Exhibit 10.3
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of July 15, 2002 (as amended,
supplemented or otherwise modified from time to time, this "Security
Agreement"), by and among (a) Barney's, Inc., a New York corporation
("Barneys"), Barneys America, Inc., a Delaware corporation, Barneys (CA) Lease
Corp., a Delaware corporation, Barneys (NY) Lease Corp., a Delaware corporation,
Xxxxx All-American Sportswear Corp., a New York corporation, BNY Licensing
Corp., a Delaware corporation, and Barneys America (Chicago) Lease Corp., a
Delaware corporation (collectively, together with their successors and permitted
assigns, the "Grantors" and each individually, a "Grantor"), and (b) General
Electric Capital Corporation, a Delaware corporation, in its capacity as
administrative agent (with its successors in such capacity, the "Administrative
Agent") for the Lenders (as defined below) under that certain Credit Agreement,
dated as of July 15, 2002 (as amended, restated, supplemented or otherwise
modified and in effect from time to time, the "Credit Agreement"), among the
Grantors, the Administrative Agent and the lenders from time to time party
thereto (collectively, the "Lenders").
W I T N E S S E T H:
WHEREAS, each of the Grantors is a party to the Credit
Agreement, pursuant to which the Lenders have agreed, subject to certain
conditions precedent, to make certain loans and other financial accommodations
to the Grantors from time to time; and
WHEREAS, in order to secure the prompt and complete payment,
observance and performance of (i) all of the Obligations (as defined in the
Credit Agreement) and (ii) all of the Grantors' 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 and the Lenders have required as a
condition, among others, to entering into the Credit Agreement that the Grantors
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. All terms defined in Article 8
and Article 9 of the Uniform Commercial Code in effect as of the date hereof in
the State of New York are used herein as defined therein.
(b) The words "hereby," "hereof," "herein" and "hereunder" and
words of like import when used in this Security Agreement shall refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement, and section references are to this Security Agreement unless
otherwise specified.
(c) All terms defined in this Security Agreement in the
singular shall have comparable meanings when used in the plural, and vice versa,
unless otherwise specified.
2. Grant of Security Interest. To secure the prompt and
complete payment, observance and performance of all the Liabilities, each of the
Grantors hereby grants (subject as set forth below) to the Administrative Agent
for the benefit of the Administrative Agent, the Lenders and the other Holders,
a security interest in all of such 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"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Documents;
(iv) all General Intangibles (including payment
intangibles and Software);
(v) all Goods (including Inventory, Equipment and
Fixtures);
(vi) all Instruments;
(vii) all Investment Property;
(viii) all Deposit Accounts of such Grantor, including all
Blocked Accounts, Concentration Accounts and all
other bank accounts and all deposits therein;
(ix) all money, cash or cash equivalents of such Grantor;
(x) all Supporting Obligations and Letter-of-Credit
Rights of such Grantor;
(xi) commercial tort claims; and
(xii) to the extent not otherwise included, all Proceeds,
tort claims, insurance claims and other rights to
payments not otherwise included in the foregoing and
products of the foregoing and all accessions to,
substitutions and replacements for, and rents and
profits of, each of the foregoing.
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 Barneys to the Administrative Agent, the Lenders or the other Holders
of a Lien of any kind whatsoever on any "Collateral" (as defined in the (i)
Security Agreement, dated as of January 28, 1999, between Barneys and
BI-Equipment Lessors LLC, (ii) the Security Agreement, dated as of January 28,
1999, between Barneys and Copelco Capital, Inc. and (iii) the Security
Agreement, dated as of January 28, 1999, between Barneys and Xxxx Xxxxxxx
Leasing Corporation) subject to a Lien granted to any of BI-Equipment Lessors
LLC, Copelco Capital, Inc. or Xxxx Xxxxxxx Leasing Corporation, pursuant to any
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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. Each of the Grantors hereby expressly
agrees that, notwithstanding anything set forth herein to the contrary, such
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 such Grantor thereunder, all in
accordance with and pursuant to the terms and provisions thereof, and the
exercise by the Administrative Agent, any Lender of any rights under this
Security Agreement, the Credit Agreement or any other Loan Document shall not
release such Grantor from any of such Grantor's duties or obligations hereunder
and under each such contract, agreement, interest or obligation. Neither the
Administrative Agent nor any Lender 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 any Grantor to the Administrative Agent or the granting by
such Grantor to the Administrative Agent of a Lien thereon or the receipt by the
Administrative Agent, any Lender of any payment relating to any such contract,
agreement, interest or obligation pursuant hereto, nor shall the Administrative
Agent, any Lender 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
such 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 such
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 such Grantor, on which such Grantor has
been granted a Lien to which such Grantor may be entitled at any time or times.
4. Representations, Warranties and Covenants. Each of the
Grantors 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) No effective security agreement, financing statement,
equivalent security or Lien instrument or continuation statement
covering all or any part of the Collateral is on file or of record in
any public office, except such as may have been filed (i) by any
Grantor in favor of the Administrative Agent pursuant to this Security
Agreement or the other Loan Documents, and (ii) in connection with any
Liens permitted under Section 9.03 of the Credit Agreement.
(b) 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 such Grantor or
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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. 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, and such Grantor will not
change such principal place of business or chief executive office or
remove such records without providing the Administrative Agent with at
least thirty (30) days' prior written notice of such change. Each of
the Grantors 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.
(c) Each of the Grantors has exclusive possession and control
of the Equipment and Inventory except as permitted under the Credit
Agreement.
(d) Each of the Grantors is the legal and beneficial owner of
the Collateral in which it has rights free and clear of all Liens,
except as permitted under Section 9.03 of the Credit Agreement. None of
the Grantors has, 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 each
of the Grantors during the five (5) years preceding the Closing Date is
disclosed on Schedule 3 hereto.
(e) 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 each
Grantor's jurisdiction of incorporation or organization listed on
Schedule 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.
(f) 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 (e) (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 Security
Agreement or the remedies in respect of the Collateral pursuant to this
Security Agreement.
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(g) The Inventory produced by each of the Grantors has been
produced in compliance in all material respects with all requirements
of the Fair Labor Standards Act.
(h) Schedule 4 hereto lists all Instruments, Letter-of-Credit
Rights and Chattel Paper of each of the Grantors.
(i) Schedule 5 hereto sets forth a complete, true and accurate
list of all registered Intellectual Property in which the Grantors have
interests in or hold title to. This Security Agreement is effective to
create a valid and continuing Lien on and, upon filing of the
Intellectual Property Security Agreement with the United States Patent
and Trademark Office and the United States Copyright Office and the
filing of financing statements in the appropriate offices in each
Grantor's jurisdiction of incorporation or organization listed on
Schedule 2 hereto, perfected Liens in favor of the Administrative Agent
on each Grantor's registered Intellectual Property and such perfected
Liens are enforceable as such as against any and all creditors of and
purchasers from such Grantor. Upon filing of the Intellectual Property
Security Agreement with the United States Copyright Office and the
United States Patent and Trademark Office and the filing of appropriate
financing statements in each Grantor's jurisdiction of incorporation or
organization listed on Schedule 2 hereto, all action necessary or
desirable to protect and perfect the Administrative Agent's Lien on
each Grantor's Intellectual Property shall have been duly taken.
(j) With respect to the Eligible Receivables, except as
specifically disclosed in the most recent Collateral Report delivered
to the Administrative Agent, (i) they represent bona fide sales of
Inventory or rendering of services to account debtors in the ordinary
course of each Grantor's business and are not evidenced by a judgment,
Instrument or Chattel Paper; (ii) there are no setoffs, claims or
disputes existing or asserted with respect thereto and no Grantor has
made any agreement with any account debtor for any extension of time
for the payment thereof, any compromise or settlement for less than the
full amount thereof, any release of any account debtor from liability
therefor, or any deduction therefrom except a discount or allowance
allowed by such Grantor in the ordinary course of its business for
prompt payment and disclosed to the Administrative Agent; (iii) to each
Grantor's knowledge, there are no facts, events or occurrences which in
any way impair the validity or enforceability thereof or could
reasonably be expected to reduce the amount payable thereunder as shown
on any Grantor's books and records and any invoices, statements and
Collateral Reports delivered to the Administrative Agent and Lenders
with respect thereto; (iv) no Grantor has received any notice of
proceedings or actions which are threatened or pending against any
account debtor which might result in any adverse change in such account
debtor's financial condition; and (v) no Grantor has knowledge that any
account debtor is unable generally to pay its debts as they become due.
Further with respect to the Eligible Receivables, (x) the amounts shown
on all invoices, statements and Collateral Reports which may be
delivered to the Administrative Agent with respect thereto are actually
and absolutely owing to each Grantor as indicated thereon and are not
in any way contingent; (y) no payments have been or shall be made
thereon except payments immediately delivered to the applicable Blocked
Accounts or the Administrative Agent as required pursuant to the terms
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of Annex C to the Credit Agreement; and (z) to each Grantor's
knowledge, all account debtors have the capacity to contract.
5. Covenants. Each of the Grantors 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 15
below:
(a) At any time and from time to time, upon the Administrative
Agent's written request and at the expense of such Grantor, such
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, each of the Grantors will: (i) upon the
occurrence and during the continuance of an Event of Default, at the
request of the Administrative Agent, xxxx conspicuously each item of
Chattel Paper included in the Collateral and each related contract and
each of its records pertaining to the Collateral, with a legend, in
form and substance satisfactory to the Administrative Agent, indicating
that such document, Chattel Paper, related contract or Collateral is
subject to the security interest granted hereby; (ii) if any Collateral
shall be evidenced by a promissory note or other instrument (other than
checks or drafts received in the ordinary course of such 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. Each of the Grantors hereby authorizes the Administrative Agent
to file any such financing or continuation statements without the
signature of such Grantor to the extent permitted by applicable law.
Each of the Grantors 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) Each of the Grantors 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 such 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 any Grantor and such Grantor hereby authorizes the
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Administrative Agent to substitute a new Schedule 1 hereto to reflect
such additional location(s).
(c) Each of the Grantors will keep and maintain at such
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, each
of the Grantors shall, for the Administrative Agent's further security,
deliver and turn over to the Administrative Agent or the Administrative
Agent's designated representatives at any time upon three (3) Business
Days' notice from the Administrative Agent or the Administrative
Agent's designated representative, copies of any such books and records
(including, without limitation, any and all computer tapes, programs
and source codes relating to the Collateral or any part or parts
thereof).
(d) In any suit, proceeding or action brought by the
Administrative Agent under any Account comprising part of the
Collateral, each of the Grantors will save, indemnify and keep the
Administrative Agent, each Lender harmless from and against all expense
(including reasonable attorneys' fees and expenses), 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 such 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 such Grantor, and all such
obligations of such Grantor shall be and shall remain enforceable
against and only against such Grantor and shall not be enforceable
against the Administrative Agent or any Lender; provided, however, such
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 or any Lender as determined in a final
non-appealable judgment by a court of competent jurisdiction.
(e) Each of the Grantors 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 such 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, none of the Grantors will, 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
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credit or discount whatsoever thereon other than trade discounts
granted in the ordinary course of business.
(g) Each of the Grantors 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.
(h) Each of the Grantors shall, in accordance with the terms
of the Credit Agreement, obtain or use its commercially reasonable
efforts to obtain waivers or subordinations of Liens from landlords and
mortgagees, and each of the Grantors shall in all instances obtain
signed acknowledgements of the Administrative Agent's Liens from
bailees having possession of such Grantor's Goods that they hold for
the benefit of the Administrative Agent.
(i) If required by the terms of the Credit Agreement and not
waived by the Administrative Agent in writing (which waiver may be
revoked), each Grantor shall obtain authenticated control letters from
each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or
commodities to or for such Grantor.
(j) In accordance with the Credit Agreement, each of the
Grantors shall obtain a blocked account, lockbox or similar agreement
with each bank or financial institution holding a Deposit Account for
such Grantor.
(k) Each of the Grantors that is or becomes the beneficiary of
a letter of credit shall promptly, and in any event within two (2)
Business Days after becoming a beneficiary, notify the Administrative
Agent thereof and, upon the request of the Administrative Agent, use
commercially reasonable efforts to enter into a tri-party agreement
with the Administrative Agent and the issuer and/or confirmation bank
with respect to Letter-of-Credit Rights assigning such Letter-of-Credit
Rights to the Administrative Agent and directing all payments
thereunder to the Administrative Agent's Account, all in form and
substance reasonably satisfactory to the Administrative Agent.
(l) Each of the Grantors shall take all steps necessary to
grant the Administrative Agent control of all electronic chattel paper
in accordance with the Uniform Commercial Code and all "transferable
records" as defined in each of the Uniform Electronic Transactions Act
and the Electronic Signatures in Global and National Commerce Act.
(m) Each of the Grantors hereby irrevocably authorizes the
Administrative Agent at any time and from time to time to file in any
filing office in any Uniform Commercial Code jurisdiction any initial
financing statements and amendments thereto that (i) indicate the
Collateral (A) as all assets of such Grantor or words of similar
effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the Uniform
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Commercial Code or such jurisdiction, or (B) as being of an equal or
lesser scope or with greater detail, and (ii) contain any other
information required by part 5 of Article 9 of the Uniform Commercial
Code for the sufficiency or filing office acceptance of any financing
statement or amendment, including whether such Grantor is an
organization, the type of organization and any organization
identification number issued to such Grantor. Each Grantor agrees to
furnish any such information to the Administrative Agent promptly upon
request. Each Grantor also ratifies its authorization for the
Administrative Agent to have filed in any Uniform Commercial Code
jurisdiction any initial financing statements or amendments thereto if
filed prior to the date hereof.
(n) Each of the Grantors shall promptly, and in any event
within two (2) Business Days after the same is acquired by it, notify
the Administrative Agent of any commercial tort claim (as defined in
the Uniform Commercial Code) acquired by it and unless otherwise
consented by the Administrative Agent, such Grantor shall enter into a
supplement to this Security Agreement, granting to the Administrative
Agent a Lien in such commercial tort claim.
(o) Each of the Grantors shall notify the Administrative Agent
immediately if it knows or has reason to know that any application or
registration relating to any material Intellectual Property (now or
hereafter existing) may become abandoned or dedicated to the public, or
of any adverse determination or development (including the institution
of, or any such determination or development in, any proceeding in the
United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding such Grantor's ownership of any material
Intellectual Property, its right to register the same, or to keep and
maintain the same. In no event shall any Grantor, either itself or
through any agent, employee, licensee or designee, file an application
for the registration of any Intellectual Property with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency without giving the Administrative Agent
written notice within thirty (30) Business Days thereof, and, upon
request of the Administrative Agent, Grantor shall execute and deliver
any and all agreements and as the Administrative Agent may request to
evidence the Administrative Agent's Lien on such Intellectual Property,
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 Administrative 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 for 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 Administrative Agent
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shall deem appropriate under the circumstances to protect such
Intellectual Property constituting Collateral.
(p) Each of the Grantors will, if so requested by the
Administrative Agent, furnish to the Administrative Agent, as often as
the Administrative Agent requests, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may
reasonably request, all in such detail as the Administrative Agent may
reasonably specify.
(q) Each of the Grantors will advise the Administrative Agent
promptly, in reasonable detail, (i) of any Lien (other than Liens
permitted by the Credit Agreement) or claim made or, to its knowledge,
asserted against any of the Collateral, and (ii) of the occurrence of
any other event which would have a material adverse effect on the
aggregate value of the Collateral or on the Liens created hereunder or
under any other Loan Document.
(r) Without limiting the prohibitions on mergers involving the
Grantors contained in the Credit Agreement, no Grantor shall
reincorporate or reorganize itself under the laws of any jurisdiction
other than the jurisdiction in which it is incorporated or organized as
of the date hereof without the prior written consent of the
Administrative Agent.
(s) Each of the Grantors acknowledges that it is not
authorized to file any financing statement or amendment or termination
statement with respect to any financing statement filed pursuant to
this Security Agreement or any of the other Loan Documents without the
prior written consent of the Administrative Agent and agrees that it
will not do so without the prior written consent of the Administrative
Agent, subject to such Grantor's rights under Section 9-509(d)(2) of
the Uniform Commercial Code.
6. Collections. Except as otherwise provided in this Section
6, each of the Grantors shall continue to collect, at its own expense, all
amounts due or to become due such Grantor under the Accounts. In connection with
such collections, such Grantor may take (and, after the occurrence and during
the continuation of an Event of Default, at the Administrative Agent's
direction, must take) such action as such 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 such
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 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 Accounts, and 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. After receipt by such 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 such Grantor in respect of the Accounts
shall be received in trust for the benefit of the Administrative Agent, the
Lenders and the other Holders hereunder, shall be segregated from other funds of
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such 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). If an Event of Default shall have
occurred and be continuing, the Administrative Agent may at any time in the
Administrative Agent's own name, in the name of a nominee of the Administrative
Agent or in the name of any Grantor communicate (by mail, telephone, facsimile
or otherwise) with account debtors, parties to contracts and obligors in respect
of Instruments to verify with such Persons, to the Administrative Agent's
satisfaction, the existence, amount terms of, and any other matter relating to,
Accounts, payment intangibles, Instruments or Chattel Paper. 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 Administrative Agent to prepare and deliver to the Administrative Agent
and each Lender at any time and from time to time promptly upon the
Administrative 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
Administrative Agent may request. Each of the Grantors, at its own expense,
shall deliver to the Administrative 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.
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 each of the Grantors to, and each of the Grantors
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 such 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 any Grantor related thereto are or may be located and,
without charge or liability to the Administrative Agent, seize and
remove such Collateral and such books and records from such premises,
or remain upon such premises and use the same for the purpose of
enforcing any and all rights and remedies of the Administrative Agent
under this Security Agreement, the Credit Agreement or any of the other
Loan Documents; and
(iii) without notice, except as specified below, sell, lease,
assign, grant an option or options to purchase or otherwise dispose of
all or any part of the Collateral in one or more parcels, at public or
private sale or sales, at any exchange, broker's board or at any of the
11
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 none of the
Grantors shall 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.
Each of the Grantors 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 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. No
notification required by law need be given to any Grantor if such
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 and any Lender 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 any 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 or the
Administrative Agent upon the occurrence and during the continuance of
an Event of Default, such Lender 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 Grantors. 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
Grantors shall remain liable for any deficiency following the sale of
the Collateral. Subject to the terms of any applicable license
agreement to which any of the Grantors is a party, the Administrative
Agent is hereby granted an irrevocable license or other right to use,
without charge, such Grantor's labels, copyrights, patents, rights of
use of any name, trade names, general intangibles, trademarks and
advertising matter, or any property of a similar nature, in completing
production of, advertising for sale and selling any Collateral.
(b) To the extent permitted by applicable law, each of the
Grantors waives all claims, damages and demands against the Administrative Agent
or any Lender 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) Each of the Grantors recognizes that in the event such
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
12
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 any of the
Grantors fails to perform any agreement contained herein, the Administrative
Agent, upon written notice to such 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
such 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 Grantors,
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 any of the Grantors or against or
in payment of any or all of the Liabilities. To the extent that any 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 or any other Holder, which payment(s) or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any party under any bankruptcy law, state or federal law, common law
or equitable cause, then, to the extent of such payment or proceeds received,
the Liabilities or any part thereof intended to be satisfied shall be revived
and continue in full force and effect, as if such payment or proceeds had not
been received by the Administrative Agent.
Each of the Grantors 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.
On the Closing Date, each of the Grantors shall execute and
deliver to the Administrative Agent a power of attorney (the "Power of
Attorney") substantially in the form attached hereto as Exhibit A. The power of
attorney granted pursuant to the Power of Attorney is a power coupled with an
interest and shall be irrevocable until the Termination Date. The powers
conferred on the Administrative Agent, for the benefit of the Administrative
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Agent and the Lenders, under the Power of Attorney are solely to protect the
Administrative Agent's interests (for the benefit of the Administrative Agent
and the Lenders) in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent agrees that (a) except for the powers granted in clause (h)
of the Power of Attorney, it shall not exercise any power or authority granted
under the Power of Attorney unless an Event of Default has occurred and is
continuing, and (b) the Administrative Agent shall account for any moneys
received by the Administrative Agent in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney provided that none
of the Administrative Agent or any Lender shall have any duty as to any
Collateral, and the Administrative Agent and the Lenders shall be accountable
only for amounts that they actually receive as a result of the exercise of such
powers. NONE OF the Administrative Agent, THE LENDERS OR THEIR RESPECTIVE
AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE
RESPONSIBLE TO ANY GRANTOR FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF
ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR
OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR
CONSEQUENTIAL DAMAGES.
11. Grant of License to Use Intellectual Property Constituting
Collateral. For the purpose of enabling the Administrative Agent to exercise
rights and remedies under Section 7 hereof (including, without limiting the
terms of Section 7 hereof, in order to take possession of, hold, preserve,
process, assemble, prepare for sale, market for sale, sell or otherwise dispose
of Collateral), each of the Grantors hereby grants to the Administrative Agent,
for the benefit of the Administrative Agent and Lenders, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to such Grantor) to use, license or sublicense any Intellectual
Property now owned or hereafter acquired by such Grantor, and wherever the same
may be located, and including in such license access to all media in which any
of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof, unless prohibited by
applicable law. The Administrative Agent will not exercise the rights granted in
this Section 11 until such time as the Administrative Agent shall be lawfully
entitled to exercise the rights and remedies under Section 7 hereof.
12. Severability. If any provision of this Security Agreement
is held to be prohibited or unenforceable in any jurisdiction the substantive
laws of which are held to be applicable hereto, such prohibition or
unenforceability shall not affect the validity or enforceability of the
remaining provisions hereof and shall not invalidate or render unenforceable
such provision in any other jurisdiction.
13. 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 Grantors herefrom shall be
effective, except by or pursuant to an instrument in writing which (i) is duly
executed by each of the Grantors (if any of the Grantors 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
14
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.
14. Binding Effect; Successors and Assigns. This Security
Agreement shall be binding upon each of the Grantors and its successors and
assign(s), and shall inure to the benefit of the Administrative Agent, the
Lenders 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. Each Grantor's successors shall include, without
limitation, a receiver, trustee or debtor-in-possession of or for such Grantor.
15. Termination of this Security Agreement; Release of
Collateral. (a) The security interest granted by each of the Grantors 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 each of the Grantors or its successors
or assigns, and at the cost and expense of each of the Grantors 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 each of the Grantors, all property, including all monies, instruments and
securities of such 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, each of the Grantors 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 such 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 such Grantor in respect of) all
interests retained by such Grantor, including without limitation, the proceeds
of any sale, all of which shall continue to constitute part of the Xxxxxxxxxx.
00
00. Reinstatement. This Security Agreement shall remain in
full force and effect and continue to be effective should any petition be filed
by or against any Grantor for liquidation or reorganization, should any Grantor
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantor's assets, and shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the
Liabilities, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Liabilities, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Liabilities shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
17. 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.
18. 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.
19. 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.
20. 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. EACH OF THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED IN XXX
XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX. EACH GRANTOR HEREBY CONSENTS AND AGREES
THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX,
XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE GRANTORS, ADMINISTRATIVE AGENT AND LENDERS PERTAINING TO
THIS SECURITY AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
Security AGREEMENT; PROVIDED THAT ADMINISTRATIVE AGENT, LENDERS AND GRANTORS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX
XXXXXXX XXXXXXX XX XXX XXXX XXXXXX; AND, PROVIDED, FURTHER, NOTHING IN THIS
SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE AGENT
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
16
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ADMINISTRATIVE AGENT. EACH
GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
GRANTOR AT THE ADDRESS SET FORTH ON ANNEX I TO THE CREDIT AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT
THEREOF OR FIVE (5) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID.
21. Further Indemnification. Each of the Grantors jointly and
severally agrees to pay, and to save the Administrative Agent and each Lender
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.
22. 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.
23. Consent to Jurisdiction and Service of Process. Each of
the Grantors agrees that the terms of Section 13.14 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 any of the Grantors or its personal property in a court in any
location to enable the Administrative Agent to obtain personal jurisdiction over
such 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.
24. Waiver of Bond. Each of the Grantors 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 such Grantor.
25. Advice of Counsel. Each of the Grantors represents and
warrants to the Administrative Agent and the Lenders that it has discussed this
Security Agreement and, specifically, the provisions of Sections 20, 23, 24 and
27 hereof, with such Grantor's attorneys.
17
26. Further Assurances. Each of the Grantors agrees that at
any time and from time to time, at the expense of such Grantor, such 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.
27. WAIVER OF JURY TRIAL. EACH OF THE GRANTORS 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
SUCH 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 SUCH 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.
28. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Security Agreement.
In the event an ambiguity or question of intent or interpretation arises, this
Security Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Security
Agreement.
29. Merger. This Security Agreement, taken together with all
the other Loan Documents, embodies the entire agreement and understanding,
between each of the Grantors and the Administrative Agent or any Lender and
supersedes all prior agreements and understandings, written and oral, relating
to the subject matter hereof.
[remainder of page intentionally left blank]
18
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.
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
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
By /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
