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Exhibit 10.17
INVENTORY RIDER
DATE: June 23, 1999
BORROWER: New Directions FCFC: FIRST COMMUNITY FINANCIAL
Manufacturing, Inc., CORPORATION,
an Arizona corporation an Arizona corporation
ADDRESS: 2940 Xxxx Xxxxxxxx ADDRESS: 0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 Xxxxx 000
Xxxxxxx, XX 00000
THIS INVENTORY RIDER (the "Rider") is made a part of and incorporated into the
Accounts Receivable Security Agreement dated June 23, 1999 between Borrower and
FCFC (the "Agreement") as follows:
1. Loans. Upon the performance and satisfaction by Borrower of all of the
provisions contained in the Agreement and this Rider, and in addition to the
loans or advances made or to be made to Borrower by FCFC pursuant to the
Agreement, FCFC shall loan or make advances to Borrower in such amount or
according to such formula and on such terms and conditions as is set forth in
Exhibit "A".
2. Representations and Warranties. Until all obligations of Borrower to FCFC
are fully paid and satisfied, Borrower does hereby warrant and represent to and
covenant with FCFC (in addition to the representations, warranties and covenants
set forth in the Agreement) as follows:
(a) The Inventory Value is now and shall at all times hereafter be
at least N/A% of the foregoing indebtedness (including principal, interest,
cost and expenses) of Borrower to FCFC; provided, however, notwithstanding the
foregoing in any event the Inventory Value is and shall at all times hereafter
be at least $N/A.
(b) All Inventory is presently kept and shall not be removed from
the following locations, outside the ordinary course of business, without prior
written notice to FCFC:
2940 Xxxx Xxxxxxxx Center Point Building 0000 Xxxxxx Xxxxxx,
Xxxxxxx, XX 00000 000 Xxxxx Xxxxxxxx Mart 2, Space 721
Spaces A103 & A104 Xxx Xxxxxxxxx, XX 00000
Xxxx Xxxxx, XX 00000
(c) All Inventory is now and hereafter at all times shall be new
inventory of good and saleable quality, free from defects.
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(d) Borrower is, and will continue to be, the sole and complete
owner of the Inventory free and clear of any liens, security interests
(including purchase money security interest) encumbrances and claims.
(e) No Inventory is now, nor shall any Inventory at any time
hereafter be stored with a bailee, warehousemen or similar party, without FCFC's
prior written consent, and in such event will concurrently therewith cause any
such bailee, warehousemen or similar party to issue and deliver to FCFC in form
acceptable to FCFC warehouse receipts in FCFC's name evidencing the storage of
Inventory.
(f) Borrower has paid and shall hereafter continue to pay when due
all rent and other impositions upon any leased premises where any Inventory of
Borrower is kept, all expenses of storing, warehousing, handling and shipping
the Inventory and all taxes and licenses imposed by any lawful authority upon
the Inventory.
(g) Until default by Borrower under the Agreement, Borrower may,
subject to the provisions of the Agreement, sell the Inventory but only in the
ordinary course of its business.
3. Books and Records. Borrower shall at all times keep correct and accurate
records itemizing and describing the kind, type, quality and quantity of
Inventory, Borrower's cost thereof and selling price thereof and the daily
withdrawals therefrom and additions thereto. All of such records shall be
available to FCFC and its agents upon demand for inspection and photocopying
thereof. In addition FCFC shall have the right upon demand during Borrower's
usual business hours to inspect and examine the Inventory and to check and test
the same as to quality, quantity, value and condition and Borrower agrees to
reimburse FCFC for FCFC's reasonable costs and expenses incurred in inspecting
the Inventory. At least every 12 months or more often when requested by FCFC,
Borrower shall make a physical listing of all Inventory containing a description
of each item of Inventory, the cost per unit, the wholesale market value per
unit, the quantity of each item, the extended costs thereof and the extended
wholesale market value thereof and deliver such report to FCFC within 30 days
thereafter together with a certificate affixed thereto by an authorized officer
of Borrower to the effect that the listing is complete and correct and
accurately presents the value of the Inventory of goods as of the date of such
listing.
4. Inspection of Collateral. Borrower will permit FCFC access, at all
reasonable times, to the premises of Borrower for the purpose of inspecting,
examining or taking possession of the Inventory and shall have the right to use
any of Borrower's lifts, hoists, trucks and other facilities for handling or
removing said Inventory, without cost to FCFC.
5. Default. Upon a default by Borrower under the Agreement or this Rider,
FCFC shall have such remedies as are set forth in the Agreement. In addition,
upon FCFC's request, Borrower shall, at its expense, assemble and deliver the
Inventory to FCFC or to a third party as FCFC's bailee, at such place to be
designated by FCFC as is reasonably convenient to the parties; or hold the same
in trust for FCFC's account; or store the same in a warehouse in FCFC's name; or
deliver to FCFC documents of title representing said Inventory.
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6. Risk of Loss. All risk of loss, damage or destruction of Inventory shall
be borne by Borrower, specifically, FCFC shall not in any way or manner be
liable or responsible for:
(a) The safekeeping of the Inventory;
(b) Any loss of damage thereto incurred or arising in any manner or
fashion from any cause;
(c) Any diminution in the value thereof; or
(d) Any act or default of any carrier, warehousemen, bailee or
forwarding agency thereof or any other person whomsoever.
7. Interpretation. Except as specifically amended or supplemented hereby,
all of the terms of the Agreement are hereby confirmed and shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Rider to the Accounts
Receivable Security Agreement the date first above written.
FIRST COMMUNITY FINANCIAL
CORPORATION, an Arizona corporation
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Its: President
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New Directions Manufacturing, Inc.,
an Arizona corporation
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Its: President
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By: /s/ Xxxx X. Xxx
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Xxxx X. Xxx
Its: Chairman of the Board
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