EXHIBIT 10.2
POSSESSION AGREEMENT
THIS AGREEMENT made this 26th day of February, 1997 by and among SUMMIT
BANK (successor by merger of United Jersey Bank and Summit Bank), a banking
corporation organized and existing under the laws of the State of New Jersey,
with a location at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 ("Summit"), and
XXXXXX XXXX, an individual and XXXXXXX XXXX, an individual with an address of 00
Xxxxxx Xxxx, Xxxxxx, Xxx Xxxxxx (herein collectively "Kauz"), and RENAISSANCE
EYEWEAR, INC., located at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the
"Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower and Summit (formerly known as United Jersey Bank and
United Jersey Bank/Central, N.A.) are parties to a commercial lending
relationship as evidenced by the Amended and Restated Loan and Security
Agreement dated December 20, 1994, as amended, modified and extended from time
to time (the "Loan Agreement"), pursuant to which Summit made the following
loans to Borrower (hereinafter collectively the "Loans" or singularly, a "Loan")
and Borrower agreed to repay all such Loans and granted to Summit a security
interest in and to certain assets of Borrower, all in accordance with the terms
thereof:
1. Revolving Loan of $4,250,000 evidenced by the Amended and Restated Secured
Revolving Note dated as of January 31, 1997, as amended, modified and
extended from time to time;
2. Term Loan of $760,000 evidenced by the Amended and Restated Secured
Installment Note dated June 6, 1996, as amended, modified and extended
from time to time; and
3. Term Loan of $265,000 evidenced by a Promissory Note dated September 30,
1992, as amended, modified and extended from time to time;
WHEREAS, the Loans are all cross collateralized and provide that a default
in respect of any one Loan is a default under all of the Loans;
WHEREAS, there has occurred one or more Events of Default (as defined in
the Loan Agreement) on all of the Loans;
WHEREAS, the Borrower has agreed, pursuant to the provisions of N.J.S.A.
12:9-503 and 12:9-504, to turn over and deliver to Summit the Collateral (as
hereinafter defined) pledged to Summit as security for the Loans;
WHEREAS, Xxxxxx Xxxx is the holder of the majority of the voting stock of
the Borrower;
WHEREAS, Summit, the Borrower and Kauz seek to memorialize their
agreements concerning the turn over and delivery of possession of the Collateral
by this writing; and
WHEREAS, Xxxxxx Xxxx is a guarantor of the obligations of Borrower to
Summit and the Kauz have pledged certain cash collateral to Summit to secure the
obligations of Borrower to Summit;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration the
receipt of which is hereby acknowledged, it is agreed as follows:
1. DEFINITIONS:
For the purposes of this Agreement the following definitions shall apply
to the terms set forth below:
(a) The term "Account", "Account Receivable" or "Accounts Receivable"
shall mean, in addition to the definition of account contained in the Uniform
Commercial Code of the State of New Jersey, any and all obligations of any kind
at any time due and/or owing to Borrower (as defined below) and all rights of
Borrower to receive payment or any other consideration (whether classified under
the Uniform Commercial Code of the State of New Jersey or any other State as
accounts, contract rights, chattel paper, general intangibles, or otherwise)
including without limitation, invoices, contract rights, accounts receivable,
general intangibles, leases, choses-in-action, notes, drafts, acceptances,
instruments and all other debts, obligations and liabilities in whatever form
owing to Borrower from any person, firm, governmental authority, corporation or
any other entity, all security therefore, and all Borrower's rights to goods
sold (whether delivered, undelivered, in transit or returned), which may be
represented thereby, whether now existing or hereafter arising, together with
all proceeds and products of any and all of the foregoing.
(b) The term "Agreement" shall mean this Possession Agreement and any
modification, amendment or change hereinafter made, in writing, to this
Possession Agreement.
(c) The term "Borrower" shall mean Renaissance Eyewear, Inc., a
corporation of the State of New Jersey.
(d) The term "Collateral" shall mean all assets of Borrower pledged to
Summit as security for the Loans, including, but not limited to, the Inventory,
Accounts Receivable, General Intangibles, Equipment and Machinery.
(e) The term "Equipment" shall mean, in addition to the definition thereof
contained in the Uniform Commercial Code of the State of New Jersey, all
equipment, machinery, fixtures,
2
and all other tangible assets, including, but not limited to, any and all
computer programs, tapes, discs and data processing software related thereto,
and all replacements, repairs, modifications, alterations, additions, controls
and operating accessories therefore, all substitutions and replacements
therefore, and all accessions and additions thereto and all proceeds and
products of the foregoing, whether now owned or hereafter acquired by Borrower.
(f) The term "General Intangibles" shall mean, in addition to the
definition thereof contained in the Uniform Commercial Code of the State of New
Jersey, all of the Borrower's now owned or hereafter acquired choses-in-action,
causes of action and all other intangible personal property including, without
limitation, corporate or other business records, inventions, designs, patents,
patent applications, trademarks, trademark applications, trade names, trade
secrets, good will, registrations, copyrights, licenses, franchises, customer
lists, tax refunds, tax refund claims, insurance claims, rights and claims
against carriers and shippers and rights to indemnification.
(g) The term "Inventory" shall mean, in addition to the definition thereof
contained in the Uniform Commercial Code of the State of New Jersey, all goods,
merchandise or other tangible personal property held by Borrower for sale or
lease or to be furnished under labels and other devices, the names or marks
affixed thereto for purposes of selling or identifying the same or the seller or
manufacturer thereof, and all right, title and interest of Borrower therein and
thereto, including, but not limited to, any and all computer programs, tapes,
discs and data processing software related thereto, all raw materials, work or
goods in process or materials and supplies of every nature used, consumed or to
be consumed in the Borrower's business, all packaging and shipping materials,
and all proceeds and products of any of the foregoing, whether now owned or
hereafter acquired by Borrower, and wherever located.
(h) The term "Loan Documents" shall mean the Amended and Restated Loan and
Security Agreement dated December 20, 1994, the Amended and Restated Secured
Revolving Note dated as of January 31, 1997 in the initial principal sum of
$4,250,000, the Amended and Restated Secured Installment Note dated June 6, 1996
in the initial principal sum of $760,000, and the Promissory Note dated
September 30, 1992 in the initial principal sum of $265,000 and related
documents, all as amended, modified and extended from time to time by and
between Summit and Borrower.
(i) The term "Machinery" shall mean and include, without limitation, all
inanimate mechanisms for utilizing or applying power including the appurtenances
thereto used by or for Borrower in the operation of its business and all
accessories, substitutions, additions, replacements and parts thereof, whether
now owned or hereafter acquired.
(j) The term "Principals" shall mean Xxxxxx Xxxx and Xxxxxxx Xxxx and any
other officer, director or shareholder of Borrower.
(k) The term "Summit" shall mean Summit Bank, a banking corporation
organized and existing under the laws of the State of New Jersey with an address
at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
3
(l) The term "Turn Over Collateral" shall mean the Accounts Receivable,
Inventory, Machinery and Equipment, General Intangibles and all other Collateral
granted to Summit by Borrower as security for the Loans.
2. AMOUNT DUE:
Borrower hereby acknowledges and agrees that, as of February 26, 1997,
there is due and owing to Summit on the Loans, without offset, counterclaim or
defense, the following principal balances, interest and late charges:
LOANS;
a) $4,250,000 Amended and Restated
Secured Revolving Note: $3,067,099.16
b) $760,000 Amended and Restated Secured $ 345,094.45
Installment Note:
c) $265,000 Promissory Note: $ 35,607.47
-------------
Amount due: $3,447,801.08
In addition to the balance due on the Loans as set forth above, there is due and
owing from the Borrower to Summit all interest, legal fees and expenses, and
other charges as provided for under the Loan Documents accruing from the date
hereof.
3. DEFAULT AND TURN OVER:
Borrower hereby acknowledges that one or more Events of Default have
occurred under all of the Loans and that Summit has the right to possession of
the Collateral under the terms of the Loan Documents and in furtherance thereof
Borrower has agreed and does hereby voluntarily deliver to Summit the Turn Over
Collateral. It is understood and agreed that, with regard to the Turn Over
Collateral, Summit is entitled to exercise all rights and remedies it has under
the terms of the Loan Documents, at law or in equity, including the right to
sell same in accordance with the provisions of the Uniform Commercial Code as in
effect in the State of New Jersey.
4. ACKNOWLEDGMENT AND WAIVER:
Kauz and the Borrower waive any and all rights they may have under
Sections 9-504 and 9-506 of the Uniform Commercial Code of the State of New
Jersey, including, without limitation, the right to receive notification of sale
of the Collateral. Kauz hereby consent to and approve of the actions
contemplated herein, specifically including the delivery of the Collateral to
Summit by Borrower. Kauz and Borrower hereby acknowledge that Summit intends to
sell the Turn Over Collateral to Diplomat Ambassador, Inc. or another third
party at a private sale and hereby consent to and approve of any actions taken
by Summit in furtherance thereof.
4
5. LOAN AGREEMENTS REMAIN IN FULL FORCE AND EFFECT:
Acceptance of the Turn Over Collateral by Summit shall not discharge,
release, extinguish or operate as a compromise of the Loans or of Borrower's or
any guarantor's obligations to Summit. The Loan Documents shall remain in full
force and effect.
6. INDEMNIFICATION:
For acts from and after the date of this Agreement, Borrower and Xxxxxx
Xxxx will, and hereby do, indemnify Summit and any of its officers, directors,
employees or agents and hold them harmless, jointly and severally, against any
liability whatsoever (including environmental liability but excluding acts of
willful misconduct or gross negligence) incurred by it or them resulting from
Summit's accepting possession of the Turn Over Collateral, and any actions taken
in respect of or affecting the Turn Over Collateral, including but not limited
to damage to or destruction of the Turn Over Collateral from any agency,
diminution in value to the Turn Over Collateral, personal injury to any person
or injury to property and all of their expenses such as court costs and
reasonable attorneys fees incurred in connection with having accepted possession
of the Turn Over Collateral.
7. RELEASE:
Borrower and Kauz hereby, jointly and severally, waive and relinquish any
and all claims, causes of action, damages and demands whatsoever, whether known
or unknown, at law or in equity, that they have or may claim to have against
Summit, arising out of, or resulting from their lending relationship with Summit
or its predecessors United Jersey Bank and United Jersey Bank/Central, N.A.,
including, but not limited to the Loan Documents.
8. GUARANTY; CASH COLLATERAL AND OTHER TURNOVER COLLATERAL:
It is specifically understood and agreed that the guaranty of Xxxxxx Xxxx
and the pledge of the cash collateral by Kauz shall remain in full force and
effect. Without in any way limiting the generality of the immediately preceding
sentence, to the extent that the sale of any of the Turn Over Collateral to
Diplomat Ambassador, Inc. or any other third party shall be challenged or
reversed by any court of competent jurisdiction or should any payment or other
value received by Summit of any of the obligations due under the Loan Documents
be rescinded or otherwise returned by Summit, Xxxxxx Xxxx'x obligations under
said guaranty and the pledge of the cash collateral by Kauz shall remain in full
force and effect or be reinstated, if previously terminated. It is further
agreed that the cash collateral pledged by Kauz to Summit, together with all
other Turn Over Collateral, if any, that is not sold by Summit to Diplomat
Ambassador, Inc. or another third party, shall continue to be held by Summit for
a period of 93 days from the date hereof. If by the 93rd day from the date
hereof, no action has been instituted to set aside the sale of the Turn Over
Collateral or otherwise effect said sale, Summit shall return said cash
collateral to Kauz and said other Turn Over Collateral not previously sold, if
any, to the Borrower.
5
9. RELIEF FROM AUTOMATIC STAY:
To induce Summit to enter into this Agreement, Borrower hereby
acknowledges that it has no equity in the Turn Over Collateral in excess of the
indebtedness owed to Summit under the Loans and that upon filing of a petition
in bankruptcy by or against Borrower, Summit shall thereupon be entitled to
relief from the Automatic Stay imposed by 11 USC ss.362 or otherwise, and
Borrower hereby irrevocably consents to relief from any Automatic Stay imposed
and the exercise of the rights and remedies otherwise available to Summit under
the Loan Documents, at law or in equity, and Borrower hereby waives any
objections that it may have to any such relief.
10. BINDING EFFECT:
This Agreement is binding upon and inures to the benefit of, and is
enforceable by the parties, their heirs, executors, legal representatives,
successors and assigns.
11. WAIVER OF JURY DEMAND:
SUMMIT, BORROWER AND KAUZ HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN
ANY LITIGATION RELATING TO THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER
AGREEMENTS BETWEEN THEM RELATED TO THIS AGREEMENT.
12. ENTIRE AGREEMENT:
This Agreement sets forth the entire, final and complete agreement and
understanding of the parties with respect to the subject matter contained
herein; any and all prior discussions, negotiations and understandings related
to the matters referred to herein are hereby merged into this Agreement;
provided however nothing contained herein shall be deemed a waiver of any rights
granted to Summit under the Loan Documents and all such agreements remain in
full force and effect except as herein specifically modified.
13. APPLICABLE LAW/JURISDICTION:
(a) This Agreement shall be governed, interpreted and enforced in
accordance with the laws of the State of New Jersey.
(b) The parties hereto hereby consent to the jurisdiction in the Courts of
the State of New Jersey or of the Federal District Court for the District of New
Jersey and agree that no defense of forum non conveniens shall be asserted in
any action brought in such courts.
6
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their authorized corporate officers and caused their hands and
seals to be affixed hereto the date and year first written above.
SUMMIT BANK
/s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------
By: Xxxxxxxxx X. Xxxxxx, Vice President
ATTEST: RENAISSANCE EYEWEAR, INC.
/s/Xxxxxx Xxxx
------------------------------------ -------------------------------------
By: Xxxxxxx Xxxx, Secretary By: Xxxxxx Xxxx, President
WITNESS
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxx Xxxx
------------------------------------ -------------------------------------
Xxxxxxx Xxxxxx, Esq. XXXXXX XXXX, Individually and as the
holder of the majority voting stock of
Renaissance Eyewear, Inc.
WITNESS:
/s/ Xxxxxxx Xxxxxx, Esq.
------------------------------------ -------------------------------------
Xxxxxxx Xxxxxx, Esq. XXXXXXX XXXX, Individually
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their authorized corporate officers and caused their
hands and seals to be affixed hereto the date and year first written above.
SUMMIT BANK
/s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------
By: Xxxxxxxxx X. Xxxxxx, Vice President
ATTEST: RENAISSANCE EYEWEAR, INC.
/s/ Xxxxxxx Xxxx /s/Xxxxxx Xxxx
------------------------------------ -------------------------------------
By: Xxxxxxx Xxxx, Secretary By: Xxxxxx Xxxx, President
WITNESS
/s/ Xxxxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxx
------------------------------------ -------------------------------------
Xxxxxxxx Xxxxxxxxx XXXXXX XXXX, Individually and as the
Notary Public of New Jersey holder of the majority voting stock of
My Commission Expires July 7, 1998 Renaissance Eyewear, Inc.
Sworn to and subscribed before me
this 26th day of Febuary 1997
WITNESS:
/s/ Xxxxxxx Xxxx
------------------------------------ -------------------------------------
XXXXXXX XXXX, Individually
7
