Exhibit 10.11
EXECUTION COPY
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Security Agreement"), dated as of January 28,
1999, by and among BARNEYS AMERICA, INC. (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:
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WHEREAS, the Grantor is a party to the Credit Agreement, pursuant to
which the Lenders and the Issuing Banks have agreed, subject to certain
conditions precedent, to make certain loans and other financial accommodations
to the Borrowers from time to time; and
WHEREAS, in order to secure the prompt and complete payment,
observance and performance of (i) all of the Obligations and (ii) all of the
Grantor's obligations and liabilities hereunder and in connection herewith (all
the Obligations and such obligations and liabilities hereunder being hereinafter
referred to collectively as the "Liabilities"), the Administrative Agent, the
Lenders and the Issuing Banks have required as a condition, among others, to
entering into the Credit Agreement that the Grantor execute and deliver this
Security Agreement;
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINED TERMS.
(a) Unless otherwise defined herein, each capitalized term used
herein that is defined in the Credit Agreement shall have the meaning specified
for such term in the Credit
Agreement. Unless otherwise defined herein or in the Credit Agreement, all terms
defined in Article 8 and Article 9 of the Uniform Commercial Code in effect as
of the date hereof in the State of New York are used herein as defined therein.
(b) The words "hereby," "hereof," "herein" and "hereunder" and
words of like import when used in this Security Agreement shall refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement, and section references are to this Security Agreement unless
otherwise specified.
(c) All terms defined in this Security Agreement in the singular
shall have comparable meanings when used in the plural, and VICE VERSA, unless
otherwise specified.
2. GRANT OF SECURITY INTEREST. To secure the prompt and complete
payment, observance and performance of all the Liabilities, the Grantor hereby
grants (subject as set forth below) to the Administrative Agent for the benefit
of the Administrative Agent, the Lenders, the Issuing Banks and the other
Holders, a security interest in all of the Grantor's rights, title and interests
in and to the following property, whether now owned or existing or hereafter
arising or acquired and wheresoever located (the "Collateral"):
(a) ACCOUNTS: All present and future accounts, accounts receivable
and other rights of the Grantor to payment for the sale or lease of goods or the
rendition of services (except those evidenced by instruments or chattel paper),
whether now existing or hereafter arising and wherever arising, and whether or
not they have been earned by performance (collectively, "Accounts");
(b) EQUIPMENT: All of the Grantor's present and future (i)
equipment and fixtures, including, without limitation, wherever located,
printing presses and other machinery, manufacturing, distribution, selling, data
processing and office equipment, furniture, furnishings, assembly systems,
tools, tooling, molds, dies, appliances and vehicles, vessels and aircraft, (ii)
other tangible personal property (other than the Grantor's Inventory) and (iii)
any and all accessions, parts and appurtenances attached to any of the foregoing
or used in connection therewith, and any substitutions therefor and
replacements, products and proceeds thereof (collectively, "Equipment");
(c) GENERAL INTANGIBLES: All of the Grantor's present and future
general intangibles, choses in action, causes of action, and all other
intangible personal property of every kind and nature including, without
limitation, corporate, partnership and other business books and records,
interests in partnerships and limited liability companies that do not constitute
securities, inventions, designs, patents, patent applications, trademarks,
service marks, trademark applications, service xxxx applications, trade names,
trade secrets, goodwill, registrations, copyrights, licenses, franchises,
customer lists, computer programs, software and other computer materials, tax
refunds, tax refund claims, rights and claims against charters, carriers,
shippers, franchisees, lessors, and lessees, and rights to indemnification,
intercompany receivables, and any security documents executed in connection
therewith, deposit accounts, proceeds of any
letters of credit, indemnity, warranty or guaranty payable to the Grantor from
time to time with respect to the foregoing or proceeds of any insurance policies
on which the Grantor is named as 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 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 Grantor thereunder or pursuant
thereto, (b) make any payment, or make any inquiry as to the nature or the
sufficiency of any payment received by the Grantor or the sufficiency of any
performance by any party under any such contract, agreement, interest or
obligation, or (c) present or file any claim, or take any action to collect or
enforce any performance or payment of any amounts which may have been assigned
to the Grantor, on which the Grantor has been granted a Lien to which the
Grantor may be entitled at any time or times.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Grantor hereby
represents, warrants and covenants that as of the date of the execution of this
Security Agreement, and until the termination of this Security Agreement
pursuant to SECTION 14 below:
(a) All of the Equipment and Inventory (other than Inventory and
Equipment sold in accordance with the terms of the Credit Agreement,
Equipment being repaired or serviced, Inventory in transit or in the
possession and control of subcontractors of the Grantor or any other
Person for processing and vehicles) are located at the places specified in
SCHEDULE 1 attached hereto as amended from time to time pursuant to
SECTION 5(B) below and such location is an owned, leased or bailment
location as specified in SCHEDULE 1 attached hereto. As of the date
hereof, the correct corporate name, the principal place of business, the
chief executive office, and the federal tax identification number of the
Grantor and the places where the Grantor's books and records concerning
the Collateral are currently kept are set forth in SCHEDULE 2 attached
hereto and made a part hereof, and the Grantor will not change such
principal place of business or chief executive office or remove such
records without (i) providing the Administrative Agent with at least
thirty (30) days' prior written notice of such change, and (ii) making all
filings under the Uniform Commercial Code necessary or appropriate to
preserve the perfection of the security interests described herein to the
extent such security interest may be perfected by such filings. The
Grantor will not change its name, identity or corporate structure in any
manner which might make any financing statement filed hereunder
misleading, UNLESS the Grantor shall have (A) given the Administrative
Agent at least thirty (30) days' prior written notice thereof (and
received any consent that may be required under the terms of the Credit
Agreement), and (B) certified to the Administrative Agent that all filings
reflecting such new name, identity or structure have been made which are
necessary or appropriate to preserve the perfection of the security
interests described herein. The Grantor will hold and preserve such
records and chattel paper and will permit representatives of the
Administrative Agent, upon reasonable notice and at times during normal
business hours to inspect and make abstracts from such records and chattel
paper.
(b) The Grantor has exclusive possession and control of the
Equipment and Inventory except as permitted under the Credit Agreement.
(c) The Grantor is the legal and beneficial owner of the
Collateral free and clear of all Liens, except as permitted under SECTION
9.03 of the Credit Agreement. The Grantor has not, during the five (5)
years preceding the date hereof, been known as or used any other corporate
or fictitious name, except as disclosed on SCHEDULE 3 hereto, nor acquired
all or substantially all the assets, capital stock or operating unit of
any Person, except as disclosed on SCHEDULE 3 hereto and each predecessor
in interest of the Grantor during the five (5) years preceding the Closing
Date is disclosed on SCHEDULE 3 hereto.
(d) This Security Agreement creates in favor of the Administrative
Agent a legal, valid and enforceable security interest in the Collateral,
securing the payment of the Liabilities. When financing statements have
been filed in the appropriate offices in the locations listed on SCHEDULES
1 AND 2 hereto, the Administrative Agent will have a fully perfected first
priority Lien on the Collateral to the extent such Lien may be perfected
by Uniform Commercial Code filings.
(e) No consent of any Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required either for
(i) the perfection or maintenance of the security interest created hereby,
except for the Uniform Commercial Code filings referred to in clause (d)
(and except for the filings with the United States Patent and Trademark
Office and except for, in the case of motor vehicles, certificates of
title which have been issued, which note the Administrative Agent's
security interest) or (ii) for the exercise by the Administrative Agent of
its rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement.
(f) The Inventory produced by the Grantor has been produced in
compliance in all material respects with all requirements of the Fair
Labor Standards Act.
5. COVENANTS. The Grantor covenants and agrees with the
Administrative Agent that from and after the date of this Security Agreement and
until the termination of this Security Agreement pursuant to SECTION 14 below:
(a) At any time and from time to time, upon the Administrative
Agent's written request and at the expense of the Grantor, the Grantor
will promptly and duly execute and deliver any and all such further
instruments and documents and take such further action as the
Administrative Agent reasonably may deem desirable in order to perfect and
protect any Lien granted or purported to be granted hereby or to enable
the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to the Collateral. Without limiting the generality
of the foregoing, the Grantor will: (i) upon the occurrence and during the
continuance of an Event of Default, at the request of the Administrative
Agent, xxxx conspicuously each item of chattel paper included in the
Collateral and each related contract and each of its records pertaining to
the Collateral, with a legend, in form and substance satisfactory to the
Administrative
Agent, indicating that such document, chattel paper, related contract or
Collateral is subject to the security interest granted hereby; (ii) if any
Collateral shall be evidenced by a promissory note or other instrument
(other than checks or drafts received in the ordinary course of the
Grantor's business), deliver and pledge to the Administrative Agent
hereunder such note or instrument duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent; and (iii) execute and file such
financing or continuation statements, or amendments thereto, and such
other instruments or notices as the Administrative Agent may request, as
may be necessary or desirable, in order to perfect and preserve the
security interest granted or purported to be granted hereby. The Grantor
hereby authorizes the Administrative Agent to file any such financing or
continuation statements without the signature of the Grantor to the extent
permitted by applicable law. The Grantor hereby agrees that a carbon,
photographic, photostatic or other reproduction of this Security Agreement
or of a financing statement is sufficient as a financing statement to the
extent permitted by applicable law.
(b) The Grantor shall keep the Equipment and Inventory (other than
Inventory and Equipment sold in accordance with the terms of the Credit
Agreement, Equipment being repaired or serviced, Inventory in transit or
in the possession and control of subcontractors of the Grantor and
vehicles) at the places specified in SCHEDULE 1 hereto and deliver written
notice to the Administrative Agent at least 30 days prior to establishing
any other location at which it reasonably expects to maintain Inventory
and/or Equipment (it being understood and agreed that all action required
by SECTION 5(A) hereof shall have been taken in the relevant jurisdiction
with respect to all such Equipment and/or Inventory prior to the
establishment of any such location). Upon the establishment of any such
location, and after notice thereof to the Administrative Agent as required
in the preceding sentence, SCHEDULE 1 hereto shall be deemed amended to
add such location thereto without further action by the Administrative
Agent or the Grantor and the Grantor hereby authorizes the Administrative
Agent to substitute a new SCHEDULE 1 hereto to reflect such additional
location(s).
(c) The Grantor will keep and maintain at the Grantor's own cost
and expense satisfactory and complete records of the Collateral in a
manner reasonably acceptable to the Administrative Agent, including,
without limitation, a record of all payments received and all credits
granted with respect to such Collateral and a record of the Administrative
Agent's security interest in the Collateral. Upon the occurrence and
during the continuance of an Event of Default, the Grantor shall, for the
Administrative Agent's further security, deliver and turn over to the
Administrative Agent or the Administrative Agent's designated
representatives at any time upon three (3) Business Days' notice from the
Administrative Agent or the Administrative Agent's designated
representative, copies of any such books and records (including, without
limitation, any and all computer tapes, programs and source codes relating
to the Collateral or any part or parts thereof).
(d) In any suit, proceeding or action brought by the
Administrative Agent under any Account comprising part of the Collateral,
the Grantor will save, indemnify and keep the Administrative Agent, each
Lender and each Issuing Bank harmless from and against all expense, loss
or damages suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the obligor thereunder,
arising out of a breach by the Grantor of any obligation or arising out of
any other agreement, indebtedness or liability at any time owing to or in
favor of such obligor or its successors from the Grantor, and all such
obligations of the Grantor shall be and shall remain enforceable against
and only against the Grantor and shall not be enforceable against the
Administrative Agent, any Lender or any Issuing Bank; PROVIDED, HOWEVER,
the Grantor shall have no obligation to the Administrative Agent with
respect to the matters indemnified pursuant to this subsection (d)
resulting from the willful misconduct or gross negligence of the
Administrative Agent, any Lender or an Issuing Bank as determined in a
final non-appealable judgment by a court of competent jurisdiction.
(e) The Grantor will not create, permit or suffer to exist, and
will defend the Collateral against and take such other action as is
necessary to remove, any Lien on such Collateral, other than Liens
permitted under SECTION 9.03 of the Credit Agreement, and will defend the
right, title and interest of the Administrative Agent in and to the
Grantor's rights to such Collateral, including, without limitation, the
proceeds and products thereof, against the claims and demands of all
Persons whatsoever other than claims secured by Liens permitted under
SECTION 9.03 of the Credit Agreement.
(f) Upon the occurrence and during the continuance of an Event of
Default, the Grantor will not, without the Administrative Agent's prior
written consent, except in the ordinary course of business and for amounts
which are not material to the Barneys Group, taken as a whole in the
aggregate, (i) grant any extension of the time of payment of any of the
Collateral or compromise, compound or settle the same for less than the
full amount thereof; (ii) release, wholly or partly, any Person liable for
the payment thereof; or (iii) allow any credit or discount whatsoever
thereon other than trade discounts granted in the ordinary course of
business.
(g) The Grantor will advise the Administrative Agent promptly, in
reasonable detail, of (i) any material Lien or claim made by or asserted
against any or all of the Collateral, and (ii) the occurrence of any other
event which would have a material adverse effect on the aggregate value of
the Collateral or on the Liens with respect to such Collateral created
hereunder.
6. COLLECTIONS. Except as otherwise provided in this SECTION 6,
the Grantor shall continue to collect, at its own expense, all amounts due or to
become due to the Grantor under the Accounts. In connection with such
collections, the Grantor may take (and, after the occurrence and during the
continuation of an Event of Default, at the Administrative Agent's direction,
must take) such action as the Grantor or, after the occurrence and during the
continuation an Event of Default, the Administrative Agent may deem necessary or
advisable to enforce collection of the Accounts; PROVIDED, HOWEVER, that the
Administrative Agent shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default, to require the Grantor to notify
the account debtors or obligors under any Accounts of the assignment of such
Accounts to the Administrative Agent and to direct such account debtors or
obligors to make payment of all amounts due or to become due to the Grantor
thereunder directly to the Administrative Agent and, upon such notification and
at the expense of the Grantor, to enforce collection of any such Accounts, and
to adjust, settle or compromise the amount or payment thereof, in the same
manner and to the same extent as the Grantor might have done. After receipt by
the Grantor of the notice from the Administrative Agent referred to in the
proviso to the preceding sentence, all amounts and proceeds (including
instruments) received by the Grantor in respect of the Accounts shall be
received in trust for the benefit of the Administrative Agent, the Lenders, the
Issuing Banks and the other Holders hereunder, shall be segregated from other
funds of the Grantor and shall be forthwith paid over to the Administrative
Agent in the same form as so received (with any necessary endorsement) to be
applied to the Obligations in accordance with the Credit Agreement (including,
without limitation, SECTION 3.02(B)(II) thereof).
7. REMEDIES, APPLICATION OF PROCEEDS, RIGHTS UPON EVENT OF
DEFAULT.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies provided for in the Credit
Agreement and all the rights and remedies of a secured party under the Uniform
Commercial Code, and all other applicable law as in effect in any relevant
jurisdiction. In addition, the Administrative Agent may also:
(i) require the Grantor to, and the Grantor hereby agrees that it
will at its expense and upon request of the Administrative Agent, promptly
assemble all, or such part, of the Collateral as directed by the
Administrative Agent and make such Collateral available to the
Administrative Agent at a place designated by the Administrative Agent,
which place shall be reasonably convenient to the Administrative Agent,
whether at the premises of the Grantor or otherwise;
(ii) enter, with or without process of law and without breach of
the peace, any premises where any of the Collateral or the books and
records of the Grantor related thereto are or may be located and, without
charge or liability to the Administrative Agent, seize and remove such
Collateral and such books and records from such premises, or remain upon
such premises and use the same for the purpose of enforcing any and all
rights and remedies of the Administrative Agent under this Security
Agreement, the Credit Agreement or any of the other Loan Documents; and
(iii) without notice, except as specified below, sell, lease,
assign, grant an
option or options to purchase or otherwise dispose of all or any part of
the Collateral in one or more parcels, at public or private sale or sales,
at any exchange, broker's board or at any of the Administrative Agent's
offices or elsewhere, at such prices as the Administrative Agent may deem
best, for cash, on credit or for future delivery, and upon such other
terms as the Administrative Agent may deem commercially reasonable;
PROVIDED, HOWEVER, that the Grantor shall not be credited with the net
proceeds of any such credit sale, future delivery or lease of the
Collateral until the cash proceeds thereof are actually received by the
Administrative Agent. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) Business Days' notice, or
such longer period as may be required by law, to the Grantor of the time
and place of any public sale, or the time after which any private sale is
to be made, shall constitute reasonable notification. No notification
required by law need be given to the Grantor if the Grantor has signed,
after the occurrence of an Event of Default, a statement renouncing any
right to notification of sale or other intended disposition. The
Administrative Agent shall not be obligated to make any sale of any of the
Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned. The Administrative Agent, any Lender and any of the Issuing
Banks shall have the right upon any such public sale or sales and, to the
extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Grantor, which right or equity is hereby
expressly waived and released. In the event of a sale of any Collateral,
or any part thereof, to a Lender, an Issuing Bank, or the Administrative
Agent upon the occurrence and during the continuance of an Event of
Default, such Lender, Issuing Bank, or the Administrative Agent shall not
deduct or offset from any part of the purchase price to be paid therefor
any indebtedness owing to it by the Grantor. Any and all proceeds received
by the Administrative Agent with respect to any sale of, collection from
or other realization upon all or any part of the Collateral, whether
consisting of monies, checks, notes, drafts, bills of exchange, money
orders or commercial paper of any kind whatsoever, shall be held by the
Administrative Agent and distributed by the Administrative Agent in
accordance with the Credit Agreement (including, without limitation,
SECTION 3.02(B)(II) thereof) and the Grantor shall remain liable for any
deficiency following the sale of the Collateral. Subject to the terms of
any applicable license agreement to which the Grantor is a party, the
Administrative Agent is hereby granted an irrevocable license or other
right to use, without charge, the Grantor's labels, copyrights, patents,
rights of use of any name, trade names, general intangibles, trademarks
and advertising matter, or any property of a similar nature, in completing
production of, advertising for sale and selling any Collateral.
(b) To the extent permitted by applicable law, the Grantor waives
all claims, damages and demands against the Administrative Agent, any Lender or
any Issuing Bank arising out of the repossession, retention or sale of the
Collateral, or any part or parts thereof, except any
such claims, damages and awards arising out of the gross negligence or willful
misconduct of the Administrative Agent.
(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
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 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 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.
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.
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.
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement or caused this Security Agreement to be executed and delivered by
their duly authorized officers as of the date first set forth above.
BARNEYS AMERICA, INC.
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
