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INVENTORY AND EQUIPMENT SECURITY AGREEMENT
SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT
[SECURITY AGREEMENT]
Congress Financial Corporation
1133 Avenue of the Americas
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Xxx Xxxx, Xxx Xxxx 00000
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entlemen:
This Inventory and Equipment Security Agreement ("Supplement") is a
supplement to the Accounts Financing Agreement [Security Agreement] between
us, dated of even date herewith (the "Agreement"). This Supplement is (a)
hereby incorporated into the Agreement, (b) made a part thereof and (c)
subject to the other terms, conditions, covenants and warranties thereof. All
terms (including capitalized terms) used herein shall have the meanings
ascribed to them respectively in the Agreement, unless otherwise defined in
this Supplement. See Rider annexed hereto for language to be inserted after
the asterisks in applicable Sections hereof.
SECTION 1. ADDITIONAL SECURITY INTEREST.
As additional security for the prompt performance, observance and
payment in full of all Obligations, we hereby grant to you a continuing
security interest in, a lien upon, and a right of setoff against, and we
hereby assign, transfer, pledge and set over to you the following (which is
and shall be deemed part of the Collateral as defined and used in the
Agreement):
1.1. All raw materials, work in process, finished goods, and all other
inventory of whatsoever kind of nature, wherever located, whether now owned
or hereafter existing or acquired by us * ("Inventory"), including without
limitation, all wrapping, packaging, advertising, shipping materials, and all
other goods consumed in our business, all labels and other devices, names or
marks affixed or to be affixed thereto for purposes of selling or of
identifying the same or the seller or manufacturer thereof and all of our
right, title and interest therein and thereto;
1.2. All equipment, machinery, computers and computer hardware,
vehicles, tools, dies, jigs, furniture, trade fixtures and fixtures; all
attachments, accessions and property now or hereafter affixed thereto or used
in connection therewith, substitutions and replacements thereof, wherever
located, whether now owned or hereafter acquired by Borrower ("Equipment");
1.3. All books, records, documents, other property and general
intangibles at any time relating to the Inventory and the Equipment; and
1.4. All products and proceeds of the foregoing, in any form,
including, without limitation, insurance proceeds and any claims against
third parties for loss or damage to or destruction of any or all of the
foregoing.
SECTION 2. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
We hereby represent, warrant and covenant to you the following (which
shall survive the execution and delivery of this Supplement), the truth and
accuracy of which, and compliance with, being a continuing condition of the
making of loans by you under the Agreement or any other supplement thereto:
2.1. We are and shall be, with respect to the Equipment, the owner of
such Equipment free from any lien, security interest, claim and encumbrance
of any kind, except in your favor and as set forth on Exhibit A if any,
annexed hereto and made a part hereof.
2.2. The only locations of any Collateral are those addresses listed on
Exhibit B annexed hereto and made a part hereof. Exhibit B sets forth the
owner and/or operator of the premises at such addresses for all locations
which we do not own and operate and all mortgages, if any, with respect to
the premises. We shall not remove any Collateral from such locations, without
your prior written consent, except for sales of Inventory in the ordinary
course of our business. *
2.3. We shall at all times maintain, with financially sound and
reputable insurers, casualty and hazard insurance with respect to the
Collateral for not less than its full market value and against all risks to
which it may be exposed. All such insurance policies shall be in such form,
substance, amounts and coverage as may be * satisfactory to you and shall
provide for ** days' minimum prior cancellation notice in writing to you. You
may act as attorney for us in obtaining, adjusting, settling, amending and
cancelling such insurance. We shall promptly (a) obtain endorsements to all
existing and future insurance policies with respect to the Collateral
specifying that the proceeds of such insurance shall be payable to you and us
as our interests may appear and further specifying that you shall be paid
regardless of any act, omission or breach of warranty by us, (b) deliver to
you an original executed copy of, or executed certificate of the insurance
carrier with respect to, such endorsement and, at your request, the original
or a certified duplicate copy of the underlying insurance policy, and (c)
deliver to you such other evidence which is satisfactory to you of compliance
with the provisions hereof.
2.4. We shall promptly notify you in writing of the details of any
loss, damage, investigation, action, suit, proceeding or claim relating to
the Collateral or which would result in any material adverse change in our
business, properties, assets, goodwill or condition, financial or otherwise.
2.5. At your option, you may apply any insurance monies received at any
time to the cost of repairs to or replacement for the Inventory and/or
Equipment and/or to payment of any of the Obligations, whether or not due, in
any order and in such manner as you, in your sole discretion, may determine.
2.6. Upon your * request, at any time and from time to time, we shall,
at our sole cost and expense, execute and deliver to you written reports or
appraisals as to the Inventory and Equipment listing all items and categories
thereof, describing the condition of same and setting forth the value thereof
(the lower of cost or market value of the Inventory and the lower of net cost
less depreciation, fair market value and/or liquidation value of the
Equipment), in such form as is satisfactory to you.
2.7. We shall, at our own expense, keep the Equipment in first class
order, repair, running and marketable condition.
2.8. We shall (a) use, store and maintain the Inventory and the
Equipment with all reasonable care and caution, and (b) use the Inventory and
Equipment for lawful purposes only and in conformity * with applicable laws,
ordinances and regulations.
2.9. All Inventory shall be produced in accordance with the
requirements of the Federal Fair Labor Standards Act of 1938, as amended and
all * rules, regulations and orders related thereto.
2.10. The Inventory and the Equipment are and shall be used in our
business and not for personal, family, household or farming use.
2.11. The Equipment is now and shall remain personal property and we
shall not permit any of the Equipment to be or become a part of or affixed to
real property without (a) prior written notice to you and your written
consent and (b) first making all arrangements, and delivering or causing to
be delivered to you, such agreements and other documentation requested by you
for the protection and preservation of your security interests and liens, in
form and satisfactory to you, including, without limitation, waivers and
subordination agreements by any landlords or mortgages of statutory and
non-statutory liens and rights of distraint.
2.12. We assume all responsibility and liability arising from or
relating to the use, sale or other disposition of the Inventory and the
Equipment.
SECTION 3. ADDITIONAL REMEDIES.
Upon the occurrence of an Event of Default and at any time thereafter,
you shall have the right (in addition to any other rights you may have under
the Agreement, this Supplement or otherwise), without notice to us, at any
time and from time to time, in your discretion, with or without judicial
process or the aid or assistance of others and without cost to you:
3.1. To enter upon any premises on or in which any of the Inventory or
Equipment may be located and, without resistance or interference by us, take
possession of the Inventory and the Equipment;
3.2. To complete processing, manufacturing and repair of all or any
portion of the Inventory;
3.3. To sell, foreclose or otherwise dispose of any part or all of the
Inventory and the Equipment on or in any of our premises or premises of any
other party;
3.4. To require us, at our expense, to assemble and make available to
you any part or all of the Inventory and the Equipment at any place and time
* designated by you; and
3.5. To remove any or all of the Inventory and the Equipment from any
premises on or in which the same may be located, for the purpose of effecting
the sale, foreclosure or other disposition thereof or for any other purpose
(and if any of the Inventory or the Equipment consists of motor vehicles, you
may use our registrations and license plates).
IN WITNESS WHEREOF, we have caused these presents to be duly executed
this 16th day of June, 1992.
By: I.C. XXXXXX & COMPANY, INC.
By: ISBUYCO, INC., General Partner
By: /s/ Xxxxxx X. Xxxxx
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Title: Chairman
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RIDER
TO
INVENTORY AND EQUIPMENT SECURITY AGREEMENT SUPPLEMENT
TO ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT]
between
Congress Financial Corporation
and
I.C. Xxxxxx & Company L.P.
This Rider sets forth modifying terms to the respective indicated
Sections of the Supplement corresponding to the asterisks in such Sections of
the Supplement.
Section 1.1 * which are imported by us or which are covered by
letters of credit issued or indemnified by you
Section 2.2 * or sales or trade-ins of Equipment having an
aggregate appraised value in any calendar year,
based upon the most recent appraisal thereof
delivered to you, of not more than $50,000,
PROVIDED, THAT, (a) any such sales shall be sold
for cash and the sale proceeds shall be remitted
to you for application to the Obligations, and
(b) any such trade-ins shall be replaced by
Equipment having a cost in excess of the appraised
value of the Equipment for which it was traded.
Section 2.3 * reasonably
** thirty (30)
Section 2.6 * reasonable
Section 2.8 * in all material aspects
Section 2.9 * materially applicable
Section 3.4 * reasonably
SRK42/I19
EXHIBIT A
EXISTING LIENS
OUTSTANDING
A. FINANCING STATEMENTS AMOUNT SECURED
DEBTOR I.C. XXXXXX & COMPANY L.P.
MARYLAND--STATE DEPARTMENT
1. 5/2/88--Liber 3018, folio 1987, I.D. No.
81237962; Secured Party: Storage $4,586.95/month
Techology Corporation; Collateral: Balance: $101,132.00
STC equipment lease to Xxxxxx.
2. 5/8/89--Liber 3132, folio 1854, I.D. No.
91287666; Secured Party; Storage Same as No. A.1.
Technology Corporation; Collateral: above
STC equipment leased to Xxxxxx.
3. 3/5/90--Liber 3220, folio 1398, I.D. No.
100648427; Secured Party/Assignee; The $1,261.51/month
CIT Group; Collateral: Specific Balance: $10,088.00
equipment. (approx.)
4. 6/18/90--Liber 3248, folio 2282, I.D.
No. 101698361; Secured Party/Assignee:
The CIT Group; Collateral: Specific Same as No. A.3.
equipment with additional note above
"Assignments of Inventory
According to TAX PROPERTY ARTICLE #12-
108(k)--Conditional Sales Contract."
MASSACHUSETTS--SECRETARY OF STATE
1. 2/16/90--File No. 938546; Secured Same as No. A.3.
Party/Assignee: The CIT Group; above
Collateral: Specific equipment.
MASSACHUSETTS--CITY OF BOSTON
1. 2/15/90--File No. 343185; Secured
Party/Assignee: The CIT Group; Same as No. A.3.
Collateral: Specific Equipment. above
B. Judgements
I.C. XXXXXX & COMPANY L.P.
New York County--State tax lien dated October 21, 1991 in the amount of
$6,370.68
SRK42a/I117/prf
-2-
EXHIBIT B TO
INVENTORY AND EQUIPMENT SECURITY AGREEMENT SUPPLEMENT
LOCATIONS OF COLLATERAL
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1. I.C. Xxxxxx & Company, L.P.
0000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
2. Sussex Co.
XxXxxxxx & X.X. 0xx Xxxxxx
Xxxxxxx, XX 00000
3. Lord Xxxxxx Factory Outlet
000X Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
4. Newton Co.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
5. Carthage Co.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
6. Raleigh Co.
Xxxxxxx 00 Xxxx
Xxx 000
Xxxxxxx, XX 00000
7. 0000 Xxxxxxxx
Xxx Xxxx, XX 00000
8. Empire Xxxxx Xxxxxxxx
Xxx Xxxx, XX 00000
9. Atlanta Apparel Mart
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, XX 00000
10. Bayside Mdse. Mart
000-000 Xx. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
11. California Mart
000 Xxxx Xxxxx Xxxxxx
Xxxxx X000
Xxx Xxxxxxx, XX 00000
12. Miami International Mdse. Mart
000 X.X. 00xx Xxxxxx
Xxxxx, XX 00000
13. Dallas Market Center
0000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
351.Z00999A:06/11/92
12898-8
