Exhibit 10.15
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 XXXXX ALL-AMERICAN SPORTSWEAR 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.
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(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, letters of credit,
stocks, bonds, and debt and equity securities, whether or not certificated, and
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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
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clear of all Liens, except as permitted under SECTION 9.03 of the Credit
Agreement. The 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
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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 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).
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(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 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
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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 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
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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 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.
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(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.
(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 payment 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
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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 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
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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 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
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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 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.
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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 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.
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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.
XXXXX ALL-AMERICAN SPORTSWEAR 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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