SECURITY AGREEMENT
Exhibit
10.2
Dated
January 5, 2009
From
The
Grantors referred to herein
as
Grantors
to
Wachovia
Bank, National Association
as Administrative
Agent
T A B L E O F C O N T E N T S
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Section
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Page
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1
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Section
2. Security for Obligations
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3
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Section
3. Grantors Remain Liable
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3
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Section
4. Representations and Warranties
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4
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Section
5. Further Assurances
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5
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Section
6. As to Inventory
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6
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Section
7. Insurance
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6
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Section
8. Post-Closing Changes; Collections on Receivables and Related
Contracts
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6
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Section
9. Transfers and Other Liens
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7
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Section
10. Administrative Agent Appointed Attorney in Fact
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7
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Section
11. Administrative Agent May Perform
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7
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Section
12. The Administrative Agent’s Duties
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8
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Section
13. Remedies
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8
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Section
14. Indemnity and Expenses
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9
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Section
15. Amendments; Waivers; Additional Grantors; Etc.
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10
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Section
16. Notices, Etc.
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10
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Section
17. Continuing Security Interest; Assignments under the 2005 Credit
Agreement
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11
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Section
18. Release; Termination
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11
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Section
19. Security Interest Absolute
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12
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Section
20. Execution in Counterparts
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13
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Section
21. Governing Law; Consent to Jurisdiction
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13
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Schedules
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Schedule
I
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–
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Location,
Chief Executive Office, Type of Organization, Jurisdiction of Organization
and Organizational Identification Number
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Schedule
II
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–
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Tradenames
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Schedule
III
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–
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Changes
in Name, Location, Etc.
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Schedule
IV
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–
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Locations
of Inventory
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Exhibits
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Exhibit
A
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–
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Form
of Security Agreement
Supplement
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SECURITY
AGREEMENT dated January 5, 2009 made by Xxxxx Apparel Group USA, Inc., a
Delaware corporation (the “Borrower”), Xxxxx Retail Corporation,
Nine West Footwear Corporation and certain subsidiaries of the Credit Parties
(as defined in the 2005 Credit Agreement referred to below) listed on the
signature pages hereof (the Credit Parties and the subsidiaries so listed being,
collectively, the “Grantors”), to Wachovia Bank, National
Association, as agent (the “Administrative
Agent”) for the
Secured Parties (as defined in the 2005 Credit Agreement referred to
below).
PRELIMINARY
STATEMENTS.
(1) Reference
is made to the Amended and Restated Credit Agreement dated as of May 16, 2005,
as amended by Amendment No. 1 dated as of July 27, 2007, Amendment No. 2 dated
as of June 6, 2008 and as further amended and restated by Amendment No. 3 dated
as of January 5, 2009 (as amended and restated, the “2005 Credit
Agreement”) among
Xxxxx Apparel Group USA, Inc. (formerly known as Xxxxxx, Ltd.), a Delaware
corporation, as the Borrower, the Additional Obligors, the Lenders party
thereto, and Wachovia Bank, National Association, as Administrative Agent for
the Lenders.
(2) The
Borrower has requested changes and modifications (the “Amendment”) to the 2005 Credit
Agreement. It is a condition precedent to the effectiveness of the
Amendment that the Grantors shall have granted the security interest
contemplated by this Agreement. Each Grantor will derive substantial
direct and indirect benefit from the transactions contemplated by the Loan
Documents and the Additional Secured Agreements.
(3) Terms
defined in the 2005 Credit Agreement and not otherwise defined in this Agreement
are used in this Agreement as defined in the 2005 Credit
Agreement. Further, unless otherwise defined in this Agreement or in
the 2005 Credit Agreement, terms defined in Article 8 or 9 of the UCC (as
defined below) are used in this Agreement as such terms are defined in such
Article 8 or 9. “UCC” means the Uniform Commercial
Code as in effect from time to time in the State of New York; provided that, if perfection
or the effect of perfection or non perfection or the priority of the security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial
Code as in effect from time to time in such other jurisdiction for purposes of
the provisions hereof relating to such perfection, effect of perfection or non
perfection or priority.
NOW,
THEREFORE, in consideration of the premises and in order to induce the Secured
Parties to consent to the Amendment, to continue to perform under the existing
Additional Secured Agreements and to enter into the Additional Secured
Agreements, each Grantor hereby agrees with the Administrative Agent for the
ratable benefit of the Secured Parties as follows:
Section
1. Grant of
Security. Subject to the proviso to this Section 1, each
Grantor hereby grants to the Administrative Agent, for the ratable benefit of
the Secured Parties, a security interest in such Grantor’s right, title and
interest in and to the following, in each case, as to each type of property
described below, whether now owned or hereafter acquired by such Grantor,
wherever located, and whether now or hereafter existing or arising
(collectively, the “Collateral”):
2
(a) all
inventory in all of its forms, including, without limitation, (i) all raw
materials, work in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods in which
such Grantor has an interest in mass or a joint or other interest or right of
any kind (including, without limitation, goods in which such Grantor has an
interest or right as consignee) and (iii) goods that are returned to or
repossessed or stopped in transit by such Grantor, and all accessions thereto
and products thereof and documents therefor, including, without limitation,
computer programs and supporting information that constitute inventory within
the meaning of the UCC (any and all such property being the “Inventory”);
(b) all
accounts, whether or not arising out of or in connection with the sale or lease
of goods or the rendering of services and whether or not earned by performance,
and all rights now or hereafter existing in and to all supporting obligations
and in and to all security agreements, Liens, leases, letters of credit and
other contracts securing or otherwise relating to the foregoing property (any
and all of such accounts, being the “Receivables,” and any and all such
supporting obligations, security agreements, Liens, leases, letters of credit
and other contracts being the “Related
Contracts”);
(c) to
the extent constituting proceeds of the Collateral described in clauses (a) and
(b) of this Section 1, chattel paper (including, without limitation, tangible
chattel paper and electronic chattel paper), instruments, documents, deposit
accounts, letter-of-credit rights, general intangibles and other obligations of
any kind, all investment property in which such Grantor has now, or acquires
from time to time hereafter, any right, title or interest in any manner from the
proceeds of Receivables or Related Contracts, and the certificates or
instruments, if any, representing or evidencing such investment property, and
all dividends, distributions, return of capital, interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such investment property and all
warrants, rights or options issued thereon or with respect thereto;
(d) all
books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor
pertaining to any of the Collateral; and
(e) all
proceeds of, collateral for, income, royalties and other payments now or
hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Collateral (including, without limitation, proceeds,
collateral and supporting obligations that constitute property of the types
described in clauses (a) through (d) of this Section 1) and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral,
provided, that,
notwithstanding any of the foregoing to the contrary, for so long as any notes
or other debt securities are outstanding under the Indenture, with respect to
each Grantor that is a Restricted Party (as defined in the Indenture), the
Collateral shall not include any property of such Restricted Party which,
pursuant to the Indenture, would require such Grantor to grant Liens in favor of
the Trustee (as defined in the Indenture) to equally and ratably secure any of
the notes or other debt securities issued pursuant to the
Indenture.
Section
2. Security
for Obligations. (a) This Agreement secures, in the
case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents and all obligations of such Grantor
or any of its Affiliates now or hereafter existing under the Additional Secured
Agreements, whether direct or indirect, absolute or contingent, and whether for
principal, reimbursement obligations, interest, fees, premiums, penalties,
indemnifications, contract causes of action, costs, expenses or otherwise, provided, that, with respect
to the Grantors that are Restricted Parties, in no event shall the aggregate
amount of obligations secured by the Collateral of such Grantors exceed the
amounts permitted to be secured by Liens granted by such Grantors without the
requirement to equally and ratably secure any of the notes or other debt
securities issued pursuant to the Indenture (all such obligations being the
“Secured
Obligations”). Without
limiting the generality of the foregoing, this Agreement secures, as to each
Grantor, the payment of all amounts that constitute part of the Secured
Obligations and would be owed by such Grantor to any Secured Party under the
Loan Documents and the Additional Secured Agreements but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Credit Party.
(b) Each
Grantor, and by its acceptance of this Agreement, the Administrative Agent and
each other Secured Party, hereby confirms that it is the intention of all such
Persons that this Agreement and the obligations of each Grantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law
(as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Agreement and the obligations of each Grantor
hereunder. To effectuate the foregoing intention, the Administrative
Agent, the other Secured Parties and the Grantors hereby irrevocably agree that
the obligations of each Grantor under this Agreement at any time shall be
limited to the maximum amount as will result in the Secured Obligations of such
Grantor not constituting a fraudulent transfer or conveyance. For
purposes hereof, “Bankruptcy
Law” means any
proceeding of the type referred to in Section 6.01(f) of the Credit Agreement or
Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.
Section
3. Grantors
Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, including, without limitation, the Related Contracts and (c) no
Secured Party shall have any obligation or liability under the contracts and
agreements included in the Collateral by reason of this Agreement, any other
Loan Document or any Additional Secured Agreement, nor shall any Secured Party
be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
Section
4. Representations and
Warranties. Each Grantor represents and warrants as
follows:
(a) Such
Grantor’s exact legal name, location, chief executive office, type of
organization, jurisdiction of organization and organizational identification
number is set forth in Schedule I hereto. Such Grantor has no trade
names other than as listed on Schedule II hereto. Within the five
years preceding the date hereof, such Grantor has not changed its name,
location, chief executive office, type of organization, jurisdiction of
organization or organizational identification number from those set forth in
Schedule I hereto except as set forth in Schedule III hereto.
(b) Such
Grantor is the legal and beneficial owner of the Collateral granted or purported
to be granted by it free and clear of any Lien, claim, option or right of
others, except for the security interest created under this Agreement and those
permitted under Section 11.3 of the Credit Agreement. No effective
financing statement or other instrument similar in effect covering all or any
part of such Collateral or listing such Grantor or any trade name of such
Grantor as debtor is on file in any recording office, except such as may have
been filed in favor of the Administrative Agent relating to the Loan Documents
and the Additional Secured Agreements or in connection with Liens permitted
under Section 11.3 of the Credit Agreement.
(c) All
of the Inventory of such Grantor is located at the places specified therefor in
Schedule IV hereto or at another location as to which such Grantor has complied
with the requirements of Section 6(a). Such Grantor has exclusive
possession and control of its Inventory, other than Inventory stored at any
leased premises or warehouse for which a landlord’s or warehouseman’s agreement,
in form and substance satisfactory to the Administrative Agent, is in
effect.
(d) None
of the Receivables are evidenced by a promissory note or other instrument that
has not been delivered to the Administrative Agent.
(e) This
Agreement creates in favor of the Administrative Agent for the benefit of the
Secured Parties a valid security interest in the Collateral granted by such
Grantor, securing the payment of the Secured Obligations. The Uniform
Commercial Code financing statements or other appropriate filings, recordings or
registrations prepared by the Administrative Agent based upon the information
provided to the Administrative Agent pursuant to clause (a) of this Section 4
(or specified by notice from the Borrower to the Administrative Agent after the
date hereof in the case of filings, recordings or registrations required in the
future), are all the filings, recordings and registrations that are necessary to
establish a legal, valid and perfected security interest in favor of the
Administrative Agent (for the ratable benefit of the Secured Parties) in respect
of all Collateral 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.
(f) No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for (i) the grant by such Grantor of the security interest granted
hereunder or for the execution, delivery or performance of this Agreement by
such Grantor, (ii) the perfection or maintenance of the security interest
created hereunder, except for the filing of financing and continuation
statements under the UCC described in clause (e) above, which financing
statements have been duly filed and are in full force and effect, or (iii) 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.
(g) The
Inventory that has been produced or distributed by such Grantor has been
produced in compliance with all requirements of applicable law, including,
without limitation, the Fair Labor Standards Act.
Section
5. Further
Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action necessary or that the Administrative Agent may
reasonably request, in order to perfect and reasonably maintain any pledge or
security interest granted or purported to be granted by such Grantor hereunder
or to enable the Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral of such
Grantor. Without limiting the generality of the foregoing, each
Grantor will promptly with respect to Collateral of such Grantor: (i)
if any such Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Administrative Agent
hereunder such note or instrument or chattel paper duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Administrative Agent; (ii) file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as the Administrative Agent may reasonably
request, in order to perfect and preserve the security interest granted or
purported to be granted by such Grantor hereunder; and (iii) deliver to the
Administrative Agent evidence that all other actions that the Administrative
Agent may deem reasonably necessary in order to perfect and protect the security
interest granted or purported to be granted by such Grantor under this Agreement
has been taken.
(b) Each
Grantor hereby authorizes the Administrative Agent to file one or more financing
or continuation statements, and amendments thereto, including, without
limitation, one or more financing statements indicating that such financing
statements cover all of the inventory and accounts receivable (or words of
similar effect) of such Grantor. A photocopy or other reproduction of
this Agreement shall be sufficient as a financing statement where permitted by
law. Each Grantor ratifies its authorization for the Administrative
Agent to have filed such financing statements, continuation statements or
amendments filed prior to the date hereof.
(c) Each
Grantor will furnish to the Administrative Agent from time to time statements
and schedules further identifying and describing the Collateral of such Grantor
and such other reports in connection with such Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
Section
6. As to
Inventory. (a) Each Grantor will keep its Inventory
(other than Inventory sold in the ordinary course of business) at the places
therefor specified in Section 4(c) or, upon 30 days’ prior written notice to the
Administrative Agent, at such other places designated by such Grantor in such
notice.
(b) Each
Grantor will promptly furnish to the Administrative Agent a statement respecting
any loss or damage exceeding $5,000,000 per occurrence to any of its
Inventory.
(c) Each
Grantor will pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including, without
limitation, claims for labor, materials and supplies) against, its Inventory,
except to the extent payment thereof is not required by Section 9.5 of the 2005
Credit Agreement. In producing its Inventory, each Grantor will
comply with all requirements of applicable law, including, without limitation,
the Fair Labor Standards Act.
Section
7. Insurance. Each
Grantor will, at its own expense, maintain insurance with respect to its
Inventory in accordance with the requirements of Section 9.3 of the Credit
Agreement.
Section
8. Post-Closing Changes;
Collections on Receivables and Related
Contracts. (a) No Grantor will change its name,
type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 4(a) of this
Agreement without first giving at least 30 days’ prior written notice to the
Administrative Agent and taking all action required by the Administrative Agent
for the purpose of perfecting or protecting the security interest granted by
this Agreement. Each Grantor will hold and preserve its records
relating to the Collateral, including, without limitation, the Related
Contracts, and will permit representatives of the Administrative Agent at any
time during normal business hours to inspect and make abstracts from such
records and other documents. If any Grantor does not have an
organizational identification number and later obtains one, it will forthwith
notify the Administrative Agent of such organizational identification
number.
(b) Except
as otherwise provided in this subsection (b), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor in
respect of the Receivables and under the Related Contracts. In
connection with such collections, such Grantor may take (and, at the
Administrative Agent’s direction, will take) such action as such Grantor or the
Administrative Agent may deem necessary to enforce collection of the Receivables
and Related Contracts; provided, however, that the
Administrative Agent shall have the right at any time upon the occurrence and
during the continuance of an Event of Default and upon written notice to such
Grantor of its intention to do so, to notify the obligors in respect of any
Receivables and under any Related Contracts of the assignment of such
Receivables and Related Contracts to the Administrative Agent and to direct such
obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Administrative Agent and, upon such notification and
at the expense of such Grantor, to enforce collection of any such Receivables
and Related Contracts, to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done, and to otherwise exercise all rights with respect to such Receivables and
Related Contracts, including, without limitation, those set forth set forth in
Section 9-607 of the UCC. After receipt by any Grantor of the notice
from the Administrative Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including, without limitation,
instruments) received by such Grantor in respect of the Receivables and Related
Contracts of such Grantor shall be received in trust for the benefit of the
Administrative Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent in the same
form as so received (with any necessary indorsement) and if any Event of Default
shall have occurred and be continuing, applied as provided in Section 13(b) and
(ii) such Grantor will not adjust, settle or compromise the amount or payment of
any Receivable or amount due on any Related Contract, release wholly or partly
any obligor thereof or allow any credit or discount thereon. No
Grantor will permit or consent to the subordination of its right to payment of
any Receivables or amount due under any Related Contracts to any other
indebtedness or obligations of the obligor thereof.
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Section
9. Transfers and Other
Liens. Each Grantor agrees that it will not (i) sell, assign
or otherwise dispose of, or grant any option with respect to, any of the
Collateral, other than sales, assignments and other dispositions of Collateral,
and options relating to Collateral, permitted under the terms of the 2005 Credit
Agreement, or (ii) create or suffer to exist any Lien upon or with respect to
any of the Collateral of such Grantor except for the pledge, assignment and
security interest created under this Agreement and Liens permitted under the
2005 Credit Agreement.
Section
10. Administrative Agent
Appointed Attorney in Fact. Each Grantor hereby irrevocably
appoints the Administrative Agent such Grantor’s attorney in fact, with full
authority in the place and stead of such Grantor and in the name of such Grantor
or otherwise, from time to time upon the occurrence and during the continuance
of an Event of Default, in the Administrative Agent’s discretion, to take any
action and to execute any instrument that the Administrative Agent may
reasonably request to accomplish the purposes of this Agreement, including,
without limitation:
(a) to
obtain and adjust insurance required to be paid to the Administrative Agent
pursuant to Section 7,
(b) to
ask for, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral,
(c) to
receive, indorse and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and
(d) to
file any claims or take any action or institute any proceedings that the
Administrative Agent may deem necessary for the collection of any of the
Collateral or otherwise to enforce compliance with the rights of the
Administrative Agent with respect to any of the Collateral.
Section
11. Administrative Agent May
Perform. If any Grantor fails to perform any agreement
contained herein, the Administrative Agent may, but without any obligation to do
so and without notice, itself perform, or cause performance of, such agreement,
and the expenses of the Administrative Agent incurred in connection therewith
shall be payable by such Grantor under Section 14.
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Section
12. The
Administrative Agent’s Duties. (a) The powers
conferred on the Administrative Agent hereunder are solely to protect the
Secured Parties’ interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Administrative Agent shall have no duty as to any Collateral,
as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not any Secured Party has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral. The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which it accords its own
property.
(b) Anything
contained herein to the contrary notwithstanding, the Administrative Agent may
from time to time, when the Administrative Agent deems it to be necessary,
appoint one or more subagents (each a “Subagent”) for the Administrative
Agent hereunder with respect to all or any part of the Collateral. In
the event that the Administrative Agent so appoints any Subagent with respect to
any Collateral, (i) the assignment and pledge of such Collateral and the
security interest granted in such Collateral by each Grantor hereunder shall be
deemed for purposes of this Security Agreement to have been made to such
Subagent, in addition to the Administrative Agent, for the ratable benefit of
the Secured Parties, as security for the Secured Obligations of such Grantor,
(ii) such Subagent shall automatically be vested, in addition to the
Administrative Agent, with all rights, powers, privileges, interests and
remedies of the Administrative Agent hereunder with respect to such Collateral,
and (iii) the term “Administrative Agent,” when used herein in relation to any
rights, powers, privileges, interests and remedies of the Administrative Agent
with respect to such Collateral, shall include such Subagent; provided, however, that no such
Subagent shall be authorized to take any action with respect to any such
Collateral unless and except to the extent expressly authorized in writing by
the Administrative Agent.
Section
13. Remedies. If
any Event of Default shall have occurred and be continuing:
(a) The
Administrative Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party upon default under the UCC and also
may: (i) require each Grantor to, and each Grantor hereby agrees that
it will at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the Collateral as directed by the Administrative Agent
and make it available to the Administrative Agent at a place and time to be
designated by the Administrative Agent that is reasonably convenient to both
parties; (ii) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other commercially reasonable terms; (iii) occupy any
premises owned or leased by any of the Grantors where the Collateral or any part
thereof is assembled or located for a reasonable period in order to effectuate
its rights and remedies hereunder or under law, without obligation to such
Grantor in respect of such occupation; and (iv) exercise any and all rights and
remedies of any of the Grantors under or in connection with the Collateral, or
otherwise in respect of the Collateral, including, without limitation, (A) any
and all rights of such Grantor to demand or otherwise require payment of any
amount under, or performance of any provision, in respect of the Receivables,
the Related Contracts and the other Collateral, and (B) exercise all other
rights and remedies with respect to the Receivables, the Related Contracts and
the other Collateral, including, without limitation, those set forth in Section
9-607 of the UCC. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days’ notice to such 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. The Administrative
Agent shall not be obligated to make any sale of 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.
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(b) Any
cash held by or on behalf of the Administrative Agent and all cash proceeds
received by or on behalf of the Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Administrative Agent
pursuant to Section 14) in whole or in part by the Administrative Agent for the
ratable benefit of the Secured Parties against, all or any part of the Secured
Obligations, in the following manner:
(i) first, paid to the
Administrative Agent for any amounts then owing to the Administrative Agent
pursuant to Section 14.2 of the 2005 Credit Agreement or otherwise under the
Loan Documents; and
(ii) second, ratably paid to the
other Secured Parties for the Secured Obligations.
Any
surplus of such cash or cash proceeds held by or on the behalf of the
Administrative Agent and remaining after payment in full of all the Secured
Obligations shall be promptly paid over to the applicable Grantor or to
whomsoever may be lawfully entitled to receive such surplus.
(c) All
payments received by any Grantor in respect of the Collateral shall be received
in trust for the benefit of the Administrative Agent, shall be segregated from
other funds of such Grantor and shall be forthwith paid over to the
Administrative Agent in the same form as so received (with any necessary
indorsement).
Section
14. Indemnity and
Expenses. (a) Each Grantor agrees to indemnify,
defend and save and hold harmless each Secured Party and each of their
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified
Party”) from and
against, and shall pay on demand, any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or
resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party’s gross negligence or
willful misconduct.
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(b) Each
Grantor will upon demand pay to the Administrative Agent the amount of any and
all reasonable expenses, including, without limitation, the reasonable fees and
expenses of its counsel and of any experts and agents, that the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Administrative Agent or the
other Secured Parties hereunder or (iv) the failure by such Grantor to perform
or observe any of the provisions hereof.
Section
15. Amendments; Waivers;
Additional Grantors; Etc. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Administrative
Agent or any other Secured Party to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
(b) Upon
the execution and delivery by any Person of a security agreement supplement in
substantially the form of Exhibit A hereto (each a “Security
Agreement Supplement”), such Person shall be
referred to as an “Additional
Grantor” and
shall be and become a Grantor hereunder, and each reference in this Agreement
and the other Loan Documents to “Grantor” shall also mean and be a reference to
such Additional Grantor, each reference in this Agreement and the other Loan
Documents to the “Collateral” shall also mean and be a reference to the
Collateral granted by such Additional Grantor and each reference in this
Agreement to a Schedule shall also mean and be a reference to the schedules
attached to such Security Agreement Supplement.
Section
16. Notices,
Etc. All notices and other communications provided for
hereunder shall be either (i) in writing (including telegraphic, telecopier or
telex communication) and mailed, telegraphed, telecopied, telexed or otherwise
delivered or (ii) by electronic mail (if electronic mail addresses are
designated as provided below) confirmed immediately in writing, in the case of
the Borrower or the Administrative Agent, addressed to it at its address
specified in the 2005 Credit Agreement and, in the case of each Grantor other
than the Borrower, addressed to it at its address set forth opposite such
Grantor’s name on the signature pages hereto or on the signature page to the
Security Agreement Supplement pursuant to which it became a party hereto; or, as
to any party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and other
communications shall, when mailed, telegraphed, telecopied, telexed, sent by
electronic mail or otherwise, be effective when deposited in the mails,
delivered to the telegraph company, telecopied, confirmed by telex answerback,
sent by electronic mail and confirmed in writing, or otherwise delivered (or
confirmed by a signed receipt), respectively, addressed as aforesaid; except
that notices and other communications to the Administrative Agent shall not be
effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or of any Security Agreement Supplement or Schedule
hereto shall be effective as delivery of an original executed counterpart
thereof.
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Section
17. Continuing Security
Interest; Assignments under the 2005 Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the latest of (i) the payment in
full in cash of the Secured Obligations, (ii) the Revolving Credit Termination
Date and (iii) the termination or expiration of all Letters of Credit, (b) be
binding upon each Grantor, its successors and assigns and (c) inure, together
with the rights and remedies of the Administrative Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c),
any Lender may assign or otherwise transfer all or any portion of its rights and
obligations under the 2005 Credit Agreement (including, without limitation, all
or any portion of its Revolving Credit Commitment, the Revolving Credit Loans
owing to it and the Revolving Credit Note (or Notes), if any, held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, in each
case as provided in Section 14.10 of the 2005 Credit Agreement.
Section
18. Release;
Termination. (a) Upon any sale, lease, transfer or
other disposition of any item of Collateral of any Grantor in accordance with
the terms of the Loan Documents (other than sales of Inventory in the ordinary
course of business), the Administrative Agent will, at such Grantor’s expense,
execute and deliver to such Grantor such documents in form and substance
reasonably satisfactory to the Administrative Agent as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that (i) at the time
of such request and such release no Event of Default shall have occurred and be
continuing, (ii) such Grantor shall have delivered to the Administrative Agent,
at least ten Business Days prior to the date of the proposed release, a written
request for release describing the item of Collateral and the terms of the sale,
lease, transfer or other disposition in reasonable detail, including, without
limitation, the price thereof and any expenses in connection therewith, together
with a form of release for execution by the Administrative Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Loan Documents and as to such other matters as the Administrative Agent
may request and (iii) the proceeds of any such sale, lease, transfer or other
disposition required to be applied, or any payment to be made in connection
therewith, in accordance with Section 2.3 of the 2005 Credit Agreement shall, to
the extent so required, be paid or made to, or in accordance with the
instructions of, the Administrative Agent when and as required under Section 2.3
of the 2005 Credit Agreement.
(b) Upon
the latest of (i) the payment in full in cash of the Secured Obligations, (ii)
the Revolving Credit Termination Date and (iii) the termination or expiration of
all Letters of Credit, the pledge and security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the applicable
Grantor. Upon any such termination, the Administrative Agent will, at
the applicable Grantor’s expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.
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Section
19. Security Interest
Absolute. The obligations of each Grantor under this Agreement
are independent of the Secured Obligations or any other obligations of any other
Grantor under or in respect of the Loan Documents and the Additional Secured
Agreements, and a separate action or actions may be brought and prosecuted
against each Grantor to enforce this Agreement, irrespective of whether any
action is brought against such Grantor or any other Grantor or whether such
Grantor or any other Grantor is joined in any such action or
actions. All rights of the Administrative Agent and the other Secured
Parties and the pledge, assignment and security interest hereunder, and all
obligations of each Grantor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and each Grantor hereby irrevocably waives (to
the maximum extent permitted by applicable law) any defenses it may now have or
may hereafter acquire in any way relating to, any or all of the
following:
(a) any
lack of validity or enforceability of any Loan Document, any Additional Secured
Agreement or any other agreement or instrument relating thereto;
(b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations or any other obligations of any other Credit
Party under or in respect of the Loan Documents, the Additional Secured
Agreements or any other amendment or waiver of or any consent to any departure
from any Loan Document or Additional Secured Agreement including, without
limitation, any increase in the Secured Obligations resulting from the extension
of additional credit to any Credit Party or any of its Subsidiaries or
otherwise;
(c) any
taking, exchange, release or non-perfection of any Collateral or any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured
Obligations;
(d) any
manner of application of any Collateral or any other collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of sale or
other disposition of any Collateral or any other collateral for all or any of
the Secured Obligations or any other obligations of any other Grantor under or
in respect of the Loan Documents, the Additional Secured Agreements or any other
assets of any Credit Party or any of its Subsidiaries;
(e) any
change, restructuring or termination of the corporate structure or existence of
any Credit Party or any of its Subsidiaries;
(f) any
failure of any Secured Party to disclose to any Grantor any information relating
to the business, condition (financial or otherwise), operations, performance,
assets, nature of assets, liabilities or prospects of any other Grantor now or
hereafter known to such Secured Party (each Grantor waiving any duty on the part
of the Secured Parties to disclose such information);
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(g) the
failure of any other Person to execute this Agreement or any other Collateral
Document, guaranty or agreement or the release or reduction of liability of any
Grantor or other grantor or surety with respect to the Secured Obligations;
or
(h) any
other circumstance (other than release of such Grantor pursuant to Section 18,
but including, without limitation, any statute of limitations) or any existence
of or reliance on any representation by any Secured Party that might otherwise
constitute a defense available to, or a discharge of, such Grantor or any other
Grantor or a third party grantor of a security interest.
This
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Credit Party or otherwise, all
as though such payment had not been made.
Section
20. Execution in
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Agreement.
Section
21. Governing Law; Consent to
Jurisdiction. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
(b) Each
of the parties hereby irrevocably consents to the personal jurisdiction of the
state and federal courts located in New York County, New York, in any action,
claim or other proceeding arising out of any dispute in connection with this
Agreement, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations. Each of the parties hereby
irrevocably consents to the service of a summons and complaint and other process
in any action, claim or proceeding brought by any other party hereto in
connection with this Agreement, any rights or obligations hereunder, or the
performance of such rights and obligations, on behalf of itself or its property,
in the manner specified in Section 16. Nothing in this Section 21
shall affect the right of any of the parties hereto to serve legal process in
any other manner permitted by Applicable Law or affect the right of any of the
parties hereto to bring any action or proceeding against any other party hereto
or its properties in the courts of any other jurisdictions.
(c) EACH
OF THE PARTIES HERETO HEREBY ACKNOWLEDGES IT IRREVOCABLY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY JUDICIAL PROCEEDING, ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF,
CONNECTED WITH OR RELATING TO THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
[signatures appear on the following
pages]
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IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.
|
Address
for Notices:
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
ENERGIE
KNITWEAR, INC.
By____/s/ Xxxxxx X.
Donnalley____________
Name: Xxxxxx
X. Xxxxxxxxx
Title: Vice
President & Assistant Secretary
|
|
|
Address
for Notices:
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxx 00000
|
XXXXX
APPAREL GROUP USA, INC.
By____/s/ Xxxxxx X.
Donnalley____________
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Treasurer
|
|
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Address
for Notices:
0000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxx 00000
|
XXXXX
INVESTMENT CO. INC.
By____/s/ Xxxxxx X.
Donnalley____________
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Vice President/Finance,
Treasurer and Assistant Secretary
|
|
|
Address
for Notices:
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
XXXXX
JEANSWEAR GROUP, INC.
By____/s/ Xxxxxx X.
Donnalley____________
Name: Xxxxxx
X. Xxxxxxxxx
Title:
Vice President & Assistant Secretary
|
|
|
Address
for Notices:
000
Xxxxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxx 00000
|
XXXXX
RETAIL CORPORATION
By____/s/ Xxxxxx X.
Donnalley____________
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Vice President & Treasurer
|
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[Signature
Page]
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Address
for Notices:
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
L.E.I.
GROUP, INC.
By____/s/ Xxxxxx X.
Donnalley____________
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Vice President & Assistant Secretary
|
|
|
Address
for Notices:
0000
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxx 00000
|
NINE
WEST DEVELOPMENT CORPORATION
By____/s/ Xxxxxx X.
Donnalley____________
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Vice President/Finance,
Treasurer and Assistant Secretary
|
|
|
Address
for Notices:
0000
Xxxxxxxxxxx Xxxxxx
Xxxxx
Xxxxxx, Xxx Xxxx 00000
|
NINE
WEST FOOTWEAR CORPORATION
By____/s/ Xxxxxx X.
Donnalley____________
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Treasurer
|
|
|
Address
for Notices:
00
Xxx Xxxx
Xxxx
Xxxxxxxxxx, XX 00000
|
VICTORIA
+ CO LTD.
By____/s/ Xxxxxx X.
Donnalley____________
Name: Xxxxxx
X. Xxxxxxxxx
Title:
Assistant Secretary
|
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[Signature
Page]
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Accepted
and agreed as of the date first above written:
| WACHOVIA BANK, NATIONAL ASSOCIATION | ||
|
By:
|
/s/ Xxxxx X. Xxxxxxxxx | |
| Name: Xxxxx X. Xxxxxxxxx | ||
| Title: Director | ||
|
[Signature
Page]
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