EXHIBIT F
SECURITY AGREEMENT
Dated as of August 9, 1995
by
MISTIC BRANDS, INC.
in favor of
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
as Agent
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of August 9, 1995 (as amended,
supplemented or otherwise modified from time to time, this
"Agreement"), made by MISTIC BRANDS, INC., a corporation organized
under the laws of Delaware (the "Borrower") in favor of THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association, as agent (in such capacity, together with its
successors in such capacity, the "Agent") for the benefit of each
of the lenders (the "Lenders") signatory to the Credit Agreement
dated as of August 9, 1995 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") among the
Borrower, the Agent and the Lenders.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Credit Agreement and
the other Facility Documents, the Lenders have agreed to extend
credit to the Borrower upon the terms and subject to the
conditions set forth therein to be evidenced by the Notes issued
by the Borrower thereunder and the Letters of Credit issued
thereunder and to be guarantied by Triarc Companies, Inc., a
corporation organized under the laws of Delaware (the "Guarantor")
under the Unconditional Guaranty; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their extensions of credit to the Borrower under
the Credit Agreement that the Borrower shall have executed and
delivered this Agreement to the Agent to secure the obligations of
the Borrower under the Notes, the Letters of Credit, the Credit
Agreement and the other Facility Documents.
NOW, THEREFORE, in consideration of the premises and to
induce the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Loans and to purchase
Participating Interests in Letters of Credit issued under the
Credit Agreement, the Borrower hereby agrees with the Agent, as
follows:
ARTICLE 1. DEFINITIONS.
Unless otherwise defined herein, terms which are defined in
the Credit Agreement and used herein are so used as so defined;
and the following terms have the following meanings:
"Assigned Agreements" means each and every one of the leases,
contracts, permits, licenses, franchises and other agreements to
which the Borrower is a party or pursuant to which the Borrower
has been granted rights, including, without limitation, all supply
contracts, co-packer agreements, distribution agreements, all
Mistic Acquisition Documents, all leases and all policies of
property, casualty and liability insurance pursuant to which the
Borrower is a beneficiary.
"Code" means the Uniform Commercial Code as in effect in the
State of New York.
"Collateral" means all of the Borrower's right, title and
interest in and to all the following, whether now owned or
hereafter acquired:
(a) all of the Receivables;
(b) all of the Equipment;
(c) all of the General Intangibles and all of the
right, title and interest of the Borrower in and to, and all
benefits of the Borrower pursuant to, the Assigned Agreements;
(d) all of the Inventory;
(e) (i) all of the Borrower's right, title and interest
in and to the goods and other Property, including but not limited
to all merchandise returned or rejected by Customers, represented
by or securing any of the Receivables; (ii) all of the Borrower's
rights as a consignor, a consignee, an unpaid vendor, mechanic,
artisan, or other lienor, including stoppage in transit, setoff,
detinue, replevin and reclamation; (iii) all additional amounts
due to the Borrower from any Customer relating to the Receivables,
irrespective of whether such additional amounts have been
specifically assigned to the Agent; (iv) all of the Borrower's
right, title and interest in other Property, including warranty
claims, relating to any goods whatsoever securing this Agreement;
(v) if and when obtained by the Borrower, all of the Borrower's
interest in personal Property of third parties in which the
Borrower has been granted a lien or security interest as security
for the payment or enforcement of Receivables; and (vi) any other
goods or personal Property now owned or hereafter acquired in
which the Borrower has expressly granted a security interest or
may in the future grant a security interest to the Agent for the
ratable benefit of the Lenders, in any amendment or supplement
hereto;
(f) all cash held as cash collateral by the Agent or
any Lender to the extent not otherwise constituting Collateral, or
other cash or Property at any time on deposit with or held by the
Agent or any Lender for the account of the Borrower (whether for
safekeeping, custody, pledge, transmission or otherwise), all
present and future deposit accounts (whether time or demand or
interest or non-interest bearing) of the Borrower with the Agent
or any Lender or any other Person including those to which any
such cash may at any time or from time to time be credited, all
amounts and reinvestments (however evidenced) of amounts from time
to time credited to such accounts, and all interest, dividends,
distributions and other proceeds payable on or with respect to (A)
such investments and reinvestments and (B) such accounts; provided
that until a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have the right to withdraw all
such amounts from all such accounts not specifically designated as
cash collateral accounts without the consent of the Agent or such
Lender;
(g) all proceeds and products of the Collateral
referred to in the foregoing clauses (a), (b), (c), (d), (e), (f),
and in this clause (g), in whatever form, including, but not
limited to: cash, deposit accounts (whether or not comprised
solely of proceeds), certificates of deposit, insurance proceeds
(including, without limitation, hazard, flood and credit
insurance), negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements or documents;
and
(h) all of the Borrower's ledger sheets, files,
records, books of account, business papers, computers, computer
software and programs, and documents relating to the Collateral
referred to in the foregoing clauses (a), (b), (c), (d), (e), (f)
or (g).
"Customer" means the account debtor with respect to any of
the Receivables or the purchaser of goods, services or both with
respect to any contract or contract right, or any Person who
enters into any contract or other arrangement with the Borrower,
pursuant to which the Borrower is to deliver any personal Property
or perform any services.
"Equipment" means all of the Borrower's "equipment" (as such
term is defined in the Code) now owned or hereafter acquired and
wherever located, including, without limitation, all machinery,
furniture, furnishings, fixtures, parts, accessories and all
replacements and substitutions therefor or accessions thereto.
"General Intangibles" means all of the Borrower's choses in
action, causes of action and all other "general intangibles" (as
such term is defined in the Code) now owned or hereafter acquired,
including, without limitation, goodwill, customer lists,
copyrights, Trademarks, tradenames, tradestyles, equipment
formulations, manufacturing procedures, quality control
procedures, product specifications, patents, copyrights, licenses,
franchises and tax refund claims.
"Inventory" means all of the Borrower's "inventory" (as such
term is defined in the Code) now owned or hereafter acquired,
including, without limitation, all goods, merchandise and other
personal Property, whether tangible or intangible, wherever
located, furnished under any contract of service or held for sale
or lease, all raw materials, work in process, finished goods and
materials and supplies of any kind, nature or description which
are or might be used or consumed in the Borrower's business or
used in selling or finishing of such goods, merchandise and other
personal Property, and all documents of title or other documents
representing them.
"Permitted Liens" means and includes any Lien or Liens which
the Borrower is permitted, by the terms of the Credit Agreement,
to create, incur, assume or suffer to exist.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Receivables" means all of the Borrower's accounts, contract
rights, instruments, documents, chattel paper, general intangibles
relating to accounts, drafts and acceptances, and all other forms
of obligations owing to the Borrower arising out of or in
connection with the sale or lease of Inventory or for services
rendered, all guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created, and
whether or not specifically pledged or assigned to the Agent
hereunder or under any other Facility Document.
"Secured Obligations" means the unpaid principal of and
interest on (including interest accruing on or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Notes and all other obligations
and liabilities of any Obligor to the Agent or any Lender, whether
direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out
of, or in connection with, the Credit Agreement, any Note, any
Letter of Credit, any Interest Rate Protection Agreement to which
a Lender is a party, any other Facility Document and any other
document made, delivered or given in connection therewith or
herewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of
counsel to the Agent or any Lender) or otherwise.
"Security" has the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Trademarks" shall have the meaning assigned to such term in
the Trademark Security Agreement.
ARTICLE 2. COLLATERAL
Section 2.01. Grant of Security Interest. As security for
the payment by the Borrower of the Secured Obligations and the
performance by the Borrower of its other obligations and
undertakings under this Agreement and under the other Facility
Documents, the Borrower does hereby grant, bargain, convey,
assign, transfer, mortgage, hypothecate, pledge, confirm and grant
a continuing security interest to the Agent in and to all right,
title and interest of the Borrower (but none of its obligations)
in the Collateral.
Section 2.02. Collateral Assignment of Contract Rights. (a)
To the extent permitted by each Assigned Agreement, the Borrower
hereby assigns and transfers to the Agent, in trust, nevertheless,
for the benefit of the Lenders, as collateral security for the
Secured Obligations, all right, title and interest of the Borrower
in and to, and all benefits accruing to the Borrower pursuant to,
each of the Assigned Agreements; provided, however, that, unless
an Event of Default shall be continuing and the Agent shall have
given the Borrower written notice of its intention to enforce its
rights, on behalf of the Lenders, under this Section 2.02, the
Borrower shall have the right to exercise any and all of its
rights under the Assigned Agreements to the same extent as if this
Agreement had not been executed (including, without limitation,
the right to enter into possession of and use any and all Property
leased or licensed to the Borrower, as lessee or licensee, the
right to use any or all of the facilities made available to the
Borrower and the right to make all waivers and agreements, to give
all notices, consents and releases, to take all action upon the
happening of any default giving rise to a right in favor of the
Borrower, under any of the Assigned Agreements, and to do any and
all other things whatsoever which the Borrower is or may become
entitled to do under any of the Assigned Agreements, including,
without limitation, the right to terminate or not renew any of the
Assigned Agreements); and provided, further, that during the
continuance of any Event of Default, upon written notice to the
Borrower, the Agent shall, to the extent permitted by each
Assigned Agreement, have the right to exercise any and all of the
Borrower's rights under the Assigned Agreements (including,
without limitation, all rights set forth in the parenthetical in
the immediately preceding proviso). The Borrower shall make a
good faith and reasonable effort to insert appropriate provisions
and to avoid the insertion of prohibitions or restrictions so that
each Assigned Agreement may be freely assignable and transferable.
(b) This Agreement is executed as security for the
Secured Obligations, and, therefore, the execution and delivery of
this Agreement shall not subject the Agent to, or transfer or pass
to the Agent, or in any way affect or modify, the liability of the
Borrower under any or all of the Assigned Agreements, it being
understood and agreed that notwithstanding this Agreement, all of
the obligations of the Borrower to each and every other party
under each and every one of the Assigned Agreements shall be and
remain enforceable by such other party, its successors and
assigns, against, but only against, the Borrower or Persons other
than the Agent, the Lenders and their respective successors and
assigns.
(c) To further protect the security afforded by this
Agreement, the Borrower agrees, subject to paragraph (a) above, as
follows:
(i) the Borrower will faithfully abide by, perform
and discharge each and every obligation, covenant, condition, duty
and agreement pursuant to each or any of the Assigned Agreements
the non-performance of which could reasonably be expected to have
a Material Adverse Effect;
(ii) the Borrower shall not amend, modify,
otherwise change or terminate any Assigned Agreement if such
amendment, modification, other change or termination could
reasonably be expected to have a Material Adverse Effect;
(iii) at the Borrower's sole cost and expense,
the Borrower will appear in and defend any action or proceeding
arising under, growing out of or in any manner connected with the
obligations, covenants, conditions, duties, agreements or
liabilities of the Borrower under any of the Assigned Agreements,
the non-performance of which could reasonably be expected to have
a Material Adverse Effect; and
(iv) should the Borrower fail to make any payment,
do any act or refrain from any act which this Agreement requires
the Borrower to make, do or refrain from, then the Agent may, upon
reasonable prior written notice to the Borrower (unless, in the
reasonable judgment of the Agent, the security provided hereby,
including the Collateral, taken as a whole, may be materially
harmed or impaired as a result of the Borrower's failure to pay,
act or refrain from acting, in which case the Agent need not so
notify the Borrower), but the Agent shall have no obligation to
(and shall not thereby release the Borrower from any obligation
hereunder), make, do or prevent the same in such manner and to
such extent as the Agent may deem necessary or advisable to
protect the security provided hereby, which rights of the Agent
shall specifically include, without limiting the Agent's general
powers herein granted, the right to appear in and defend any
action or proceeding purporting to affect the security hereof and
the rights or powers of the Agent hereunder (or any of them), and
upon the occurrence and during the continuance of an Event of
Default, the right to perform and discharge each and every one, or
any one or more, of the obligations, covenants, conditions, duties
and agreements of the Borrower contained in any one or more of the
Assigned Agreements; in exercising any such powers, the Agent may
pay necessary or advisable costs and expenses, employ counsel and
incur and pay reasonable attorneys' fees, and the Borrower will
reimburse the Agent for such costs, expenses and fees after
delivery of invoices or other evidences of the same.
Section 2.03. Sharing of Collateral. The Collateral shall
be held subject to the conditions and agreements in this Agreement
and in the other Facility Documents set forth for the common and
equal use, benefit and security of all and singular Person or
Persons who shall from time to time be Lenders and, except to the
extent specifically set forth in the Credit Agreement, without
preference of any of the Secured Obligations over any of the
others by reason of priority in time of issue, sale or negotiation
thereof or otherwise howsoever.
ARTICLE 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
CONCERNING SECURITY
Section 3.01. Representations and Warranties. The Borrower
hereby represents and warrants:
(a) The Collateral in which the Borrower holds an
interest is owned solely by the Borrower and no other Person has
any right, title, interest, claim or Lien, other than Permitted
Liens.
(b) The Liens granted pursuant to this Agreement
constitute perfected Liens on the Collateral in favor of the
Agent, for the ratable benefit of the Lenders, which are prior to
all other Liens on the Collateral created by the Borrower and in
existence on the date hereof, other than Permitted Liens, and
which are enforceable as such against all creditors of and
purchasers from the Borrower and its predecessors in interest.
(c) No amount payable to the Borrower under or in
connection with any Receivable is evidenced by any instrument or
chattel paper which has not been delivered to the Agent. No
amount payable to the Borrower under or in connection with any
Assigned Agreement is evidenced by any instrument which has not
been delivered to the Agent.
Section 3.02. Sale of Collateral; Liens. Except as
specifically permitted herein or by the other Facility Documents,
the Borrower
(a) will not sell, assign or otherwise transfer any of
the Collateral,
(b) will keep all Collateral in existence on the date,
and all Collateral acquired after the date, of execution of this
Agreement, free from all Liens other than Permitted Liens, and
(c) will pay and discharge, when due, all taxes, levies
and other charges upon any Collateral, and shall defend all
Collateral against all claims of any Person (other than, with
respect to any Permitted Lien, the holder thereof) other than the
Agent, except if they are being contested in good faith by
appropriate proceedings and for which appropriate reserves are
maintained.
Section 3.03. Collection of Receivables. The Borrower may
collect its Receivables, but only until such time as the Agent
shall exercise its right under Section 4.02(b) to notify Customers
or other third parties to pay amounts owing under such Receivables
directly to the Agent. Upon the occurrence and during the
continuance of an Event of Default, the Borrower agrees to take
such action with respect to the collection of its Receivables and
the proceeds thereof as the Agent may direct.
Section 3.04. Offices, Location of Collateral, etc. (a) The
office where the Borrower keeps its records concerning the
Collateral and the Borrower's principal place of business and
chief executive office are located at are set forth in Part 1 of
Schedule A hereto; all of the Borrower's other places of business
are located at the addresses set forth in Part 2 of Schedule A
hereto and the Collateral is currently located only at the
locations referred to in this Section 3.04, except that certain
item(s) of Equipment and Inventory are located at the places
specified for such items in Part 3 of Schedule A hereto.
(b) Without the prior written consent of the Agent
(which consent shall not be unreasonably withheld or delayed), the
Borrower will not change the location of its chief executive
office; provided, however, that the Borrower may, upon not less
than thirty (30) days' prior written notice to the Agent, relocate
its chief executive office to any location in any jurisdiction in
the United States (each such jurisdiction being hereinafter
called a "Permitted Jurisdiction").
(c) The Borrower may relocate any item(s) of Inventory
or Equipment within (i) any Permitted Jurisdiction, and (ii) any
other jurisdiction so long as (in the case of this clause (ii)),
the Agent shall have a perfected first priority security interest
(or, if applicable, the foreign equivalent thereof) in such
item(s) and the aggregate value of such item(s) in such foreign
jurisdictions does not exceed 10% of the aggregate value of all
such item(s); provided, however, that the Borrower provides notice
of such relocation to the Agent on or before the date that is 60
days after such relocation took place.
The Borrower will with respect to each and every relocation of the
Borrower's chief executive offices or any item(s) of the
Collateral, take such action, at the Agent's reasonable request
and direction and at the Borrower' expense as provided in Section
3.09 (and including, without limitation, the preparation and
filing where appropriate of new or amended financing statements),
as may then be necessary or desirable to ensure the uninterrupted
continuation of the Agent's security interest in all of the
Collateral with the same priority as it had prior to any such
relocation.
Section 3.05. Financing Statements. The Borrower hereby
agrees to execute such financing statements as the Agent may
reasonably request, and to take such other action (including,
without limitation, the execution and filing, at its own expense,
of all continuation statements) as may be required to perfect and
to keep perfected the Agent's security interest in, and Lien upon,
the Collateral, and, unless prohibited by law, the Borrower hereby
authorizes the Agent to execute and file any such financing
statements and continuation statements on behalf of the Borrower.
Section 3.06. Insurance for Collateral. The Borrower agrees
to maintain, or cause to be maintained, policies of insurance as
required by the Credit Agreement, and to deliver to the Agent one
or more certificates evidencing such policies naming the Agent as
loss payee (and to the extent such policies are provided by co-
packers utilized by the Borrower, the Borrower shall use good
faith and reasonable efforts to ensure that the Agent is named as
loss payee thereunder) and, if requested by the Agent, the
certified copies of such policies. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give
not less than thirty (30) days' notice to the Agent in the event
of cancellation of the policy for any reason whatsoever and a
clause that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Borrower nor by the
occupation of the premises where the Collateral is located for
purposes more hazardous than are permitted by such policy. If the
Borrower fails to provide such insurance, the Agent may, at the
Borrower's expense, procure the same, but shall not be required to
do so. The Borrower agrees to deliver to the Agent, promptly as
rendered, two copies of all reports made to any insurance company
by it that relate to the Collateral.
Section 3.07. Certain Information, etc. The Borrower will
deliver to the Agent at such times and in such form as shall be
reasonably designated by the Agent, assignments, schedules and
reports relating to the Collateral, and will furnish such other
information relevant to the Collateral as the Agent shall from
time to time reasonably request, including, without limitation,
the original delivery or other receipts for Inventory sold and
duplicate invoices relating to the Receivables. At the request of
the Agent, the Borrower will also promptly deliver to the Agent
any and all bills of sale for, certificates of title to or other
comparable evidence of ownership of, each item of the Equipment.
The Borrower will mark its books and records to reflect the
security interest of the Agent in Receivables and General
Intangibles.
Section 3.08. Protection of Collateral; Reimbursement. All
expenses of protecting, storing, warehousing, insuring, handling,
maintaining and shipping the Collateral, and all excise, property,
sales and use taxes imposed by any state, federal or local
authority on any of the Collateral or in respect of the sale
thereof shall be borne and paid by the Borrower; and if the
Borrower fails so to pay any portion thereof when due unless such
taxes are being contested in good faith by appropriate proceedings
and for which appropriate reserves are maintained, the Agent may,
after notice to the Borrower and opportunity to cure, at its
option, but shall not be required to, pay the same and charge the
Borrower therefor, and the Borrower agrees to reimburse promptly
the Agent therefor with interest at a rate equal to the Default
Rate. The Borrower shall pay all sums so paid or incurred by the
Agent for any of the foregoing and all costs and expenses
(including reasonable attorneys' fees, legal expenses and court
costs) that the Agent may reasonably incur in evaluating,
asserting, enforcing, defending or protecting its Lien on, or
rights and interest in, the Collateral, or any of its rights or
remedies under this Agreement or any other Facility Document, and,
until paid by the Borrower such sums shall be considered as
additional obligations owing by the Borrower under this Agreement
and, as such, shall be secured by all of the Collateral and the
proceeds from the sale thereof and by any and all other
collateral, security, assets, reserves or funds of the Borrower in
or coming into the hands of or inuring to the benefit of the
Agent. Subject to the provisions of the Credit Agreement and
except to the extent limited by applicable law, the Agent shall
not be liable or responsible in any way for the safekeeping of the
Collateral or for any loss or damage thereto (except any loss or
damage caused by the gross negligence or willful misconduct of the
Agent) or for any diminution in the value thereof, or any act or
default of any warehouseman, carrier, forwarding agency or other
Person.
Section 3.09. Further Assurances. So long as any of the
Secured Obligations or any Commitment shall be outstanding upon
the written request of the Agent, the Borrower, at its expense,
will timely execute, acknowledge, deliver, file and record, or
will cause to be executed, acknowledged, delivered, filed or
recorded, all such further instruments, deeds, conveyances,
mortgages, transfers, financing statements, continuation
statements and assurances as may be necessary or appropriate (and,
in any event, as may be reasonably requested by the Agent) to
subject to the Lien of this Agreement, and to preserve, continue
and protect the Lien of this Agreement on, the Collateral,
including, without limitation, any Collateral acquired after the
date of this Agreement, and for perfecting the Agent's rights in,
every part of the Collateral, or as may be required in order to
transfer to, or perfect the rights of any new agent or agents in,
the Collateral.
ARTICLE 4. DEFAULTS -- REMEDIES
Section 4.01. Nature of Events. An "Event of Default" shall
exist if any Event of Default under, and as defined in, the Credit
Agreement occurs and is continuing.
Section 4.02. Default Remedies. (a) If an Event of Default
exists and is continuing, the Agent may exercise all of the rights
and remedies conferred in this Agreement and in each of the other
Facility Documents, it being expressly understood that no such
remedy is intended to be exclusive of any other remedy or
remedies; but each and every remedy shall be cumulative and shall
be in addition to every other remedy given in this Agreement or
now or hereafter existing at law or in equity or by statute, and
may be exercised from time to time as often as may reasonably be
deemed expedient by the Agent.
(b) If an Event of Default exists and is continuing,
the Agent shall have the right, at any time and from time to time
during such default period, (i) to notify all Customers and other
third parties holding or otherwise concerned with the Collateral
that Receivables have been assigned to the Agent and that the
Agent has a security interest therein; (ii) to direct all such
Persons to make payments to the Agent of all or any part of the
sums owing the Borrower by such Persons; (iii) to enforce
collection of any of the Receivables by suit or otherwise; (iv) to
surrender, release or exchange all or any part of such
Receivables; or (v) to compromise, settle, extend or renew for any
period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby.
(c) If an Event of Default exists and is continuing,
the Agent shall have the right, at any time or from time to time
during such default period, to take immediate possession of any or
all Collateral that is tangible personal Property, and may require
the Borrower to assemble such Collateral, at the expense of the
Borrower, and to make it available to the Agent at a place to be
designated by the Agent that is reasonably convenient to both
parties, and may enter any of the premises of the Borrower with or
without force or process of law, and keep and store the same on
such premises until sold (and if such premises be the Property of
the Borrower, the Borrower agrees not to charge the Agent for
storage thereof for a period of at least ninety (90) days after
sale or disposition of such Collateral).
(d) The Borrower and the Agent agree that ten (10)
Banking Days' prior written notice to the Borrower of any public
or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such
reasonable locations as the Agent shall designate in such notice.
Except as expressly set forth in any Facility Document, any other
requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived by the Borrower. Sales for cash,
or on credit to a wholesaler, retailer or user of the Collateral,
at any public or private sale, if made in good faith, are all
hereby deemed (without limitation) to be commercially reasonable
(as defined in the Code). The Agent shall have the right to bid
at any such sale on behalf of any one or more Lenders (who shall
also have the right to bid individually). Proceeds arising from
any such sale shall be applied to the repayment of the Secured
Obligations in the manner set forth in the Credit Agreement.
(e) If an Event of Default exists and is continuing,
the Agent may also, with or without proceeding with sale or
foreclosure or demanding payment of the Secured Obligations,
without prior notice, appropriate and apply to the payment of the
Secured Obligations and the other obligations secured under this
Agreement any and all Collateral in its possession and any and all
balances, credits, deposit accounts, reserves or other moneys due
or owing to the Borrower held by the Agent under this Agreement or
otherwise. The Agent shall promptly notify the Borrower of any
such appropriation by the Agent.
(f) Anything in this Agreement contained to the
contrary notwithstanding, and in view of the fact that federal and
state securities laws may impose certain restrictions on the
method by which a sale of the Collateral that consists of
Securities may be effected after an Event of Default, the Borrower
agrees that upon the occurrence and during the existence of an
Event of Default, the Agent may, from time to time, attempt to
sell all or any part of such Collateral by means of a private
placement restricting the bidders and prospective purchasers to
those who will represent or agree as to their investment intent or
method of resale or both in a manner reasonably required by the
Agent to assure compliance with applicable securities laws. The
Agent shall give the Borrower written notice prior to making any
such offer of any such Collateral. Each of the Agent and the
Borrower may solicit offers to buy such Collateral, or any part of
it, for cash, from a limited number of investors deemed by the
Agent, in its reasonable business judgment, to be responsible
parties who might be interested in purchasing such Collateral, and
if the Agent and the Borrower collectively solicit such offers
from not less than five (5) such investors, then the acceptance by
the Agent of the highest offer obtained therefrom shall be deemed
to be a commercially reasonable method of disposition (as defined
in the Code) of such Collateral unless applicable law provides
otherwise.
(g) All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of the Borrower
contained in this Agreement or any other Facility Document or
contained in any agreement supplementary to this Agreement or any
other Facility Document, shall be deemed cumulative to and not in
derogation or substitution of any of the terms, covenants,
conditions or agreements of the Borrower contained in this
Agreement or any other Facility Document.
(h) The Borrower will pay to the Agent all reasonable
expenses (including court costs and reasonable attorneys' fees and
expenses) of, or incident to, the enforcement of any of the
provisions of this Agreement and all other charges due against the
Collateral, including, without limitation, taxes (other than
income taxes imposed upon the Agent in connection therewith),
assessments, security interests, Liens or encumbrances upon the
Collateral and any expenses, including transfer or other similar
taxes, arising in connection with any sale, transfer or other
disposition of Collateral.
Section 4.03. Other Enforcement Rights. The Agent may
proceed to protect and enforce this Agreement by suit or suits or
proceedings in equity, at law or in bankruptcy, and whether for
the specific performance of any covenant or agreement in this
Agreement contained or in execution or aid of any power in this
Agreement granted, or for foreclosure under this Agreement, or for
the appointment of a receiver or receivers for the Collateral or
any part thereof, for the recovery of judgment for the obligations
secured by this Agreement or for the enforcement of any other
proper, legal or equitable remedy available under applicable law.
Section 4.04. Effect of Sale, etc. (a) Any sale or sales
pursuant to the provisions of this Agreement, whether under any
right or power granted hereby or thereby or pursuant to any legal
proceedings, shall operate to divest the Borrower of all right,
title, interest, claim and demand whatsoever, either at law or in
equity, of, in and to the Collateral, or any part thereof, so
sold, and any Property so sold shall be free and clear of any and
all rights of redemption by, through or under the Borrower. At
any such sale any Lender may bid for and purchase the Property
sold and may make payment therefor as set forth in clause (b) of
this Section 4.04, and any such Lender so purchasing any such
Property, upon compliance with the terms of sale, may hold, retain
and dispose of such Property without further accountability.
(b) The receipt by the Agent, or by any Person
authorized under any judicial proceedings to make any such sale,
of the proceeds of any such sale shall be a sufficient discharge
to any purchaser of the Collateral, or of any part thereof, sold
as aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the
event that, at any such sale, any Lender is the successful
purchaser, it shall be entitled, for the purpose of making
settlement or payment, to use and apply such Collateral to its
Secured Obligations by crediting thereon the net proceeds of such
sale.
Section 4.05. Delay or Omission; No Waiver. No course of
dealing on the part of the Agent nor any delay or failure on the
part of the Agent to exercise any right shall impair such right or
operate as a waiver of such right or otherwise prejudice the
Agent's rights, powers and remedies. No waiver by the Agent of
any Default or Event of Default, whether such waiver be full or
partial, shall extend to or be taken to affect any subsequent
Default or Event of Default, or to impair the rights resulting
therefrom except as may be otherwise expressly provided in this
Agreement. Upon the occurrence and during the existence of an
Event of Default, every right and remedy given by this Agreement,
by any other Facility Document or by law to the Agent may be
exercised from time to time as often as may be deemed expedient by
the Agent.
Section 4.06. Restoration of Rights and Remedies. If the
Agent shall have instituted any proceeding to enforce any right or
remedy under this Agreement or under any other Facility Document
and such proceeding shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Agent,
then and in every such case the Agent, the Borrower and the
Lenders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions
under this Agreement and under the other Facility Documents, and,
unless otherwise determined in such proceeding, thereafter all
rights and remedies of the Agent shall continue as though no such
proceeding had been instituted.
Section 4.07. Application of Proceeds. The proceeds of any
exercise of rights with respect to the Collateral, or any part
thereof, and the proceeds and the avails of any remedy under this
Agreement shall be paid to and applied in accordance with the
provisions of the Credit Agreement. If there is a deficiency, the
Borrower shall, subject always to the other provisions of this
Agreement, remain liable therefor and shall forthwith pay the
amount of any such deficiency to the Agent. If there is an
excess, such excess shall be returned to the Borrower.
Section 4.08. Waivers by the Borrower. (a) To the extent
permitted by applicable law, the Borrower hereby waives notice of
acceptance of this Agreement and of extensions of credit, loans,
advances or other financial assistance under the Facility
Documents or under any other agreement, note, document or
instrument now or at any time or times hereafter executed by the
Borrower and delivered to the Agent or any Lender in connection
with or pursuant to a Facility Document. To the extent permitted
by applicable law, the Borrower further waives presentment and
demand for payment of any of the Secured Obligations, protest and
notice of dishonor or default with respect to any of the Secured
Obligations, and all other notices to which the Borrower might
otherwise be entitled, except as otherwise expressly provided in
this Agreement or in the other Facility Documents.
(b) The Borrower (to the extent that it may lawfully do
so) covenants that it will not at any time insist upon or plead,
or in any manner claim or take the benefit or advance of, any stay
(except in connection with a pending appeal or the automatic stay
imposed under 11 U.S.C. Section 362 or any successor or replacement
thereof), valuation, appraisal, redemption or extension law now or
at any time hereafter in force that, but for this waiver, might be
applicable to any sale made under any judgment, order or decree
based on this Agreement or any other Facility Document; and the
Borrower (to the extent that it may lawfully do so) hereby
expressly waives and relinquishes all benefit and advance of any
and all such laws and hereby covenants that it will not hinder,
delay or impede the execution of any power in this Agreement or
therein granted and delegated to the Agent, but that it will
suffer and permit the execution of every such power as though no
such law or laws had been made or enacted.
Section 4.09. Consent. The Borrower hereby consents that
from time to time, before or after the occurrence or existence of
any Event of Default, with or without notice to or assent from the
Borrower, any security at any time held by or available to the
Agent for any of the Secured Obligations, or any other security at
any time held by or available to the Agent for any obligation of
any other Person secondarily or otherwise liable for any of the
Secured Obligations, may be exchanged, surrendered, or released,
and the Borrower shall remain bound under this Agreement
notwithstanding any such exchange, surrender or release.
ARTICLE 5. DEFEASANCE
Section 5.01. Satisfaction and Discharge. If the Borrower
shall pay and discharge the entire indebtedness on all Secured
Obligations outstanding by paying or causing to be paid the
principal of, and interest on, all Secured Obligations
outstanding; and if the Borrower shall also pay or cause to be
paid all other sums payable under this Agreement with respect to
the Secured Obligations and all sums payable under any one or more
of the other Facility Documents; and if all Commitments shall have
been terminated, then and in that case all of the right, title and
interest of the Agent in the Collateral created hereby shall cease
and terminate, and thereupon the Agent, upon written request of
the Borrower, shall forthwith execute and deliver, without
recourse, proper deeds, assignments and other instruments
acknowledging satisfaction or and discharging all of the right,
title and interest of the Agent in the Collateral created hereby
(subject to any disposition thereof that may have been previously
made by the Agent pursuant to any of the Facility Documents).
Section 5.02. Disposal of Assets; Release of Lien. So long
as no Default or Event of Default shall exist and be continuing or
be created as a result thereof, if the Borrower shall sell, lease,
transfer or otherwise dispose of its Property in accordance with
the provisions of the Credit Agreement, then the Agent, upon
payment to it of all amounts then due and owing as fees and
expenses under this Agreement, shall forthwith execute proper
instruments releasing the interests in such Property so disposed
of from the Lien of the Agent created under this Agreement.
ARTICLE 6. MISCELLANEOUS
Section 6.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this
Agreement may be amended or modified only by an instrument in
writing signed by the Borrower, the Agent and the Required
Lenders, or by the Borrower and the Agent acting with the consent
of the Required Lenders and any provision of this Agreement may be
waived by the Required Lenders or by the Agent acting with the
consent of the Required Lenders; provided that no amendment,
modification or waiver shall, unless by an instrument signed by
all of the Lenders or by the Agent acting with the consent of all
of the Lenders: (a) permit the creation of any Lien with respect
to any of the Collateral (other than Permitted Liens) that is
prior or equal to the Lien of the Agent; (b) effect the
deprivation of any Lender of the benefit of any Lien upon all or
any part of the Collateral; (c) create any priority with respect
to any portion of the Secured Obligations over any other portion
with respect to the Lien upon all or any part of the Collateral;
or (d) amend, waive or modify the definition of Secured
Obligations.
Section 6.02. Survival. The obligations of the Borrower
under Section 3.08 or Section 4.02(h) shall survive the repayment
of the Secured Obligations and the termination of the Commitments.
Section 6.03. Successors and Assigns. This Agreement shall
be binding upon, and shall inure to the benefit of, the Borrower,
the Lenders and their respective successors and assigns.
Section 6.04. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this
Section, and except as otherwise provided in this Agreement,
notices shall be given to the Agent in writing, by telex, telecopy
or other writing or by telephone, confirmed by telex, telecopy or
other writing, and to the Lenders and to the Borrower by ordinary
mail, hand delivery, overnight courier or telecopier addressed to
such party at its address on the signature page of the Credit
Agreement. Notices shall be effective: (a) if given by mail, 72
hours after deposit in the mails with first class postage prepaid,
addressed as aforesaid; and (b) if given by telecopier, when
confirmation of delivery of the telecopy is transmitted to the
telecopier number as aforesaid is transmitted; provided that
notices to the Agent and the Lenders shall be effective upon
receipt.
SECTION 6.05. JURISDICTION; IMMUNITIES. (A) EACH OF THE
BORROWER AND THE AGENT HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND EACH OF THE BORROWER AND
THE AGENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR FEDERAL COURT. EACH OF THE BORROWER AND THE AGENT
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS
TO EACH OF THE BORROWER AND THE AGENT AT ITS ADDRESS SPECIFIED IN
SECTION 6.04. EACH OF THE BORROWER AND THE AGENT AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OF THE
BORROWER AND THE AGENT FURTHER WAIVES ANY OBJECTION TO VENUE IN
SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH
STATE ON THE BASIS OF FORUM NON CONVENIENS. THE BORROWER FURTHER
AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE AGENT OR
ANY LENDER SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN NEW YORK COUNTY. EACH OF THE
BORROWER AND THE AGENT WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.
(b) Nothing in this Section 6.05 shall affect the right
of the Borrower, the Agent or any Lender to serve legal process in
any other manner permitted by law or affect the right of the Agent
or any Lender to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process (whether from service or notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.
Section 6.06. Headings. The headings and captions hereunder
are for convenience only and shall not affect the interpretation
or construction of this Agreement.
Section 6.07. Severability. The provisions of this
Agreement are intended to be severable. If for any reason any
provision of this Agreement shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
Section 6.08. Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may
execute this Agreement by signing any such counterpart.
SECTION 6.09. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 6.10. Subject to the Credit Agreement. Any and all
rights granted to the Agent under this Agreement are to be held
and exercised by the Agent for the benefit of the Lenders,
pursuant to the provisions of the Credit Agreement. To the extent
set forth in the Facility Documents, each of the Lenders shall be
a beneficiary of the terms of this Agreement. Any and all
obligations under this Agreement of the parties to this Agreement,
and the rights granted to the Agent under this Agreement, are
created and granted subject to the terms of the Credit Agreement.
Section 6.11. Power of Attorney. The Borrower hereby makes,
constitutes and appoints the Agent the true and lawful agent and
attorney in fact of the Borrower, with full power of substitution
(a) if an Event of Default exists and is continuing,
and to the fullest extent permitted by applicable law, to receive,
open and dispose of all mail addressed to the Borrower relating to
the Collateral and remove therefrom any notes, checks,
acceptances, drafts, money orders or other instruments included in
the Collateral, with full power to endorse the name of the
Borrower upon any such notes, checks, acceptances, drafts, money
orders, instruments or other documents relating to the Collateral
and to effect the deposit and collection thereof, and the further
right and power to endorse the name of the Borrower on any
document relating to the Collateral;
(b) if an Event of Default exists and is continuing, to
sign the name of the Borrower to drafts against its debtors, to
notices to such debtors, to assignments and notices of
assignments, financing statements, continuation statements or
other public records or notices and all other instruments and
documents; and
(c) to do any and all things necessary to take such
action in the name and on behalf of the Borrower to carry out the
provisions of this Agreement, including, without limitation, the
grant of the security interest granted to the Agent with respect
to the Collateral and the Agent's rights created under this
Agreement after a request by the Agent to take any action, and the
failure or refusal of the Borrower to comply with such request
within five (5) Banking Days.
The Borrower agrees, in the absence of willful wrongdoing or gross
negligence, that neither the Agent nor any of its agents,
designees or attorneys-in-fact will be liable for any acts of
commission or omission, or for any good faith error of judgment or
mistake of fact or law with respect to the exercise of the power
of attorney granted under this Section 6.11. The power of
attorney granted under this Section 6.11 is coupled with an
interest and shall be irrevocable so long as any Secured
Obligation, Letter of Credit or Commitment remains outstanding.
Section 6.12. Term of Agreement. This Agreement shall be
and remain in full force and effect so long as any Secured
Obligation, Letter of Credit or Commitment is outstanding.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
BORROWER:
MISTIC BRANDS, INC.
By:
Name:
Title:
AGENT:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name:
Title: