EXECUTION COPY
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Security Agreement"), dated as of January 28,
1999, by and among BARNEYS (CA) LEASE CORP. (with its successors and permitted
assigns, the "Grantor"), and CITICORP USA, INC., in its capacity as
administrative agent (with its successors in such capacity, the "Administrative
Agent") for the Lenders (as defined below) and the Issuing Banks (as defined
below) under that certain Credit Agreement dated as of January 28, 1999 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Barney's, Inc., Barneys America, Inc., PFP Fashions
Inc., Barneys (CA) Lease Corp., Barneys (NY) Lease Corp., Xxxxx All-American
Sportswear Corp., BNY Licensing Corp., and Barneys America (Chicago) Lease Corp.
(collectively, the "Borrowers"), the Administrative Agent, the lenders from time
to time a party thereto (the "Lenders"), the issuing banks from time to time a
party thereto (the "Issuing Banks") and General Electric Capital Corporation, in
its capacity as documentation agent (in such capacity, the "Documentation
Agent") . Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed to such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Grantor is a party to the Credit Agreement,
pursuant to which the Lenders and the Issuing Banks have agreed, subject to
certain conditions precedent, to make certain loans and other financial
accommodations to the Borrowers from time to time; and
WHEREAS, in order to secure the prompt and complete payment,
observance and performance of (i) all of the Obligations and (ii) all of the
Grantor's obligations and liabilities hereunder and in connection herewith (all
the Obligations and such obligations and liabilities hereunder being hereinafter
referred to collectively as the "Liabilities"), the Administrative Agent, the
Lenders and the Issuing Banks have required as a condition, among others, to
entering into the Credit Agreement that the Grantor execute and deliver this
Security Agreement;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINED TERMS.
(a) Unless otherwise defined herein, each capitalized term
used herein that is defined in the Credit Agreement shall have the meaning
specified for such term in the Credit Agreement. Unless otherwise defined herein
or in the Credit Agreement, all terms defined in Article 8 and Article 9 of the
Uniform Commercial Code in effect as of the date hereof in the State of New York
are used herein as defined therein.
(b) The words "hereby," "hereof," "herein" and "hereunder" and
words of like import when used in this Security Agreement shall refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement, and section references are to this Security Agreement unless
otherwise specified.
(c) All terms defined in this Security Agreement in the
singular shall have comparable meanings when used in the plural, and VICE VERSA,
unless otherwise specified.
2. GRANT OF SECURITY INTEREST. To secure the prompt and
complete payment, observance and performance of all the Liabilities, the Grantor
hereby grants (subject as set forth below) to the Administrative Agent for the
benefit of the Administrative Agent, the Lenders, the Issuing Banks and the
other Holders, a security interest in all of the Grantor's rights, title and
interests in and to the following property, whether now owned or existing or
hereafter arising or acquired and wheresoever located (the "Collateral"):
(a) ACCOUNTS: All present and future accounts, accounts
receivable and other rights of the Grantor to payment for the sale or lease of
goods or the rendition of services (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");
(b) EQUIPMENT: All of the Grantor's present and future (i)
equipment and fixtures, including, without limitation, wherever located,
printing presses and other machinery, manufacturing, distribution, selling, data
processing and office equipment, furniture, furnishings, assembly systems,
tools, tooling, molds, dies, appliances and vehicles, vessels and aircraft, (ii)
other tangible personal property (other than the Grantor's Inventory) and (iii)
any and all accessions, parts and appurtenances attached to any of the foregoing
or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof (collectively, "Equipment");
(c) GENERAL INTANGIBLES: All of the Grantor's present and
future general intangibles, choses in action, causes of action, and all other
intangible personal property of every kind and nature including, without
limitation, corporate, partnership and other business books and records,
interests in partnerships and limited liability companies that do not constitute
securities, inventions, designs, patents, patent applications, trademarks,
service marks, trademark applications, service xxxx applications, trade names,
trade secrets, goodwill, registrations, copyrights, licenses, franchises,
customer lists, computer programs, software and other computer materials, tax
refunds, tax refund claims, rights and claims against charters, carriers,
shippers, franchisees, lessors, and lessees, and rights to indemnification,
intercompany receivables, and any security documents executed in connection
therewith, deposit accounts, proceeds of any letters of credit, indemnity,
warranty or guaranty payable to the Grantor from time to time with respect to
the foregoing or proceeds of any insurance policies on which the Grantor is
named as
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beneficiary, claims against third parties for advances and other financial
accommodations and any other obligations whatsoever owing to the Grantor,
contract rights, customer and supplier contracts, rights in and to all security
agreements, security interests or other security held by the Grantor to secure
payment of the Grantor's accounts, all right, title and interest under leases,
subleases, and concessions and other agreements relating to personal property
(including, without limitation, all rents, issues and profits related thereto),
rights in and under guarantees, instruments, securities, documents of title and
other contracts securing, evidencing, supporting or otherwise relating to any of
the foregoing, together with all rights in any goods, merchandise or Inventory
(as defined below) which any of the foregoing may represent (collectively,
"General Intangibles");
(d) INVENTORY: All of the Grantor's present and future (i)
inventory, (ii) goods, merchandise and other personal property furnished or to
be furnished under any contract of service or intended for sale or lease, and
all goods consigned by the Grantor and all other items which have previously
constituted Equipment but are then currently being held for sale or lease in the
ordinary course of the Grantor's business, (iii) raw materials, work-in-process
and finished goods, (iv) materials, components and supplies of any kind, nature
or description used or consumed in the Grantor's business or in connection with
the manufacture, production, packing, shipping, advertising, finishing or sale
of any of the Property described in CLAUSES (I) through (III) above, (v) goods
in which the Grantor has a joint or other interest to the extent of the
Grantor's interest therein or right of any kind (including, without limitation,
goods in which the Grantor has an interest or right as consignee), and (vi)
goods which are returned to or repossessed by the Grantor; in each case whether
in the possession of the Grantor, a bailee, a consignee, or any other Person for
sale, storage, transit, processing, use or otherwise, and any and all documents
for or relating to any of the foregoing (collectively, "Inventory");
(e) CHATTEL PAPER, INSTRUMENTS AND DOCUMENTS: All chattel
paper, all instruments (as defined in Article 9 of the Uniform Commercial Code),
all bills of lading, warehouse receipts and other documents of title and
documents, in each instance whether now owned or hereafter acquired by the
Grantor (collectively, "Chattel Paper, Instruments and Documents");
(f) INVESTMENT PROPERTY: All investment property (as defined
in Article 9 of the Uniform Commercial Code) including, without limitation, all
securities (as defined in Article 8 of the Uniform Commercial Code), whether
certificated or uncertificated, security entitlements, securities accounts,
commodities contracts and commodity accounts (collectively, "Investment
Property");
(g) OTHER PROPERTY: All property or interests in property now
owned or hereafter acquired by the Grantor whether in the possession, custody or
control of the Administrative Agent, any Lender, any Issuing Bank or any other
Holder, or any agent or affiliate of any of them in any way or for any purpose
(whether for safekeeping, deposit, custody, pledge, transmission, collection or
otherwise), including, without limitation, (i) notes, drafts,
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letters of credit, stocks, bonds, and debt and equity securities, whether or not
certificated, and warrants, options, puts and calls and other rights to acquire
or otherwise relating to the same (in each case only to the extent not otherwise
constituting Investment Property); (ii) money; (iii) proceeds of loans,
including without limitation, all the Loans made to the Grantor under the Credit
Agreement; and (iv) insurance proceeds and books and records relating to any of
the property covered by this Agreement (collectively, "Other Property");
together with in respect to each of the items set forth in paragraphs (a)
through (g) above, all accessions and additions thereto, substitutions therefor,
and replacements, proceeds and products thereof. Notwithstanding anything to the
contrary in this Security Agreement, nothing herein or otherwise shall be deemed
or construed, directly or indirectly, as a grant by the Grantor to the
Administrative Agent, the Lenders, the Issuing Banks or the other Holders of a
Lien of any kind whatsoever on any "Collateral" (as defined in the (i) Security
Agreement dated as of the date hereof between the Grantor and BI-Equipment
Lessors LLC, (ii) the Security Agreement dated as of the date hereof between the
Grantor and Copelco Capital, Inc. and (iii) the Security Agreement dated as of
the date hereof between the Grantor and Xxxx Xxxxxxx Leasing Corporation)
subject to a Lien granted to any of the Equipment Lessors (as defined in the
Plan of Reorganization) pursuant to any of the Security Agreements referred to
immediately above as in effect on the date hereof.
This Security Agreement shall not create or be filed as a lien against the land,
building and/or improvements to the real property in which the goods, machinery,
equipment, appliances or other personal property covered hereby are to be
located or installed.
3. CONTINUING LIABILITY. The Grantor hereby expressly agrees
that, notwithstanding anything set forth herein to the contrary, the Grantor
shall remain solely responsible under each contract, agreement, interest or
obligation as to which a Lien has been granted to the Administrative Agent
hereunder for the observance and performance of all of the conditions and
obligations to be observed and performed by the Grantor thereunder, all in
accordance with and pursuant to the terms and provisions thereof, and the
exercise by the Administrative Agent, any Lender or any Issuing Bank of any
rights under this Security Agreement, the Credit Agreement or any other Loan
Document shall not release the Grantor from any of the Grantor's duties or
obligations hereunder and under each such contract, agreement, interest or
obligation. Neither the Administrative Agent nor any Lender or Issuing Bank
shall have any duty, responsibility, obligation or liability under any such
contract, agreement, interest or obligation by reason of or arising out of this
Security Agreement or the assignment thereof by the Grantor to the
Administrative Agent or the granting by the Grantor to the Administrative Agent
of a Lien thereon or the receipt by the Administrative Agent, any Lender or any
Issuing Bank of any payment relating to any such contract, agreement, interest
or obligation pursuant hereto, nor shall the Administrative Agent, any Lender or
any Issuing Bank be required or obligated (nor to the extent prohibited by the
terms of such contract, agreement, interest or obligation or applicable law,
rule or regulation, shall the Administrative Agent, Lender or Issuer be
permitted), in any manner, to (a) perform or fulfill any of the obligations of
the
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Grantor thereunder or pursuant thereto, (b) make any payment, or make any
inquiry as to the nature or the sufficiency of any payment received by the
Grantor or the sufficiency of any performance by any party under any such
contract, agreement, interest or obligation, or (c) present or file any claim,
or take any action to collect or enforce any performance or payment of any
amounts which may have been assigned to the Grantor, on which the Grantor has
been granted a Lien to which the Grantor may be entitled at any time or times.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Grantor
hereby represents, warrants and covenants that as of the date of the execution
of this Security Agreement, and until the termination of this Security Agreement
pursuant to SECTION 14 below:
(a) All of the Equipment and Inventory (other than Inventory
and Equipment sold in accordance with the terms of the Credit
Agreement, Equipment being repaired or serviced, Inventory in
transit or in the possession and control of subcontractors of the
Grantor or any other Person for processing and vehicles) are
located at the places specified in SCHEDULE 1 attached hereto as
amended from time to time pursuant to SECTION 5(B) below and such
location is an owned, leased or bailment location as specified in
SCHEDULE 1 attached hereto. As of the date hereof, the correct
corporate name, the principal place of business, the chief
executive office, and the federal tax identification number of
the Grantor and the places where the Grantor's books and records
concerning the Collateral are currently kept are set forth in
SCHEDULE 2 attached hereto and made a part hereof, and the
Grantor will not change such principal place of business or chief
executive office or remove such records without (i) providing the
Administrative Agent with at least thirty (30) days' prior
written notice of such change, and (ii) making all filings under
the Uniform Commercial Code necessary or appropriate to preserve
the perfection of the security interests described herein to the
extent such security interest may be perfected by such filings.
The Grantor will not change its name, identity or corporate
structure in any manner which might make any financing statement
filed hereunder misleading, UNLESS the Grantor shall have (A)
given the Administrative Agent at least thirty (30) days' prior
written notice thereof (and received any consent that may be
required under the terms of the Credit Agreement), and (B)
certified to the Administrative Agent that all filings reflecting
such new name, identity or structure have been made which are
necessary or appropriate to preserve the perfection of the
security interests described herein. The Grantor will hold and
preserve such records and chattel paper and will permit
representatives of the Administrative Agent, upon reasonable
notice and at times during normal business hours to inspect and
make abstracts from such records and chattel paper.
(b) The Grantor has exclusive possession and control of the
Equipment and Inventory except as permitted under the Credit
Agreement.
(c) The Grantor is the legal and beneficial owner of the
Collateral free and clear of all Liens, except as permitted under
SECTION 9.03 of the Credit Agreement. The
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Grantor has not, during the five (5) years preceding the date
hereof, been known as or used any other corporate or fictitious
name, except as disclosed on SCHEDULE 3 hereto, nor acquired all
or substantially all the assets, capital stock or operating unit
of any Person, except as disclosed on SCHEDULE 3 hereto and each
predecessor in interest of the Grantor during the five (5) years
preceding the Closing Date is disclosed on SCHEDULE 3 hereto.
(d) This Security Agreement creates in favor of the
Administrative Agent a legal, valid and enforceable security
interest in the Collateral, securing the payment of the
Liabilities. When financing statements have been filed in the
appropriate offices in the locations listed on SCHEDULES 1 AND 2
hereto, the Administrative Agent will have a fully perfected
first priority Lien on the Collateral to the extent such Lien may
be perfected by Uniform Commercial Code filings.
(e) No consent of any Person and no authorization, approval
or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other third party is
required either for (i) the perfection or maintenance of the
security interest created hereby, except for the Uniform
Commercial Code filings referred to in clause (d) (and except for
the filings with the United States Patent and Trademark Office
and except for, in the case of motor vehicles, certificates of
title which have been issued, which note the Administrative
Agent's security interest) or (ii) for the exercise by the
Administrative Agent of its rights provided for in this Agreement
or the remedies in respect of the Collateral pursuant to this
Agreement.
(f) The Inventory produced by the Grantor has been produced
in compliance in all material respects with all requirements of
the Fair Labor Standards Act.
5. COVENANTS. The Grantor covenants and agrees with the
Administrative Agent that from and after the date of this Security Agreement and
until the termination of this Security Agreement pursuant to SECTION 14 below:
(a) At any time and from time to time, upon the
Administrative Agent's written request and at the expense of the
Grantor, the Grantor will promptly and duly execute and deliver
any and all such further instruments and documents and take such
further action as the Administrative Agent reasonably may deem
desirable in order to perfect and protect any Lien granted or
purported to be granted hereby or to enable the Administrative
Agent to exercise and enforce its rights and remedies hereunder
with respect to the Collateral. Without limiting the generality
of the foregoing, the Grantor will: (i) upon the occurrence and
during the continuance of an Event of Default, at the request of
the Administrative Agent, xxxx conspicuously each item of chattel
paper included in the Collateral and each related contract and
each of its records pertaining to the Collateral, with a legend,
in form and substance satisfactory to the Administrative Agent,
indicating that such document, chattel paper, related contract or
Collateral is subject to the security interest granted hereby;
(ii) if any Collateral shall be evidenced by
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a promissory note or other instrument (other than checks or
drafts received in the ordinary course of the Grantor's
business), deliver and pledge to the Administrative Agent
hereunder such note or instrument duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in
form and substance satisfactory to the Administrative Agent; and
(iii) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices as
the Administrative Agent may request, as may be necessary or
desirable, in order to perfect and preserve the security interest
granted or purported to be granted hereby. The Grantor hereby
authorizes the Administrative Agent to file any such financing or
continuation statements without the signature of the Grantor to
the extent permitted by applicable law. The Grantor hereby agrees
that a carbon, photographic, photostatic or other reproduction of
this Security Agreement or of a financing statement is sufficient
as a financing statement to the extent permitted by applicable
law.
(b) The Grantor shall keep the Equipment and Inventory
(other than Inventory and Equipment sold in accordance with the
terms of the Credit Agreement, Equipment being repaired or
serviced, Inventory in transit or in the possession and control
of subcontractors of the Grantor and vehicles) at the places
specified in SCHEDULE 1 hereto and deliver written notice to the
Administrative Agent at least 30 days prior to establishing any
other location at which it reasonably expects to maintain
Inventory and/or Equipment (it being understood and agreed that
all action required by SECTION 5(A) hereof shall have been taken
in the relevant jurisdiction with respect to all such Equipment
and/or Inventory prior to the establishment of any such
location). Upon the establishment of any such location, and after
notice thereof to the Administrative Agent as required in the
preceding sentence, SCHEDULE 1 hereto shall be deemed amended to
add such location thereto without further action by the
Administrative Agent or the Grantor and the Grantor hereby
authorizes the Administrative Agent to substitute a new SCHEDULE
1 hereto to reflect such additional location(s).
(c) The Grantor will keep and maintain at the Grantor's own
cost and expense satisfactory and complete records of the
Collateral in a manner reasonably acceptable to the
Administrative Agent, including, without limitation, a record of
all payments received and all credits granted with respect to
such Collateral and a record of the Administrative Agent's
security interest in the Collateral. Upon the occurrence and
during the continuance of an Event of Default, the Grantor shall,
for the Administrative Agent's further security, deliver and turn
over to the Administrative Agent or the Administrative Agent's
designated representatives at any time upon three (3) Business
Days' notice from the Administrative Agent or the Administrative
Agent's designated representative, copies of any such books and
records (including, without limitation, any and all computer
tapes, programs and source codes relating to the Collateral or
any part or parts thereof).
(d) In any suit, proceeding or action brought by the
Administrative Agent under any Account comprising part of the
Collateral, the Grantor will save, indemnify
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and keep the Administrative Agent, each Lender and each Issuing
Bank harmless from and against all expense, loss or damages
suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by the Grantor of any
obligation or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such obligor or its
successors from the Grantor, and all such obligations of the
Grantor shall be and shall remain enforceable against and only
against the Grantor and shall not be enforceable against the
Administrative Agent, any Lender or any Issuing Bank; PROVIDED,
HOWEVER, the Grantor shall have no obligation to the
Administrative Agent with respect to the matters indemnified
pursuant to this subsection (d) resulting from the willful
misconduct or gross negligence of the Administrative Agent, any
Lender or an Issuing Bank as determined in a final non-appealable
judgment by a court of competent jurisdiction.
(e) The 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 9.03 of the Credit Agreement,
and will defend the right, title and interest of the
Administrative Agent in and to the Grantor's rights to such
Collateral, including, without limitation, the proceeds and
products thereof, against the claims and demands of all Persons
whatsoever other than claims secured by Liens permitted under
SECTION 9.03 of the Credit Agreement.
(f) Upon the occurrence and during the continuance of an
Event of Default, the Grantor will not, without the
Administrative Agent's prior written consent, except in the
ordinary course of business and for amounts which are not
material to the Barneys Group, taken as a whole in the aggregate,
(i) grant any extension of the time of payment of any of the
Collateral or compromise, compound or settle the same for less
than the full amount thereof; (ii) release, wholly or partly, any
Person liable for the payment thereof; or (iii) allow any credit
or discount whatsoever thereon other than trade discounts granted
in the ordinary course of business.
(g) The Grantor will advise the Administrative Agent
promptly, in reasonable detail, of (i) any material Lien or claim
made by or asserted against any or all of the Collateral, and
(ii) the occurrence of any other event which would have a
material adverse effect on the aggregate value of the Collateral
or on the Liens with respect to such Collateral created
hereunder.
6. COLLECTIONS. Except as otherwise provided in this SECTION
6, the Grantor shall continue to collect, at its own expense, all amounts due or
to become due to the Grantor under the Accounts. In connection with such
collections, the Grantor may take (and, after the occurrence and during the
continuation of an Event of Default, at the Administrative Agent's direction,
must take) such action as the Grantor or, after the occurrence and during the
continuation an Event of Default, the Administrative Agent may deem necessary or
advisable to enforce collection of the Accounts; PROVIDED, HOWEVER, that the
Administrative Agent shall have
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the right at any time, upon the occurrence and during the continuance of an
Event of Default, to require the Grantor to notify the account debtors or
obligors under any Accounts of the assignment of such Accounts to the
Administrative Agent and to direct such account debtors or obligors to make
payment of all amounts due or to become due to the Grantor thereunder directly
to the Administrative Agent and, upon such notification and at the expense of
the Grantor, to enforce collection of any such Accounts, and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same
extent as the Grantor might have done. After receipt by the Grantor of the
notice from the Administrative Agent referred to in the proviso to the preceding
sentence, all amounts and proceeds (including instruments) received by the
Grantor in respect of the Accounts shall be received in trust for the benefit of
the Administrative Agent, the Lenders, the Issuing Banks and the other Holders
hereunder, shall be segregated from other funds of the Grantor and shall be
forthwith paid over to the Administrative Agent in the same form as so received
(with any necessary endorsement) to be applied to the Obligations in accordance
with the Credit Agreement (including, without limitation, SECTION 3.02(B)(II)
thereof).
7. REMEDIES, APPLICATION OF PROCEEDS, RIGHTS UPON EVENT OF
DEFAULT.
(a) Upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent may exercise in respect of the Collateral,
in addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies provided for in the Credit
Agreement and all the rights and remedies of a secured party under the Uniform
Commercial Code, and all other applicable law as in effect in any relevant
jurisdiction. In addition, the Administrative Agent may also:
(i) require the Grantor to, and the Grantor hereby agrees
that it will at its expense and upon request of the
Administrative Agent, promptly assemble all, or such part, of the
Collateral as directed by the Administrative Agent and make such
Collateral available to the Administrative Agent at a place
designated by the Administrative Agent, which place shall be
reasonably convenient to the Administrative Agent, whether at the
premises of the Grantor or otherwise;
(ii) enter, with or without process of law and without
breach of the peace, any premises where any of the Collateral or
the books and records of the Grantor related thereto are or may
be located and, without charge or liability to the Administrative
Agent, seize and remove such Collateral and such books and
records from such premises, or remain upon such premises and use
the same for the purpose of enforcing any and all rights and
remedies of the Administrative Agent under this Security
Agreement, the Credit Agreement or any of the other Loan
Documents; and
(iii) without notice, except as specified below, sell,
lease, assign, grant an option or options to purchase or
otherwise dispose of all or any part of the Collateral in one or
more parcels, at public or private sale or sales, at any
exchange, broker's board or
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at any of the Administrative Agent's offices or elsewhere, at
such prices as the Administrative Agent may deem best, for cash,
on credit or for future delivery, and upon such other terms as
the Administrative Agent may deem commercially reasonable;
PROVIDED, HOWEVER, that the Grantor shall not be credited with
the net proceeds of any such credit sale, future delivery or
lease of the Collateral until the cash proceeds thereof are
actually received by the Administrative Agent. The Grantor agrees
that, to the extent notice of sale shall be required by law, at
least ten (10) Business Days' notice, or such longer period as
may be required by law, to the 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. No
notification required by law need be given to the Grantor if the
Grantor has signed, after the occurrence of an Event of Default,
a statement renouncing any right to notification of sale or other
intended disposition. The Administrative Agent shall not be
obligated to make any sale of any of the Collateral regardless of
notice of sale having been given. The Administrative 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. The Administrative Agent, any Lender
and any of the Issuing Banks shall have the right upon any such
public sale or sales and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of
redemption in the Grantor, which right or equity is hereby
expressly waived and released. In the event of a sale of any
Collateral, or any part thereof, to a Lender, an Issuing Bank, or
the Administrative Agent upon the occurrence and during the
continuance of an Event of Default, such Lender, Issuing Bank, or
the Administrative Agent shall not deduct or offset from any part
of the purchase price to be paid therefor any indebtedness owing
to it by the Grantor. Any and all proceeds received by the
Administrative Agent with respect to any sale of, collection from
or other realization upon all or any part of the Collateral,
whether consisting of monies, checks, notes, drafts, bills of
exchange, money orders or commercial paper of any kind
whatsoever, shall be held by the Administrative Agent and
distributed by the Administrative Agent in accordance with the
Credit Agreement (including, without limitation, SECTION
3.02(B)(II) thereof) and the Grantor shall remain liable for any
deficiency following the sale of the Collateral. Subject to the
terms of any applicable license agreement to which the Grantor is
a party, the Administrative Agent is hereby granted an
irrevocable license or other right to use, without charge, the
Grantor's labels, copyrights, patents, rights of use of any name,
trade names, general intangibles, trademarks and advertising
matter, or any property of a similar nature, in completing
production of, advertising for sale and selling any Collateral.
(b) To the extent permitted by applicable law, the Grantor
waives all claims, damages and demands against the Administrative Agent, any
Lender or any Issuing Bank arising out of the repossession, retention or sale of
the Collateral, or any part or parts thereof, except any such claims, damages
and awards arising out of the gross negligence or willful misconduct of the
Administrative Agent.
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(c) The Grantor recognizes that in the event the Grantor fails
to perform, observe or discharge any of its obligations or liabilities under
this Security Agreement, no remedy at law will provide adequate relief to the
Administrative Agent and the Administrative Agent shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages.
(d) The rights and remedies provided under this Security
Agreement are cumulative and may be exercised singly or concurrently, and are
not exclusive of any rights and remedies provided by law or equity.
8. THE ADMINISTRATIVE AGENT MAY PERFORM. If the Grantor fails
to perform any agreement contained herein, the Administrative Agent, upon
written notice to the Grantor if practicable, may itself perform, or cause
performance of, such agreement, and the expenses of the Administrative Agent
incurred in connection therewith shall constitute an Obligation payable by the
Grantor on demand.
9. THE ADMINISTRATIVE AGENT'S DUTY OF CARE. The Administrative
Agent shall not be liable for any acts, omissions, errors of judgment or
mistakes of fact or law including, without limitation, acts, omissions, errors
or mistakes with respect to the Collateral, except for those arising out of or
in connection with the Administrative Agent's (i) gross negligence or willful
misconduct, or (ii) failure to use reasonable care with respect to the safe
custody of the Collateral in the Administrative Agent's possession. Without
limiting the generality of the foregoing, the Administrative Agent shall be
under no obligation to take any steps necessary to preserve rights in the
Collateral against any other parties but may do so at its option. All expenses
incurred in connection therewith shall be for the sole account of the Grantor,
and shall constitute part of the Liabilities secured hereby.
10. MARSHALLING, PAYMENTS SET ASIDE; ADMINISTRATIVE AGENT
APPOINTED ATTORNEY-IN-FACT. The Administrative Agent shall be under no
obligation to marshal any assets in favor of the Grantor or against or in
payment of any or all of the Liabilities. To the extent that the Grantor makes a
payment or payments to the Administrative Agent or the Administrative Agent
receives any pay ment or proceeds of the Collateral for the benefit of the
Administrative Agent, any Lender, any Issuing Bank or any other Holder, which
payment(s) or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any party under any bankruptcy law, state or
federal law, common law or equitable cause, then, to the extent of such payment
or proceeds received, the Liabilities or any part thereof intended to be
satisfied shall be revived and continue in full force and effect, as if such
payment or proceeds had not been received by the Administrative Agent.
The Grantor agrees, upon the request of the Administrative
Agent and promptly following such request, to take any action and execute any
instrument which the Administrative Agent
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may deem necessary or advisable to accomplish the purposes of this Security
Agreement. The Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or Administrative Agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full power
and authority in the name of the Grantor, or in its own name, from time to time
in the Administrative Agent's discretion upon the occurrence and during the
continuance of an Event of Default, for the purpose of carrying out the terms of
this Security Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes hereof and, without limiting the generality of the
foregoing, hereby gives the Administrative Agent the power and right on behalf
of the Grantor, without notice to or assent by the Grantor, to the extent
permitted by applicable law, to do the following:
(i) to obtain and adjust insurance required to be paid to
the Administrative Agent pursuant to SECTION 8.05 of the Credit
Agreement;
(ii) ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipt for monies due and to
become due under or in respect of any of the Collateral;
(iii) receive, take, endorse, assign and deliver any and all
checks, notes, drafts, acceptances, documents and other
negotiable and nonnegotiable instruments, documents and chattel
paper taken or received by the Administrative Agent in connection
with this Security Agreement;
(iv) to commence, file, prosecute, defend, settle,
compromise or adjust any claim, suit, action or proceeding with
respect to the Collateral;
(v) to sell, transfer, assign or otherwise deal in or with
the Collateral or any part thereof pursuant to the terms and
conditions of this Security Agreement; and
(vi) to do, at its option and at the expense and for the
account of the Grantor, at any time or from time to time, all
acts and things which the Administrative Agent deems necessary to
protect or preserve the Collateral and to realize upon the
Collateral.
11. SEVERABILITY. If any provision of this Security Agreement
is held to be prohibited or unenforceable in any jurisdiction the substantive
laws of which are held to be applicable hereto, such prohibition or
unenforceability shall not affect the validity or enforceability of the
remaining provisions hereof and shall not invalidate or render unenforceable
such provision in any other jurisdiction.
12. AMENDMENTS, WAIVERS AND CONSENTS. None of the terms or
provisions of this Security Agreement may be waived, altered, modified or
amended, and no consent to any departure by the Grantor herefrom shall be
effective, except by or pursuant to an instrument in
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writing which (i) is duly executed by the Grantor (if the Grantor is adversely
affected by such amendment) and the Administrative Agent and (ii) complies with
the requirements of the Credit Agreement. Any such waiver shall be valid only to
the extent set forth therein. A waiver by the Administrative Agent of any right
or remedy under this Security Agreement on any one occasion shall not be
construed as a waiver of any right or remedy which the Administrative Agent
would otherwise have on any future occasion. No failure to exercise or delay in
exercising any right, power or privilege under this Security Agreement on the
part of the Administrative Agent shall operate as a waiver thereof; and no
single or partial exercise of any right, power or privilege under this Security
Agreement shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
13. BINDING EFFECT; SUCCESSORS AND ASSIGNS. This Security
Agreement shall be binding upon the Grantor and its successors and assign(s),
and shall inure to the benefit of the Administrative Agent, the Lenders, the
Issuing Banks and the other Holders, and their respective successors and
assigns. 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 Security Agreement, the Credit Agreement or any other Loan
Document or any Collateral. The Grantor's successors shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for the Grantor.
14. TERMINATION OF THIS SECURITY AGREEMENT; RELEASE OF
COLLATERAL. (a) The security interest granted by the Grantor under this Security
Agreement shall terminate against all the Collateral upon final payment in full
in cash of the Obligations and termination of the Commitments. Upon such
termination and at the written request of the Grantor or its successors or
assigns, and at the cost and expense of the Grantor or its successors or
assigns, the Administrative Agent shall execute in a timely manner a
satisfaction of this Security Agreement and such instruments, documents or
agreements as are necessary or desirable to terminate and remove of record any
documents constituting public notice of this Security Agreement and the security
interests and assignments granted hereunder and shall assign and transfer, or
cause to be assigned and transferred, and shall deliver or cause to be delivered
to the Grantor, all property, including all monies, instruments and securities
of the Grantor then held by the Administrative Agent or any agent, bailee or
nominee of the Administrative Agent.
(b) Notwithstanding anything in this Security Agreement to the
contrary, the Grantor may, to the extent permitted by SECTION 9.02 of the Credit
Agreement, sell, assign, transfer or otherwise dispose of any Collateral. In
addition, the Collateral shall be subject to release in accordance with SECTION
12.09(C) of the Credit Agreement (such Collateral and the Collateral referred to
in the immediately preceding sentence being the "Released Collateral"). The
Liens under this Security Agreement shall terminate with respect to the Released
Collateral upon such sale, transfer, assignment, disposition or release and upon
the request of the Grantor, the Administrative Agent shall execute and deliver
such instrument or document as may be necessary to release the Liens granted
hereunder; PROVIDED, HOWEVER, that (i) the
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Administrative Agent shall not be required to execute any such documents on
terms which, in the Administrative Agent's opinion, would expose the
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Liabilities or any Liens on (or obligations of the Grantor in respect of) all
interests retained by the Grantor, including without limitation, the proceeds of
any sale, all of which shall continue to constitute part of the Collateral.
15. THE ADMINISTRATIVE AGENT'S EXERCISE OF RIGHTS AND REMEDIES
UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.
Notwithstanding anything set forth herein to the contrary, it is hereby
expressly agreed that upon the occurrence and during the continuance of an Event
of Default, the Administrative Agent may, and upon the written direction of the
Requisite Lenders shall, exercise any of the rights and remedies provided in
this Security Agreement, the Credit Agreement and any of the other Loan
Documents.
16. NOTICES. Any notice, demand, request or any other
communication required or desired to be served, given or delivered hereunder
shall be in writing and shall be served, given or delivered as provided in
SECTION 13.08 of the Credit Agreement.
17. SECTION HEADINGS. The section headings herein are for
convenience of reference only, and shall not affect in any way the
interpretation of any of the provisions hereof.
18. GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED
BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, EXCEPT FOR PERFECTION AND ENFORCEMENT OF SECURITY INTERESTS AND LIENS
IN OTHER JURISDICTIONS, WHICH SHALL BE GOVERNED BY THE LAWS OF THOSE
JURISDICTIONS.
19. FURTHER INDEMNIFICATION. The Grantor agrees to pay, and to
save the Administrative Agent, each Lender and each Issuing Bank harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all excise, sales or other taxes which may be payable or determined to
be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Security Agreement.
20. COUNTERPARTS. This Security Agreement may be executed in
separate counterparts, each of which shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement.
21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The
Grantor agrees that the terms of SECTION 13.17 of the Credit Agreement with
respect to consent to jurisdiction and service of process shall apply equally to
this Security Agreement. The Administrative Agent shall have the right to
proceed against the Grantor or its personal property in a court in any
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location to enable the Administrative Agent to obtain personal jurisdiction over
the Grantor, to realize on the Collateral or any other security for the
Liabilities or to enforce a judgment or other court order entered in favor of
the Administrative Agent.
22. WAIVER OF BOND. The Grantor waives the posting of any bond
otherwise required of the Administrative Agent in connection with any judicial
process or proceeding to realize on the Collateral or any other security for the
Liabilities, to enforce any judgment or other court order entered in favor of
the Administrative Agent, or to enforce by specific performance, temporary
restraining order, or preliminary or permanent injunction, this Security
Agreement or any other agreement or document between the Administrative Agent
and the Grantor.
23. ADVICE OF COUNSEL. The Grantor represents and warrants to
the Administrative Agent, the Lenders and the Issuing Banks that it has
discussed this Security Agreement and, specifically, the provisions of SECTIONS
18, 21, 22 and 25 hereof, with the Grantor's attorneys.
24. FURTHER ASSURANCES. The Grantor agrees that at any time
and from time to time, at the expense of the Grantor, the Grantor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Administrative Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
25. WAIVER OF JURY TRIAL. EACH OF THE GRANTOR AND THE
ADMINISTRATIVE AGENT WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN THE ADMINISTRATIVE AGENT AND
THE GRANTOR ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS
SECURITY AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH. EITHER THE GRANTOR OR THE ADMINISTRATIVE AGENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECURITY AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
26. MERGER. This Security Agreement, taken together with all
the other Loan Documents, embodies the entire agreement and understanding,
between the Grantor and the Administrative Agent, any Lender or any Issuing
Banks and supersedes all prior agreements and understandings, written and oral,
relating to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Security Agreement or caused this Security Agreement to be executed and
delivered by their duly authorized officers as of the date first set forth
above.
BARNEYS (CA) LEASE CORP.
By /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Executive VP and CFO
CITICORP USA, INC., as Administrative Agent
By /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
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