EXHIBIT 10.2
FIRST AMENDMENT, dated as of December 1, 2004, to the Security
Agreement defined below (this "Amendment") among Barney's, Inc., a New York
corporation (the "Company"), the subsidiaries of the Company that are grantors
under the Security Agreement (collectively, the "Grantors"), and Wilmington
Trust Company, as collateral agent under the Security Agreement referred to
below (the "Collateral Agent").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Collateral Agent a security agreement, dated as of April 1, 2003 (the "Security
Agreement"), among the Company, the Grantors and the Collateral Agent, in
connection with the issuance by the Company of an aggregate principal amount at
maturity of $106,000,000 of its 9.000% Senior Secured Notes due 2008 (the
"Notes") pursuant to an indenture, dated as of April 1, 2003, among the Company,
the guarantors parties thereto and Wilmington Trust Company, as trustee (the
"Indenture");
WHEREAS, under the Security Agreement, each of the Grantors granted
to the Collateral Agent for the benefit of the Secured Parties, a security
interest in all of such Grantor's rights, title and interest in and to the
Collateral, to secure the prompt and complete payment, observance and
performance of all of the Liabilities, including the payment of all of the
principal of, interest and premium on the Notes.
WHEREAS, the Company and the Grantors have agreed to amend certain
provisions of the Security Agreement, in the manner and on the terms and
conditions provided herein.
WHEREAS, the Company has caused to be delivered to the Holders of the
Notes (the "Holders") an Offer to Purchase and Consent Solicitation Statement,
dated November 17, 2004 (as the same may be amended from time to time, the
"Offer to Purchase") and the related Consent and Letter of Transmittal, pursuant
to which the Company has (i) offered to purchase for cash any and all of the
outstanding Notes (such offer on the terms set forth in the Offer to Purchase
and such Consent and Letter of Transmittal, the "Offer") and (ii) solicited
consents to the adoption of amendments to the Indenture, amendments to the
Security Documents (as defined in the Offer to Purchase), which include
amendments to the Security Agreement, as set forth in Section 2 hereof (the
"Security Agreement Amendments", and the Security Agreement as amended herein,
the "Amended Security Agreement"), and
WHEREAS, the execution and delivery of this Amendment have been duly
authorized and all conditions and requirements necessary to make the Amended
Security Agreement a valid and binding agreement have been duly performed and
complied with; and
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Grantors and the Collateral Agent hereby agree as
follows:
1. Capitalized Terms. Capitalized terms used herein without definition shall
have the meanings assigned to them in the Security Agreement.
2. Amendment of Certain Provisions of the Security Agreement. The Security
Agreement is hereby amended to provide that, effective upon the Operative Time
(as defined below):
(a) SECTION 4.
(i) The text of Section 4(b) of the Security Agreement is hereby
deleted in its entirety and replaced with the following:
"All of the Equipment and Inventory (other than Inventory and Equipment
sold in accordance with the terms of the Indenture, Equipment being
repaired or serviced, Inventory in transit or in the possession and
control of subcontractors of such Grantor or any other Person for
processing and vehicles) are located at the places specified in
Schedule 1 attached hereto and such location is an owned, leased or
bailment location as specified in Schedule 1 attached hereto. Each
Grantor's name as it appears in official filings in the state of its
incorporation or other organization, the type of entity of each Grantor
(including corporation, partnership, limited partnership or limited
liability company), organizational identification number issued by each
Grantor's state of incorporation or organization or a statement that no
such number has been issued, each Grantor's state of organization or
incorporation, and the places where such Grantor's books and records
concerning the Collateral are currently kept are set forth in Schedule
2 attached hereto and made a part hereof."
(ii) the following text of Section 4(j) of the Security
Agreement is hereby deleted:
"The Grantor will deliver to the Collateral Agent a copy of any
Collateral Report delivered to the Priority Lien Agent under the
Credit Agreement."
(b) SECTION 5.
(i) The text of Sections 5(b), (c), (h), (i), (p), (q) and (r)
of the Security Agreement is hereby deleted in its entirety and replaced with
"[Intentionally Omitted]" and all references made thereto throughout the
Security Agreement are hereby deleted in their entirety; and
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(ii) The text of Section 5(o) is hereby deleted in its entirety
and replaced with the following:
"Upon request of the Collateral Agent, Grantor shall execute and
deliver any and all agreements as the Collateral Agent may request to evidence
the Collateral Agent's Lien on Intellectual Property, for which an application
for registration has been filed with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency, and
the General Intangibles of such Grantor relating thereto or represented thereby.
Each of the Grantors shall take all actions necessary or requested by the
Collateral Agent to maintain and pursue each application, to obtain the relevant
registration and to maintain the registration of each of the Intellectual
Property (now or hereafter existing), including the filing of applications for
renewal, affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings, unless the applicable Grantor shall
determine that such Intellectual Property is not material to the conduct of its
business. In the event that any of the Intellectual Property constituting
Collateral is infringed upon, or misappropriated or diluted by a third party,
such Grantor shall comply with Section 5(o) of this Security Agreement. Such
Grantor shall, unless such Grantor shall reasonably determine that such
Intellectual Property constituting Collateral is in no way material to the
conduct of its business or operations, promptly pursue all possible remedies for
such infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution, and shall take such
other actions as the Collateral Agent shall deem appropriate under the
circumstances to protect such Intellectual Property constituting Collateral."
(c) SECTION 6. The following text of Section 6 of the Security
Agreement is hereby deleted and all references made thereto throughout the
Security Agreement are hereby deleted:
"If an Event of Default shall have occurred and be continuing, each
of the Grantors, at its own expense, shall cause the independent certified
public accountants then engaged by such Grantor or such other certified public
accountants reasonably acceptable to the Collateral Agent to prepare and deliver
to the Collateral Agent and each Holder at any time and from time to time
promptly upon the Collateral Agent's request the following reports with respect
to each of the Grantors: (i) a reconciliation of all Accounts; (ii) an aging of
all Accounts; (iii) trial balances; and (iv) a test verification of such
Accounts as the Collateral Agent may request. Each of the Grantors, at its own
expense, shall deliver to the Collateral Agent the results of each physical
verification, if any, which such Grantor may in its discretion have made, or
caused any other Person to have made on its behalf, of all or any portion of its
Inventory."
(d) DEFINITIONS. Terms defined in the Security Agreement shall be
deemed deleted when reference to such definitions would be eliminated as a
result of the Security Agreement Amendments.
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3. Operative Time. Notwithstanding the execution of this Amendment on the date
hereof, the Amendment shall not amend the Security Agreement and become
operative unless and until the Company accepts for purchase all of the
outstanding Notes validly tendered for purchase pursuant to the Offer as of such
date and a majority in principal amount at maturity of the outstanding Notes
have been tendered as of the date hereof (the date and the time of such
acceptance being referred to herein as the "Operative Time"). The Company will
provide a written notice to the Collateral Agent as soon as reasonably
practicable after the determination of such Operative Time. At the Operative
Time, the Security Agreement Amendments effected hereby shall be deemed fully
operative without any further notice or action on the part of the Company, the
Grantors, the Collateral Agent, the Holders or any other person. In the event
that the Offer is terminated or withdrawn, or any condition of the Offer and the
consent solicitation is not satisfied or waived by the Company, this Amendment
shall be null and void.
4. Miscellaneous.
(a) Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
(c) Collateral Agent Not Responsible. The recitals contained herein
shall be taken as the statements of the Company and the Collateral Agent assumes
no responsibility for their correctness.
(d) Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
conflicts of laws principles thereof.
(f) Severability. In case any provisions in this Amendment shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the date first above written.
BARNEY'S, INC.
BARNEYS AMERICA, INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
XXXXX ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE CORP.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
WILMINGTON TRUST COMPANY,
as Collateral Agent
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Financial Services Officer
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