each payment required to be made by the Borrower
under the Credit Agreement in respect of any Letter or Letters of Credit, when
and as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral, (iii) all other
monetary obligations of the Borrower to the Secured Parties under the Credit
Agreement and the other Loan Documents to which the Borrower is or is to be a
party, and (iv) each payment required to be made by the Borrower under any Rate
Protection Agreement entered into by the Borrower with a counterparty that was a
Lender at the time such Rate Protection Agreement was entered into, (b) the due
and punctual performance of all other obligations of the Borrower under the
Credit Agreement and the other Loan Documents to which the Borrower is or is to
be a party, and (c) the due and punctual payment and performance of all
obligations of each Subsidiary under the Loan Documents to which it is or is to
be a party (all the foregoing obligations being collectively called the
"Obligations").
Accordingly, the Grantors and the Security Agent hereby agree as
follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Terms Defined in the Credit Agreement. Terms used
herein and not otherwise defined herein shall have the meanings set forth in the
Credit Agreement.
SECTION 1.02. Definition of Certain Terms Used Herein. As used
herein, the following terms shall have the following meanings:
"Collateral" shall mean all (i) Documents, (ii) General Intangibles
and (iii) Proceeds.
PAGE
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Grantor: (i) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (ii) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger sheets
and documents covering or relating to any of the Collateral.
"General Intangibles" shall mean all choses in action and causes of
action and all other assignable intangible personal property of any Grantor of
every kind and nature (other than accounts receivable) now owned or hereafter
acquired by any Grantor, including corporate or other business records,
mailing/customer lists, contract rights (including rights under leases, whether
entered into as lessor or lessee, Rate Protection Agreements, the Trademark
Agreements, the Transaction Agreement, the Asset Purchase Agreements and other
agreements), Intellectual Property, Partnership Interests, goodwill,
registrations, franchises and tax refund claims.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including Copyrights, Licenses, Trademarks, trade secrets,
confidential or proprietary technical and business information, know-how,
show-how or other data or information, software and databases and all
embodiments or fixations thereof and related documentation, registrations and
franchises, and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.
"License" shall mean any Trademark License, Copyright License or
other license or sublicense to which any Grantor is a party, including those
listed on Schedule III.
"Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.
"Partnership Interests" shall mean any interest of any Grantor in any
general or limited partnership, whether as a general partner or limited partner,
and all rights of such Grantor in respect thereof, including any and all such
interests and rights of any Grantor as a partner in any Subsidiary that is a
partnership.
"Perfection Certificate" means a certificate substantially in the form
of Exhibit H to the Credit Agreement, completed and supplemented with the
schedules and attachments contemplated thereby, and duly executed by a financial
officer of the Borrower.
PAGE
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property which
constitutes Collateral, any value received as a consequence of the possession of
any Collateral (it being understood that "Proceeds" shall not include inventory
or other tangible personal property or any revenues generated by the Grantors in
the ordinary course of their respective businesses using trademarks and
tradenames constituting Collateral) and any payment received from any insurer or
other person or entity as a result of the destruction, loss, theft, damage or
other involuntary conversion of whatever nature of any asset or property which
constitutes Collateral, and shall include any claim of any Grantor against any
third party for (and the right to xxx and recover for and the rights to damages
or profits due or accrued arising out of or in connection with) (i) past,
present or future infringement or dilution of any Trademark now or hereafter
owned by any Grantor or licensed under a Trademark License or injury to the
goodwill associated with or symbolized by any Trademark now or hereafter owned
by any Grantor, (ii) past, present or future breach of any License, (iii) past,
present or future infringement of any Copyright now or hereafter owned by any
Grantor or licensed under a Copyright License, and (iv) any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral.
"Secured Parties" shall mean (a) the Lenders party to the Credit
Agreement, (b) each counterparty to a Rate Protection Agreement entered into
with the Borrower, if such counterparty was a Lender at the time such Rate
Protection Agreement was entered into, (c) the Agent, the Security Agent, and
the Issuing Banks, in their capacities as such under each Loan Document, (d) the
beneficiaries of each indemnification obligation undertaken by any Grantor under
any Loan Document, and (e) the successors and assigns of the foregoing.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Trademark License" shall mean any written agreement (including the
Trademark Agreements), now or hereafter in effect, (a) granting to any third
party any right to use any Trademark now or hereafter owned by any Grantor or
which such Grantor otherwise has the right to license, and all rights of such
Grantor under any such agreement, or (b) granting to such Grantor any right to
use any Trademark now or hereafter owned by any third party, and all rights of
such Grantor under any such agreement.
PAGE
"Trademarks" shall mean all of the following now owned or hereafter
acquired (including acquisition of rights in respect thereof pursuant to a
Trademark License) by any Grantor: (i) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule IV, (ii) all goodwill
associated therewith or symbolized thereby, and (iii) all other assets, rights
and interests that uniquely reflect or embody such goodwill.
ARTICLE II. SECURITY INTEREST
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Security Agent, its successors and its assigns, for the
benefit of the Secured Parties, and hereby grants to the Security Agent, its
successors and assigns, for the benefit of the Secured Parties, a security
interest in, all of such Grantor's right, title and interest in, to and under
the Collateral (the "Security Interest"). Without limiting the generality of
the foregoing, the Borrower hereby assigns, as collateral security, to the
Security Agent all its right, title and interest in, to and under the Trademark
Agreements and the Transaction Agreement (which assignment also shall constitute
part of the Security Interest). The Security Agent is hereby authorized to
file one or more financing statements, continuation statements, filings with
the United States Patent and Trademark Office or United States Copyright Office
(or any successor office or any similar office in any other country) or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, naming any Grantor or the Grantors as debtors and the Security
Agent as secured party.
Anything in this Section 2.01 to the contrary notwithstanding, no
Grantor shall be deemed to have borrowed, sold, conveyed, assigned, set over,
mortgaged, pledged, hypothecated or transferred, or to have granted a security
interest in, any contract right (including any lease), or in any of such
Grantor's right, title or interest therein, thereto or thereunder, if any such
action, without the consent of a third party thereto, would constitute a breach
or other contravention thereof; provided that the foregoing shall not apply to
the Trademark Agreements (except for the agreements referred to in clause (ii)
of the definition thereof), the Transaction Agreement or the partnership
agreement of any partnership that is a Subsidiary. The Grantors shall use their
best efforts, upon the request of the Security Agent, to obtain the consent of
any such third party required with respect to any contract right which is
material, individually or in the aggregate, to the business, condition or
prospects of any Grantor.
The Grantors agree at all times to keep accurate and complete
accounting records with respect to the Collateral, including a record of all
payments and Proceeds received.
SECTION 2.02. No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Security Agent or any Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of any of the Collateral.
PAGE
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the
Security Agent and the Lenders that:
SECTION 3.01. Title and Authority. Each of the Grantors has good and
valid rights in and title to the Collateral with respect to which it has
purported to grant a Security Interest hereunder (other than Trademarks which
are not, individually or in the aggregate, material to any Grantor's business,
condition or prospects) and has full power and authority to grant to the
Security Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been
duly prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements or other appropriate filings, recordings or registrations containing
a description of the Collateral have been delivered to the Security Agent for
filing in each governmental, municipal or other office specified in Schedule 5
to the Perfection Certificate, which are all the filings, recordings and
registrations (other than filings, required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in order to
perfect the Security Interest in Collateral consisting of United States
registered trademarks and registered copyrights) that are necessary to publish
notice of and protect the validity of and to maintain a legal, valid and
perfected security interest in favor of the Security Agent (for the benefit of
the Secured Parties) in respect of all Collateral in which the Security Interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration in
the United States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
(b) Each Grantor shall ensure and warrants that fully executed
security agreements in the form hereof and containing a description of all
Collateral consisting of Intellectual Property shall have been received and
delivered for recording within one month after the execution of this Agreement
with respect to United States registered Trademarks (and Trademarks for which
United States registration applications are pending) and within one month after
the execution of this Agreement with respect to United States registered
Copyrights by the United States Patent and Trademark Office and the United
States Copyright Office pursuant to 15 U.S.C. 1060 or 17 U.S.C. 205 and the
regulations thereunder, as applicable, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Security Agent (for the benefit of the Secured Parties) in respect of all
Collateral consisting of Licenses, Trademarks and Copyrights in which a security
interest may be perfected by filing, recording or registration in the United
States (or any political subdivision thereof) and its territories and
possessions, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary (other than such
actions as are necessary to perfect the Security Interest with respect to any
Collateral consisting of Licenses, Trademarks and Copyrights (or registration
or application for registration thereof) acquired or developed after the date
hereof).
PAGE
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02 above, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other applicable law in such jurisdictions,
and (c) a security interest that shall continue to be perfected in all
Collateral in which a security interest may be perfected upon the receipt and
recording of this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, within the one-month
period (commencing as of the date hereof) pursuant to 15 U.S.C. 1060 or the
one-month period (commencing as of the date hereof) pursuant to 17 U.S.C. 205.
The Security Interest is and shall be prior to any other Lien on any of the
Collateral, other than Liens that the Credit Agreement expressly permits to be
prior to the Security Interest.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted by the
Credit Agreement. Other than as contemplated hereby, none of the Grantors has
filed or consented to the filing of (a) any financing statement or analogous
document under the Uniform Commercial Code or any other applicable laws covering
any Collateral, (b) any assignment in which any Grantor assigns any Collateral
or any security agreement or similar instrument covering any Collateral with
the United States Patent and Trademark Office or the United States Copyright
Office or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office.
ARTICLE IV. COVENANTS
SECTION 4.01. Change of Name; Location of Collateral; Records; Place
of Business. (a) Each of the Grantors agrees promptly to notify the Security
Agent of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility) or
(iii) in its identity or corporate structure.
SECTION 4.02. Periodic Certification. Within 45 days after the
Amendment Effective Date, the Borrower shall deliver to the Security Agent a
certificate executed by a financial officer and the chief legal officer of the
Borrower setting forth, with respect to each filing, recording or registration
contemplated by Section 3.02, the filing office, date and file number thereof
and attaching true, correct and complete acknowledgment copies of each such
filing, recording or registration. Each year, at the time of delivery of annual
financial statements with respect to the preceding fiscal year pursuant to
Section 5.01 of the Credit Agreement, the Borrower shall deliver to the Security
Agent a certificate executed by a financial officer and the chief legal officer
of the Borrower (a) setting forth the information with respect to the Grantors
required pursuant to Section 2 of the Perfection Certificate, (b) certifying
that all Uniform Commercial Code financing statements or other appropriate
filings, recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (a) above to the extent necessary to
protect and perfect the Security Interest for a period of not less than 18
months after the date of such certificate, (c) setting forth, with respect to
each filing, recording or registration (including each refiling, rerecording or
reregistration) made since the date of the Perfection Certificate or the most
recent certificate delivered pursuant to this Section, the filing office, date
and file number thereof, and (d) attaching true, correct and complete
acknowledgment copies of each such filing, recording or registration not
theretofore delivered to the Security Agent.
PAGE
SECTION 4.03. Protection of Security. Each of the Grantors shall, at
its own cost and expense, take any and all actions necessary to defend title to
the Collateral against all persons and to defend the Security Interest of the
Security Agent in the Collateral and the priority thereof against any Lien not
expressly permitted under the Credit Agreement.
SECTION 4.04. Further Assurances. Each of the Grantors agrees, at
its expense, to execute, acknowledge, deliver and cause to be duly filed all
such further instruments and documents and take all such actions as the
Security Agent or any of the Lenders may from time to time request to better
assure, preserve, protect and perfect the Security Interest and the rights and
remedies created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements or other
documents in connection herewith. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument, such note or instrument shall be immediately pledged and
delivered to the Security Agent, duly endorsed in a manner satisfactory to the
Security Agent.
Without limiting the generality of the foregoing, each Grantor hereby
agrees, promptly upon receipt of notice from the Security Agent, to supplement
this Agreement by supplementing Schedule I, II or III hereto or adding
additional schedules hereto to specifically identify any asset or item that
constitutes Copyrights, Licenses, or Trademarks. Each Grantor agrees that it
will use its best efforts to take such action as shall be necessary in order
that all representations and warranties hereunder shall be true and correct with
respect to such Collateral within 30 days after the date it has been notified
by the Security Agent of the specific identification of such Collateral.
SECTION 4.05. Taxes; Encumbrances. At its option, the Security Agent
may discharge past due taxes, assessments, charges, fees, liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted under the Credit Agreement, and may pay for the maintenance
and preservation of the Collateral to the extent any of the Grantors fails to
do so as required by the Credit Agreement or this Agreement, and each of the
Grantors jointly and severally agrees to reimburse the Security Agent on demand
for any payment made or any expense incurred by the Security Agent pursuant to
the foregoing authorization; provided, however, that nothing in this Section
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Security Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the Credit Agreement.
SECTION 4.06. Continuing Obligations of the Grantors. Each of the
Grantors shall remain liable to observe and perform all the conditions and
obligations to be observed and performed by it under each contract, agreement or
instrument relating to the Collateral, all in accordance with the terms and
conditions thereof, and the Grantors jointly and severally agree to indemnify
and hold harmless the Security Agent and the Secured Parties from and against
any and all liability for such performance.
SECTION 4.07. Use and Disposition of Collateral. None of the
Grantors shall make or permit to be made an assignment, pledge or hypothecation
of the Collateral or shall grant any other Lien in respect of the Collateral
except as expressly permitted by the Credit Agreement. None of the Grantors
shall make or permit to be made any transfer of the Collateral and each
Grantor shall remain at all times in possession of the Collateral owned by it,
except that unless and until the Security Agent shall notify the Grantors that
an Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign, transfer
or otherwise dispose of any Collateral (which notice may be given by telephone
if promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document.
PAGE
SECTION 4.08. Covenants Regarding License, Trademark and Copyright
Collateral. (a) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(b) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
(c) Each Grantor shall notify the Security Agent immediately if it
knows or has reason to know that any Trademark or Copyright material to the
conduct of its business may become abandoned, lost or dedicated to the public,
or of any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, United States Copyright Office or any court or
similar office of any country) regarding such Grantor's ownership of any
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.
(d) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly (or, in
the case of Trademarks and Copyrights which are not, individually or in the
aggregate, material to any Grantor's business, condition or prospects, no less
frequently than on a quarterly basis) informs the Security Agent, and, upon
request of the Security Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Security Agent may request to evidence
the Security Agent's security interest in such Trademark or Copyright, and each
Grantor hereby appoints the Security Agent as its attorney-in-fact to execute
and file such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest,
is irrevocable.
(e) Each Grantor will take all reasonably necessary steps that are
consistent with the practice in any proceeding before the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each registration of the Trademarks and
Copyrights which is material to the conduct of any Grantor's business, including
timely filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if consistent with good
business judgment, to initiate opposition, interference and cancelation
proceedings against third parties.
(f) In the event that any Collateral consisting of a Trademark or
Copyright material to the conduct of any Grantor's business is believed
infringed, misappropriated or diluted by a third party, such Grantor promptly
shall notify the Security Agent after it obtains knowledge thereof and shall, if
consistent with good business judgment, promptly xxx for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution (or, in the event any third party is
contractually entitled to maintain any such suit, such Grantor shall pursue all
its available remedies, including, if applicable, by demanding such third party
to commence such suit and pursue such recovery), and take such other actions as
are appropriate under the circumstances to protect such Collateral.
PAGE
(g) Each Grantor shall use its best efforts to obtain all requisite
consents or approvals by the licensor of each Copyright License or Trademark
License to effect the assignment of all of the Grantors' right, title and
interest thereunder to the Security Agent or its designee.
ARTICLE V. REMEDIES
SECTION 5.01. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default, each of the Grantors agrees to deliver
each item of Collateral to the Security Agent on demand, and it is agreed that
the Security Agent shall have the right (subject to applicable law) to take any
of or all the following actions at the same or different times: on demand, to
cause the Security Interest to become an assignment, transfer and conveyance of
any of or all such Collateral by the applicable Grantors to the Security Agent,
or to license or, to the extent permitted by applicable law, sublicense, whether
general, special or otherwise, and whether on an exclusive or non-exclusive
basis, any such Collateral throughout the world on such terms and conditions and
in such manner as the Security Agent shall determine (other than in violation of
the Trademark Agreements or any other then-existing licensing arrangements to
the extent that waivers have not been obtained in the Trademark Collateral
Agreement or cannot otherwise be obtained), and with or without legal process
and with or without previous notice or demand for performance, to exercise any
and all rights afforded to a secured party under the Uniform Commercial Code or
other applicable law. Without limiting the generality of the foregoing, each of
the Grantors agrees that the Security Agent shall have the right, subject to the
mandatory requirements of current law, to sell, assign or otherwise dispose of
all or any part of the Collateral, at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Security Agent shall deem appropriate. The Security Agent shall
be authorized at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to persons who will represent and agree
that they are purchasing the Collateral for their own account for investment
and not with a view to the distribution or sale thereof, and upon consummation
of any such sale the Security Agent shall have the right to assign, transfer
and deliver to the purchaser or purchasers thereof the Collateral so sold.
Each such purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of any of the Grantors, and each of the
Grantors hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
The Security Agent shall give the Grantors 10 days' written notice
(which each of the Grantors agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of
New York or its equivalent in other jurisdictions) of the Security Agent's
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Security Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Security Agent may (in its sole and absolute discretion)
determine. The Security Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Security Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Security Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Security Agent shall not incur any
PAGE
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public sale made pursuant to this
Section, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any of the Grantors (all said rights being also hereby waived and
released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to such Secured Party from any of the Grantors as a credit
against the purchase price, and such Secured Party may, upon compliance with
the terms of sale, hold, retain and dispose of such property without further
accountability to any of the Grantors therefor. For purposes hereof, a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Security Agent shall be free to carry out such sale pursuant
to such agreement and none of the Grantors shall be entitled to the return of
the Collateral or any portion thereof subject thereto, notwithstanding the fact
that after the Security Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations paid in full. As
an alternative to exercising the power of sale herein conferred upon it, the
Security Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 5.02. Application of Proceeds. The Security Agent shall
apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the Agent
or the Security Agent (in its capacity as such hereunder or under any other Loan
Document) in connection with such collection or sale or otherwise in connection
with this Agreement or any of the Obligations, including all court costs and
the fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Security Agent hereunder or under any other Loan Document
on behalf of any of the Grantors and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder or under any other
Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such
distribution); and
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Security Agent shall have absolute discretion as to the time of application
of any such proceeds, moneys or balances in accordance with this Agreement.
Upon any sale of the Collateral by the Security Agent (including pursuant to a
power of sale granted by statute or under a judicial proceeding), the receipt of
the Security Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Security Agent or such officer or be
answerable in any way for the misapplication thereof.
SECTION 5.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Security Agent to exercise rights and remedies under
this Article at such time as the Security Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Security
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof (other than in violation of any Trademark Agreements or any other
then-existing licensing arrangements to the extent that waivers have not been
obtained in the Trademark Collateral Agreement or cannot otherwise be obtained).
The use of such license by the Security Agent shall be exercised, at the option
of the Security Agent, upon the occurrence and during the continuation of an
Event of Default; provided that any license, sub-license or other transaction
entered into by the Security Agent in accordance herewith shall be binding upon
the Grantors notwithstanding any subsequent cure of an Event of Default.
ARTICLE VI. MISCELLANEOUS
SECTION 6.01. Notices. All communications and notices hereunder
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in Section 9.01 of the Credit Agreement. All communications and
notices hereunder to any Subsidiary Grantor shall be given to it in care of the
Borrower at the address specified in the Credit Agreement for notices to the
Borrower thereunder.
SECTION 6.02. Security Interest Absolute. All rights of the Security
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement or any other Loan Document,
any agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing; (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or instrument;
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations; or (d) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 6.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans, and the execution and delivery to the Lenders of the Notes
evidencing such Loans, regardless of any investigation made by the Lenders or on
their behalf, and shall continue in full force and effect until this Agreement
shall terminate.
SECTION 6.04. Binding Effect; Several Agreement. This Agreement
shall become effective as to any Grantor when a counterpart hereof executed on
behalf of such Grantor shall have been delivered to the Security Agent and a
counterpart hereof shall have been executed on behalf of the Security Agent, and
thereafter shall be binding upon such Grantor and the Security Agent and their
respective successors and assigns, and shall inure to the benefit of such
Grantor, the Security Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign
its rights hereunder or any interest herein or in the Collateral except as
expressly contemplated by this Agreement or the Credit Agreement. This
Agreement shall be construed as a separate agreement with respect to each
Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.
SECTION 6.05. Successors and Assigns. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Security Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 6.06. Security Agent Appointed Attorney-in-Fact. Each of the
Grantors hereby appoints the Security Agent the attorney-in-fact of such
Grantor for the purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument which the Security Agent may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, the Security Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Security Agent's name or in the name of any Grantor, to ask for,
demand, xxx for, collect, receive and give acquittance for any and all moneys
due or to become due under and by virtue of any Collateral, to endorse checks,
drafts, orders and other instruments for the payment of money payable to such
Grantor representing any dividend or other distribution payable in respect of
the Collateral or any part thereof or on account thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Security Agent to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Security Agent,
or to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby, and no action taken by the Security
Agent or omitted to be taken with respect to the Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of any Grantor
or to any claim or action against the Security Agent or any other Secured Party.
SECTION 6.07. Security Agent's Fees and Expenses; Indemnification.
(a) Each of the Grantors jointly and severally agrees to pay upon demand to the
Security Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts or agents, which
the Security Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the Collateral, (iii) the exercise, enforcement
or protection of any of the rights of the Security Agent hereunder or (iv) the
failure of the Grantors to perform or observe any of the provisions hereof.
(b) Without limitation of their indemnification obligations under the
other Loan Documents, each of the Pledgors jointly and severally agrees to
indemnify the Security Agent from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by the
Security Agent in connection with any investigative, administrative or judicial
proceeding relating hereto or to the Collateral, whether or not the Security
Agent is a party thereto; provided that the Security Agent shall not have the
right to be indemnified hereunder for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
(c) Any such amounts payable as provided hereunder shall be
additional Obligations secured hereby and by the other Security Documents.
The provisions of this Section shall remain operative and in full force and
effect regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Security
Agent or any Lender. All amounts due under this Section shall be payable on
written demand therefor.
SECTION 6.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.09. Waivers; Amendment. (a) No failure or delay of the
Security Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Security Agent hereunder
and of the Security Agent, the Agent and the Lenders under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies which
they would otherwise have. No waiver of any provisions of this Agreement or any
other Loan Document or consent to any departure by any Grantor therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on any
Grantor in any case shall entitle such Grantor or any other Grantor to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Security Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.05 of the Credit Agreement.
SECTION 6.10. Waiver of Jury Trial. Each of the parties hereto
irrevocably waives any and all rights to trial by jury in any legal proceeding
arising out of or relating to this Agreement or any other Loan Document or the
transactions contemplated hereby.
SECTION 6.11. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 6.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 6.04),
and shall become effective as provided in Section 6.04.
SECTION 6.13. Headings. Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 6.14. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Security Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against any
Grantor or its properties in the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 6.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 6.15. Termination. This Agreement and the Security Interest
shall terminate when all the Obligations (other than obligations of the Borrower
under Section 9.03(b) of the Credit Agreement, or any other indemnification
provisions contained in the Loan Documents, in respect of claims which have not
then been asserted) have been indefeasibly paid in full and the Lenders have no
further commitment to lend or to issue Letters of Credit under the Credit
Agreement, at which time the Security Agent shall execute and deliver to the
Grantors, at the Grantors' expense, all Uniform Commercial Code termination
statements and similar customary documents which the Grantors shall reasonably
request to evidence such termination. Any execution and delivery of termination
statements or documents pursuant to this Section shall be without recourse to or
warranty by the Security Agent. Each Subsidiary Grantor shall automatically be
released from its obligations hereunder and the Security Interest in the
Collateral of such Subsidiary Grantor shall be automatically released in the
event that all the capital stock of such Subsidiary Grantor shall be sold,
transferred or otherwise disposed of to a person that is not an Affiliate of the
Borrower in accordance with the terms of the Credit Agreement; provided that the
Required Lenders shall have consented to such sale, transfer or other
disposition and the terms of such consent did not provide otherwise.
SECTION 6.16. Additional Grantors. Upon execution and delivery by
the Security Agent and a Subsidiary of an instrument in the form of Annex 1
hereto, such Subsidiary shall become a Subsidiary Grantor and Grantor hereunder
with the same force and effect as if originally named as a Subsidiary Grantor
and Grantor herein.
PAGE
The execution and delivery of any such instrument shall not require the consent
of any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BRYLANE, L.P,
by VGP CORPORATION, General Partner
by
Name:
Title:
X.X. CATALOG DISTRIBUTION, INC.,
by
Name:
Title:
BRYLANE CAPTIAL CORP.,
by
Name:
Title:
PAGE
X.X. CATALOG DISTRIBUTION, PARTNERSHIP,
by X.X. CATALOG DISTRIBUTION, INC., General Partner,
by
Name:
Title:
by BRYLANE, L.P., General Partner
by VGP CORPORATION, General
Partner
by
Name:
Title:
X.X. MANAGEMENT SERVICES, INC.,
by
Name:
Title:
PAGE
X.X. MANAGEMENT SERVICES PARTNERSHIP,
by X.X. MANAGEMENT SERVICES, INC.,
General Partner,
by
Name:
Title:
by B.N.Y. SERVICE CORP., General
Partner,
by
Name:
Title:
B.N.Y. SERVICE CORP.
by
Name:
Title:
K.S. MANAGEMENT SERVICES, INC.
by
Name:
Title:
PAGE
C.O.B. MANAGEMENT SERVICES, INC.
by
Name:
Title:
XXXXXXXX'X TRADENAME SUB, INC.
by
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
as Security Agent,
by
Name:
Title:
by
Name:
Title:
PAGE
Schedule I
Subsidiary Grantors
1. X.X. Management Services, Inc., a Delaware corporation.
2. B.N.Y. Service Corp., a Delaware corporation.
3. X.X. Catalog Distribution, Inc., a Delaware corporation.
4. X.X. Management Services Partnership, a New York general partnership.
5. X.X. Catalog Distribution Partnership, an Indiana general partnership.
6. K.S. Management Services, Inc., a Delaware corporation.
7. C.O.B. Management Services, Inc., a Delaware corporation.
8. Xxxxxxxx'x Tradename Sub, Inc., a Delaware corporation.
PAGE
Schedule II
Copyrights
PAGE
Schedule III
Licenses
PAGE
Schedule IV
Trademarks
PAGE
Annex 1 to the
Security Agreement
SUPPLEMENT NO. __ dated as of , to the Security Agreement dated
as of April 30, 1997, as amended and restated as of September 21, 1998, among
BRYLANE, L.P., a Delaware limited partnership (the "Borrower"), the subsidiaries
of the Borrower listed on Schedule I thereto and such other subsidiaries of the
Borrower as shall become parties thereto pursuant to Section 6.16 thereof
(collectively, the "Subsidiary Guarantors"; the Borrower and the Subsidiary
Guarantors being collectively called the "Grantors") and Credit Lyonnais New
York Branch ("Credit Lyonnais"), as security agent (in such capacity, the
"Security Agent") for the Secured Parties (as defined herein).
A. Reference is made to (a) the Credit Agreement dated as of
September 30, 1997, as amended and restated as of September 21, 1998 (as
amended, supplemented or otherwise modified from time to time, the Credit
Agreement), among the Borrower, the lenders from time to time party thereto (the
Lenders) and Credit Lyonnais New York Branch, as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders, and (b) the Guarantee
Agreement dated as of April 30, 1997, as amended and restated as of September
21, 1998 (as amended, supplemented or otherwise modified from time to time, the
Guarantee Agreement), among the Borrower, the Guarantors (as defined therein)
and the Administrative Agent.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement and
the Credit Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 6.16 of the Security Agreement provides that additional
Subsidiaries of the Borrower may become Grantors under the Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Grantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Grantor
under the Security Agreement in order to induce the Lenders to make additional
Loans and the Issuing Bank to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.
Accordingly, the Security Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 6.16 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Grantor, as security for the payment and
performance in full of the Obligations (as defined in the Security Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Grantor's right, title and
interest in and to the Collateral (as defined in the Security Agreement) of the
New Grantor. Each reference to a "Grantor" in the Security Agreement shall be
deemed to include the New Grantor. The Security Agreement is hereby
incorporated herein by reference.
PAGE
SECTION 2. The New Grantor represents and warrants to the Security
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Security Agent
shall have received counterparts of this Supplement that, when taken together,
bear the signatures of the New Grantor and the Security Agent. Delivery of an
executed signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a)
set forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 6.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below.
PAGE
SECTION 9. The New Grantor agrees to reimburse the Security Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Security Agent.
IN WITNESS WHEREOF, the New Grantor and the Security Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[Name of New Grantor],
by
Name:
Title:
Address:
CREDIT LYONNAIS NEW YORK BRANCH, as Security Agent,
by
Name:
Title:
by
Name:
Title:
