Exhibit 10.43
GENERAL SECURITY AGREEMENT
(CASTLE BRANDS [USA] CORP.)
This General Security Agreement ("Agreement") is made this 1st day of June,
0000, xxxxxxx XXXXXX XXXXXX (XXX) CORP., ("Debtor"), a Delaware corporation,
having an address at 00-00 XXXXX XXXXXX, XXXXX X, XXXX XXXX, XX 00000, and
JPMORGAN CHASE BANK, a New York banking organization, as Trustee, ("Trustee"),
with a corporate trust office located at 000 Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx
00000.
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS OF GENERAL APPLICABILITY. All words and terms used
in this Agreement shall have the meanings as set forth herein as follows and
where not otherwise defined herein shall be deemed to have the meanings as
accorded to them in the Uniform Commercial Code as in effect from time to time
in the State of New York ("UCC").
"Account Debtor" shall mean any Person who is or may become obligated
under or on account of any Receivable.
"Agreement" shall mean this Security Agreement.
"Alcoholic Beverages" shall mean those certain alcoholic products
imported by Debtor into the United States (as identified in Exhibit "A" hereto,
as such exhibit may be amended from time to time).
"Collateral" shall mean all the following, wherever located and
whether now existing or hereafter created or arising and whether now owned or
hereafter acquired by CB-US or Grantor: (i) Accounts arising from the sale of
the Alcoholic Beverages; (ii) Inventory of the Alcoholic Beverages, and shall
include, without limitation; (a) all documents of title, policies or
certificates of insurance, securities, chattel paper and other documents and
instruments evidencing or pertaining to any thereof; all claims of CB-US or
Grantor against third parties for loss of or damage to, or otherwise relating
to, any of the Collateral; (b) all moneys, drafts, notes, items, leases, general
or special deposits, balances, sums, proceeds and credits of CB-US or Grantor
arising from the Collateral; (iii) the rights, duties and obligations of Grantor
under the Services Agreement; (iv) all rights and remedies which CB-US or
Grantor might exercise with respect to any of the Collateral; and (v) all
accessions and additions to, replacement and substitutions for, and proceeds and
products of, the Collateral.
"Inventory" shall have the meaning given to such term in the UCC.
"MHW" shall mean MHW, Ltd., a New York corporation.
"MHW Account" shall mean the depository account established by MHW,
into which the proceeds of Collateral are to be deposited and disbursed to the
Trustee, all pursuant to the MHW Collateral Agreement.
"MHW Collateral Agreement" shall mean that certain Collateral
Agreement of even date herewith by and among MHW, Borrower and Trustee.
"MHW Interest" shall mean the legal or beneficial ownership interest
that MHW has or may have from time to time in and to the Receivables and the
Inventory in its capacity as Collateral Agent, as is more fully described in the
MHW Collateral Agreement.
"MHW Security Agreement" shall mean that certain Security Agreement of
even date herewith by and among MHW and Trustee.
"Obligations" shall mean and include all loans, advances, debts,
liabilities, obligations, covenants and duties owing by Debtor under the Trust
Indenture of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, whether arising under this Agreement,
the other Secured Notes Documents or under any other agreement or by operation
of law, whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now due or hereafter arising and however
acquired, including, without limitation, all interest, charges, expenses,
commitment, facility, collateral management or other fees, reasonable attorneys'
fees and expenses, and any other sum chargeable to Debtor under this Agreement,
the other Secured Notes Documents the Trust Indenture.
"Person" shall mean an individual, partnership, limited liability
company, corporation, or unincorporated association or organization, government
or governmental agency or governmental subdivision,
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Receivables" shall mean and include all present and future Accounts,
including, without limitation, contract rights, promissory notes, Chattel Paper,
Electronic Chattel Paper, Instruments and Documents, all tax refunds and rights
to receive tax refunds, bonds, certificates, rights to payment for the sale,
lease or license of equipment and policies of insurance and insurance proceeds,
investment securities, notes and instruments, deposit accounts, book accounts,
credits and reserves and all forms of obligations whatsoever owing, together
with all instruments, all documents of title representing any of the foregoing,
and all rights in any merchandise or goods which any of the same may represent,
all files and records with respect to any collateral or security given by Debtor
to the Trustee, together with all right, title, security and guaranties with
respect to each Receivable, including any right of stoppage in transit, whether
now owned or hereafter created or acquired by Debtor or in which Debtor now has
or hereafter acquires any interest.
"Secured Notes Documents" shall mean this Agreement, the MHW Security
Agreement, the MHW Collateral Agreement and the Trust Indenture, together with
promissory notes issued thereunder, and any and all other documents, instruments
or agreements executed in connection therewith or herewith as the same may be
modified, amended, restated or replaced from time to time.
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"Services Agreement" shall mean the distribution services letter
agreement restated as of December 1, 2003 between Debtor and MHW.
"Trust Indenture" shall mean the Trust Indenture dated the date hereof
between the Debtor and the Trustee, as the same may be modified, amended,
restated or replaced from time to time.
SECTION 1.2. MHW INTEREST. It is understood that all of Debtor's
representations, warranties, covenants and agreements to perform hereunder are
subject to the MHW Interest and that, in addition to the MHW Collateral
Agreement, MHW is independently entering into the MHW Security Agreement with
respect to the Receivables and Inventory which comprise the MHW Interest.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. GRANT OF SECURITY INTEREST. To secure the prompt payment and
performance of all of the Obligations to the Trustee, Debtor hereby grants to
the Trustee a first priority lien and security interest in all of the Collateral
of Debtor.
SECTION 2.2. PERFECTION. Debtor will execute and deliver to the Trustee
and/or MHW such security agreements, assignments (including, without limitation,
assignments of specific Receivables), and other papers as the Trustee may at any
time or from time to time reasonably request that are required to perfect or
protect the security interest granted hereby. Debtor shall also cooperate with
the Trustee in obtaining appropriate waivers or subordinations of interests from
such third parties in any Collateral. Debtor authorizes the Trustee to execute
alone any financing statements or other documents or instruments that the
Trustee may require to perfect, protect or establish any lien or security
interest granted to the Trustee by Debtor and further authorizes the Trustee to
sign Debtor's name on the same and/or to file or record the same without
Debtor's signature thereon. Debtor will perform any and all steps that the
Trustee may request to perfect the Trustee's security interest in Inventory,
including, but without limitation, placing and maintaining signs, appointing
custodians, executing and filing financing or continuation statements in form
and substance satisfactory to the Trustee, maintaining stock records and
transferring of Inventory to warehouses. If any Inventory is in the possession
or control of any third party other than a purchaser in the ordinary course of
business or a public warehouseman where the warehouse receipt is in the name of
or held by the Debtor, Debtor shall notify such person of the Trustee's security
interest therein and, instruct such person or persons to hold all such Inventory
for the account and benefit of the Trustee and subject to the Trustee's
instructions. Upon the written request of the Trustee, Debtor will deliver to
the Trustee warehouse receipts covering any Inventory located in warehouses
showing the Trustee as the beneficiary thereof and will also deliver to the
warehouseman such agreements relating to the release of warehouse Inventory as
the Trustee may request. Debtor hereby appoints the Trustee as its attorney in
fact to execute and deliver notices of lien, financing statements, assignments,
and any other documents, notices, and agreements necessary for the perfection of
the Trustee's security interests in the Collateral. Debtor appoints such person
or persons as the Trustee may designate as Debtor's attorney-in-fact to endorse
the name of Debtor on any checks, notes, drafts
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or other forms of payment or security that may come into the possession of the
Trustee, to sign Debtor's name on invoices or bills of lading, drafts against
customers, notice of assignment, verifications and schedules and, generally, to
do all things necessary to carry out this Agreement. Such attorney-in-fact may,
upon the occurrence of an Event of Default (as defined below), notify the Post
Office authorities to change the address of delivery of mail to an address
designated by the Trustee, and open and dispose of mail addressed to Debtor. The
powers granted herein, being coupled with an interest, are irrevocable, and
Debtor approves and ratifies all acts of the attorney-in-fact. Debtor agrees to
pay the costs of the continuation of the Trustee's security interests and
releases or assignments of the Trustee's interests.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Debtor represents, warrants and covenants to the Trustee, and shall be
deemed to continually do so, as long as this Agreement shall remain in force,
that:
SECTION 3.1. INVENTORY.
(A) WARRANTIES WITH RESPECT TO INVENTORY. Debtor represents and warrants to
the Trustee that (i) all representations made by Debtor to the Trustee and all
documents and schedules given by Debtor to the Trustee, relating to the
description, quantity, quality, condition and valuation of Inventory are true
and correct, and (ii) Debtor has not received any Inventory on consignment or
approval unless Debtor has notified the Trustee thereof in a Record, has marked
such Inventory on consignment or approval or has segregated it from all other
Inventory, and has appropriately marked its records to reflect that such
Inventory is held on consignment or approval.
(B) THE TRUSTEE'S RIGHTS IN INVENTORY. The Trustee's security interests in
the Inventory shall continue through sale and attach after importation of the
Inventory into the U.S. and without further act to returned goods, documents of
title, warehouse receipts, and to proceeds resulting from sale or disposition of
Inventory. Until all Obligations of Debtor under the Trust Indenture have been
satisfied, the Trustee's security interest in Inventory and in all proceeds
thereof shall continue in full force and effect. Upon the occurrence of an Event
of Default (as defined below), the Trustee shall have, in its discretion and at
any time, the right to take physical possession of the Inventory and to maintain
it on Debtor's premises, in a public warehouse, or at such place as the Trustee
may remove the Inventory or any part thereof. If the Trustee exercises its right
to take possession of Inventory, Debtor will, upon demand, and at Debtor's own
cost and expense assemble the Inventory and make it available to the Trustee at
a place or places reasonably convenient to the Trustee.
(C) DEBTOR'S OBLIGATION WITH RESPECT TO INVENTORY. All Inventory is and
shall be maintained at the locations shown on Schedule 3.1(c) hereof. No
Inventory shall be removed therefrom, except for the purpose of sale or in the
ordinary course of Debtor's business, and except for such sales, Debtor will not
sell, encumber, grant a security interest in, dispose of or permit the sale,
encumbrance, return or disposal of any Inventory without the Trustee's prior
consent contained in an Authenticated Record (as defined in the UCC).
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(D) MAINTENANCE OF INVENTORY RECORDS. Debtor shall maintain full, accurate
and complete records respecting Inventory, including a perpetual inventory, and
all other Collateral at all times. Debtor will pay all costs to be paid on
taxes, assessments, governmental charges or private encumbrances levied,
assessed, imposed or payable upon or with respect to the Inventory or other
Collateral or any part thereof.
(E) INVENTORY REPORTING SYSTEM. Debtor shall maintain full, accurate and
complete records respecting Inventory, including a perpetual inventory.
SECTION 3.2. RECEIVABLES.
(A) Debtor represents and warrants to the Trustee that each Receivable
created by it (i) will cover a bona fide sale and delivery of merchandise
usually dealt in by Debtor in the ordinary course of its business or will cover
the rendition of services by Debtor to customers of a kind ordinarily rendered
in the ordinary course of Debtor's business, (ii) will be for a liquidated
amount from a customer competent to contract therefor, (iii) is not subject to
renegotiation, (iv) is not subject to any prepayment or credit and will not be
subject to any deduction, offset, counterclaim, lien or other condition other
than in the ordinary course of Debtor's business, and (v) is generally
enforceable in accordance with its terms. Debtor further represents and warrants
that all services to be performed by Debtor in connection with each Receivable
have been performed.
(B) CONFIRMATORY WRITTEN ASSIGNMENTS. Promptly after the creation of any
Receivable, if the Trustee shall so request, Debtor shall execute and deliver
confirmatory written assignments to the Trustee of Receivables, but the failure
to execute or deliver any schedule or assignment shall not affect or limit any
lien or other right of the Trustee in and to any Receivable.
(C) COMMUNICATION WITH ACCOUNT DEBTORS. Upon the Trustee's request, before
or after the occurrence of an Event of Default, Debtor shall provide the Trustee
with a list of the addresses of its Account Debtors.
SECTION 3.3. OWNERSHIP OF COLLATERAL. Subject only to the MHW Interest,
Debtor is the owner of the Collateral with good, marketable and indefeasible
title thereto, free and clear of all liabilities, mortgages, security interests,
leases, liens, pledges, encumbrances, restrictions, charges, claims or
imperfections of title whatsoever.
SECTION 3.4. MAINTENANCE OF COLLATERAL. Debtor shall continually take such
steps as are necessary and prudent to protect the interest of the Trustee in the
Collateral including, but not limited to, the following:
(a) Maintain books and records relating to the Collateral satisfactory
to the Trustee and shall allow the Trustee or its representatives access to such
records and the Collateral at all reasonable times for the purpose of
examination, inspection, verification, copying, extracting and other reasonable
purposes as the Trustee may require;
(b) Maintain the Collateral and the books and records relating to the
Collateral at Debtor's address indicated above, at any address listed on
Schedule 3.1(c) or at such other
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address as the Trustee shall permit, in its sole discretion, upon the request to
the Trustee contained in an Authenticated Record from Debtor;
(c) Execute and deliver to the Trustee such other and further
documentation necessary to evidence, effectuate or perfect its security interest
in the Collateral;
(d) Defend the Collateral against all claims and demands of third
parties at any time claiming the same or any interest therein, except buyers of
Inventory in the ordinary course of Debtor's business;
(e) Keep the Collateral free of all liens and encumbrances, except for
the security interest of the Trustee, and Debtor will not, without prior consent
of the Trustee contained in an Authenticated Record, sell, transfer or otherwise
dispose of the Collateral or any interest therein, in bulk or otherwise, except
for the sale of Inventory in the ordinary course of business;
(f) Notify the Trustee in the event of material loss or damage to the
Collateral or of any material adverse change in Debtor's business or the
Collateral, or of any other occurrences which could materially and adversely
affect the security of the Trustee;
(g) Pay all expenses incurred in the manufacture, delivery, storage or
other handling of the Collateral and all taxes which are or may become a lien on
the Collateral, promptly when due, and in any event reimburse the Trustee, on
demand, for any expenses which the Trustee might incur following the occurrence
of an Event of Default, in satisfying such expenses or taxes, which the Trustee,
in its sole discretion, deems necessary in order to protect the Collateral;
(h) Maintain insurance on the Collateral from carriers acceptable to
Trustee of such types, coverage, form and amount as is usually carried on
similar goods by similar enterprises. In the event Debtor fails to maintain such
insurance, the same may be maintained by the Trustee, at its option, and Debtor
shall reimburse the Trustee for the cost thereof, on demand; and
(i) If requested by the Trustee: (i) xxxx its records evidencing the
Collateral in a manner satisfactory to the Trustee so as to indicate the
security interest of the Trustee hereunder; and (ii) fully cooperate with the
Trustee in the exercising of its rights and methods for verification of the
Collateral.
SECTION 3.5. AUTHORITY. Debtor is authorized to enter into and implement
this Agreement and has taken all necessary actions, corporate or otherwise, in
relation to such authorization.
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ARTICLE IV
EVENTS OF DEFAULT
The occurrence of any Event of Default under, and the acceleration of
the Secured Notes then outstanding as provided for in, the Trust Indenture shall
constitute an "Event of Default" under this Agreement.
ARTICLE V
RIGHTS OF THE TRUSTEE
SECTION 5.1. GENERAL RIGHTS. The rights of the Trustee shall at all times
be those of a secured party under the UCC. Without limiting the generality of
the foregoing, the Trustee shall have the additional rights set forth in this
Agreement.
SECTION 5.2. THE TRUSTEE'S RIGHT TO PERFORM DEBTOR'S OBLIGATIONS. In the
event that Debtor shall fail to purchase or maintain insurance, or to pay any
tax, assessment, government charge or levy, except as the same may be otherwise
permitted hereunder, or in the event that any lien, encumbrance or security
interest prohibited hereby shall not be paid in full or discharged, or in the
event that Debtor shall fail to perform or comply with any other covenant,
promise or Obligation to the Trustee hereunder or under any other Loan Document,
the Trustee may, but shall not be required to, perform, pay, satisfy, discharge
or bond the same for the account of Debtor, and all monies so paid by the
Trustee, including reasonable attorneys' fees and expenses, shall be treated as
part of the Obligations.
SECTION 5.3. COLLECTIONS; MODIFICATION OF TERMS. Without limiting any
rights the Trustee may have pursuant to this Agreement or otherwise, upon the
occurrence and during the continuance of an Event of Default, the Trustee may
demand, xxx for, collect and give receipts for any money, Instruments or
property payable or receivable on account of or in exchange for any of the
Collateral, or make any compromises it deems necessary or proper, including
without limitation, extending the time of payment, permitting payment in
installments, or otherwise modifying the terms or rights relating to any of the
Collateral, all of which may be effected without notice to or consent by Debtor
and without otherwise discharging or affecting the Obligations, the Collateral
or the security interest granted under this Agreement or any of the Secured
Notes Documents.
SECTION 5.4. NOTIFICATION OF ACCOUNT DEBTORS. Without limiting any rights
of pursuant to this Agreement or under applicable law, after an Event of Default
has occurred, (i) Debtor, at the request of the Trustee, shall notify the
Account Debtors of the Trustee's security interest in Debtor's Receivables; and
(ii) the Trustee may notify the Account Debtors on any of the Receivables to
make payment directly to the Trustee, and the Trustee may endorse all items of
payment received by it that are payable to Debtor. Debtor authorizes such
parties to make such payments directly to the Trustee and to rely on notice from
the Trustee without further inquiry. The Trustee may demand and take all
necessary or desirable steps to collect such Collateral in either its or
Debtor's, name, with the right to enforce, compromise, settle, or discharge any
of the foregoing.
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SECTION 5.5. INSURANCE. Without limiting any rights of the Trustee pursuant
to this Agreement or under applicable law, after a Default or Event of Default
has occurred, the Trustee may file proofs of loss and claim with respect to any
of the Collateral with the appropriate insurer, and may endorse in its own and
Debtor's name any checks or drafts constituting insurance proceeds. Any
insurance proceeds received by the Trustee may be applied by it against Debtor's
obligations under the Secured Notes Documents.
SECTION 5.6. WAIVER OF RIGHTS BY DEBTOR. Except as may be otherwise
specifically provided herein, Debtor waives, to the extent permitted by law, any
bonds, security or sureties required by any statute, rule or otherwise by law as
an incident to any taking of possession by the Trustee of any Collateral. Debtor
authorizes the Trustee, upon the occurrence of an Event of Default, to enter
upon any premises owned by or leased to Debtor where the Collateral is kept,
without obligation to pay rent or for use and occupancy, through self help,
without judicial process and without having first given notice to Debtor or
obtained an order of any court, and peacefully retake possession thereof by
securing at or removing same from such premises.
SECTION 5.7. THE TRUSTEE'S RIGHTS. Debtor agrees that the Trustee shall not
have any obligation to preserve rights to any Collateral against prior parties
or to xxxxxxxx any Collateral of any kind for the benefit of any other creditor
of Debtor or any other Person. After the occurrence of an Event of Default, the
Trustee is hereby granted a license or other right to use, without charge,
Debtor's labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and Debtor's rights under all
licenses and any franchise, sales or distribution agreements shall inure to the
Trustee's benefit for such purpose.
SECTION 5.8. RIGHTS ON DEFAULT. Upon the occurrence of any Event of
Default, and after giving effect to any applicable grace period, in addition to
and without limiting any rights the Trustee may have under any agreement,
document or instrument evidencing or representing any obligation of Debtor to
the Trustee or executed in connection with any such obligation, the Trustee is
hereby authorized to declare any or all of the Obligations to be immediately due
and payable, and the rights and remedies of the Trustee with respect to the
Collateral shall be as set forth herein, in the UCC and as otherwise available
under applicable law.
The Trustee may, without demand, advertising or notice, all of which
Debtor hereby waives (except as the same may be required by law), sell, lease,
license, dispose of, deliver and grant options to a third party to purchase,
lease or otherwise dispose of any and all Collateral held by it or for its
account at any time or times in one or more public or private sales or other
dispositions, for cash, on credit or otherwise, as such prices and upon such
terms as the Trustee, in its sole discretion, deems advisable. Without requiring
notice to Debtor, all requirements of reasonable notice under this section shall
be met if such notice is mailed, postage prepaid, to Debtor at its address set
forth herein or such other address as Debtor may have provided to the Trustee,
in a Record, at least ten (10) days before the time of such sale or disposition.
The Trustee may, if it deems it reasonable, postpone or adjourn any sale of any
Collateral from time to time by an announcement at the time and place of the
sale to be so postponed or adjourned without being required to give a new notice
of sale, provided, however, that the Trustee shall provide Debtor with written
notice of the time and place of such postponed
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or adjourned sale. The Trustee may be the purchaser at any such sale, and
payment may be made, in whole or in part, in respect of such purchase price by
the application of Obligations due from Debtor to the Trustee. Debtor shall be
obligated for, and the proceeds of sale shall be applied first to, the costs of
retaking, refurbishing, storing, guarding, insuring, preparing for sale, and
selling the Collateral, including the fees and disbursements of attorneys,
auctioneers, appraisers, consultants and accountants employed by the Trustee.
Proceeds from the Sale or other disposition or Collateral shall be applied to
the payment, in whatever order the Trustee may elect, of all Obligations of
Debtor. The Trustee shall return any excess to Debtor and Debtor shall remain
liable for any deficiency. Collateral securing purchase money security interests
also secures non-purchase money security interests. To the extent Debtor uses an
advance under the Secured Notes Documents to purchase Collateral, Debtor's
repayment of such advance shall apply on a "first-in-first-out" basis so that
the portion of the advance used to purchase a particular item of Collateral
shall be paid in the chronological order the Debtor purchased the Collateral.
Upon request of the Trustee, Debtor will assemble and make the Collateral
available to the Trustee, at a reasonable place and time designated by the
Trustee. Debtor's failure to take possession of any Collateral at any time and
place reasonably specified by the Trustee in a Record to the Debtor shall
constitute an abandonment of such Property. Notwithstanding the foregoing, the
Trustee shall not be required to take possession of the Collateral if and in the
event the possession thereof would, in the reasonable judgment of the Trustee,
require the Trustee to observe or comply with any federal or state law or
regulation relating to the sale or distribution of alcoholic beverages.
The Trustee shall not be responsible to Debtor for loss or damage
resulting from the Trustee's failure to enforce or collect any Collateral or any
monies due or to become due under any liability of Debtor to the Trustee.
After an Event of Default, Debtor (i) will make no change in any
Receivable and (ii) shall receive as the sole property of the Trustee and hold
in trust for the Trustee all monies, checks, notes, drafts, and other property
(collectively called "items of payment") representing the proceeds of any
Collateral. After an Event of Default, the Trustee may but shall be under no
obligation to: (a) notify all appropriate parties that the Collateral, or any
part thereof, has been assigned to the Trustee; (b) collect any Receivables or
General Intangibles in its or Debtor's name, and apply any such collections
against such obligations of Debtor to the Trustee as the Trustee may select; (c)
take control of any cash or non-cash proceeds of any item of the Collateral; (d)
compromise, extend or renew any Receivables, General Intangible, or Document, or
deal with the same as it may deem advisable; and (e) make exchanges,
substitutions or surrender of items comprising the Collateral.
To the full extent not otherwise provided herein, in performing its
duties and discharging its obligations under this Agreement, the Trustee shall
be entitled to all of the rights, protections and immunities accorded to it as
Trustee under the Indenture, including but not limited to the right of
indemnification.
SECTION 5.9. EXPENSE OF COLLECTION AND SALE. Debtor agrees to pay all costs
and expenses incurred by the Trustee in connection with the negotiation and
preparation of this Agreement or any other document, or any other Secured Notes
Documents executed in connection herewith, in determining the Trustee's rights
under, and in enforcing and collecting
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the indebtedness represented by the guaranty and in determining its rights under
and enforcing the security interests created by this Agreement, including,
without limitation, costs and expenses relating to taking, holding, insuring,
preparing for sale, appraising, selling or otherwise realizing on the
Collateral, and reasonable attorneys' fees and expenses in connection with any
of the foregoing. All such reasonable costs and expenses shall be payable on
demand, and shall bear interest, payable on demand, from the date of the
Trustee's payment of such costs and expenses until payment in full is made by
Debtor, at the highest rate of interest permitted by law.
SECTION 5.10. COMPLIANCE WITH OTHER LAWS. The Trustee may comply with any
applicable law requirements in connection with a disposition of the Collateral,
and compliance will not be considered adversely to effect the commercial
reasonableness of any sale of the Collateral.
SECTION 5.11. SALES ON CREDIT. If the Trustee sells any of the Collateral
on credit, Debtor will be credited only with payments actually made by the
purchaser, received by Secured Party and applied to the Indebtedness. If the
purchaser fails to pay for the Collateral, Secured Party may resell the
Collateral, and Debtor shall be credited with the proceeds of the sale.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. WAIVERS. Debtor expressly waives notice of nonpayment, demand,
presentment, protest or notice of protest in relation to the Secured Notes
Documents or the Collateral. No delay or omission of the Trustee in exercising
or enforcing any of its rights, powers, privileges, options or remedies under
this Agreement shall constitute a waiver thereof, and no waiver by the Trustee
of any default by Debtor shall operate as a waiver of any other default.
SECTION 6.2. REMEDIES NOT EXCLUSIVE. All rights and remedies of the Trustee
under this Agreement shall be cumulative and not alternative or exclusive,
irrespective of any other collateral guaranty, right or remedy and may be
exercised by the Trustee at such time or times and in such order as the Trustee,
in its sole discretion, may determine, and are for the sole benefit of the
Trustee. The exercise or failure to exercise such rights and remedies shall not
result in liability to Debtor or others except in the event of willful
misconduct or bad faith by the Trustee, and in no event shall the Trustee be
liable for more than it actually receives as a result of the exercise or failure
to exercise such rights and remedies.
SECTION 6.3. SUCCESSORS AND SURVIVAL. This Agreement is entered into for
the benefit of the parties hereto and their successors and assigns. It shall be
binding upon and shall inure to the benefit of said parties, their successors
and assigns, and shall remain in force and effect until terminated as to future
transactions by a Record Authenticated by the parties. All representations,
warranties and covenants shall survive the execution hereof
SECTION 6.4. NOTICES. Wherever this Agreement provides for notice to any
party (except as expressly provided to the contrary), it shall be given by
messenger, facsimile, certified U.S. Mail with return receipt requested, or
nationally recognized overnight courier with receipt
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requested, effective when received by the party to whom addressed, and shall be
addressed as follows, or to such other address as the party affected may
hereafter designate:
If to the Trustee: XX Xxxxxx Xxxxx Bank
000 Xxxxxx 0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy: Xxxxxxx X. Xxxxxx, Xx.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Tel.: (000) 000-0000
Fax: (000) 000-0000
If to debtor: Castle Brands (USA) Corp.
00-00 Xxxxx Xxxxxx
Xxxxx X
Xxxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx, President
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxxxx Xxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx XX
Tel: (000) 000-0000
Fax: (000) 000-0000
SECTION 6.5. ENTIRE AGREEMENT; AMENDMENTS; TRUSTEE'S CONSENT. This
Agreement (including the Exhibits and Schedules thereto) and the other Secured
Notes Documents supersede, with respect to their subject matter, all prior and
contemporaneous agreements, understandings, inducements or conditions between
the respective parties, whether express or implied, oral or written. No
amendment or waiver of any provision of this Agreement or any of the Secured
Notes Documents, nor consent to any departure by Debtor therefrom, shall in any
event be effective unless the same shall be in a Record Authenticated by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 6.6. CROSS DEFAULT; CROSS COLLATERAL. Debtor hereby agrees that (a)
all other agreements between Debtor and the Trustee are hereby amended so that a
default under this Agreement is a default under all such other agreements and a
default under any of such other agreements is a default under this Agreement,
and (b) the Collateral under this Agreement secures the Obligations now or
hereafter outstanding under all other agreements between Debtor
11
and the Trustee and the Collateral pledged under any other agreement with the
Trustee secures the Obligations under this Agreement.
SECTION 6.7. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 6.8. SEVERABILITY OF PROVISIONS. Any provision of this Agreement or
any of the other Secured Notes Documents that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or the other Secured Notes Documents or affecting
the validity or enforceability of such provision in any other jurisdiction.
SECTION 6.9. TABLE OF CONTENTS; HEADINGS. The table of contents and
headings preceding the text of this Agreement are inserted solely for
convenience of reference and shall not constitute a part of this Agreement or
affect its meaning, construction or effect.
SECTION 6.10. EXHIBITS AND SCHEDULES. All of the Exhibits and Schedules to
this Agreement are hereby incorporated by reference herein and made a part
hereof
SECTION 6.11. CONFLICTS OF LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York;
provided, however, that if any of the Collateral shall be located in any
jurisdiction other than New York, the laws of such jurisdiction shall govern the
method, manner and procedure for foreclosure of the Trustees' lien upon such
Collateral and the enforcement of the Trustee's other remedies in respect of
such Collateral to the extent that the laws of such jurisdiction are different
from or inconsistent with the laws of New York.
SECTION 6.12. TERM. This Agreement shall commence on the date first set
forth above and continue through May 31, 2007 and, thereafter, automatically
shall continue on a month to month basis. Provided, however, that any
termination of this Agreement shall be on not less than four (4) months' prior
written notice from Trustee.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
12
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
CASTLE BRANDS (USA) CORP.
By: /s/ Xxxx Xxxxxxx
------------------------------------
XXXX XXXXXXX
President
JPMORGAN CHASE BANK, AS TRUSTEE
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
13
SCHEDULE 3.1 (C)
INVENTORY LOCATIONS
(ALL ARE THIRD PARTY LOCATIONS)
WESTERN CARRIERS Contact
0000 00xx Xxxxxx Xxxx Xxxx
Xxxxx Xxxxxx, XX 00000 X 7247
201.869.3300
WESTERN WINE SERVICES
000 Xxxxx Xxxxx
Xxxxxxxx Xxxxxx, XX 00000
800.999.8463
WASHINGTON STATE LIQUOR BOARD
Dist. Ctr./Valley Ctr. Corp. Park
0000X Xxxxxx XX, Xxxx. 0, #000
Xxxxxx, XX 00000-0000
360.664.1669
VERMONT DEPT OF LIQUOR CONTROL
Xxxxx Xxxxxxxx Xxxxx, Xxxxxx 00
Xxxxxxxxxx, XX 00000-0000
802.828.2345
VIRGINIA DEPT OF ALCOHOLIC BEVERAGE CONTROL
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
804.213.4400
OHIO DEPT OF LIQUOR Ship To:
Xxxx To: Universal Marketing/Handl-It
Ohio Dept of Taxation 00000 Xxxxxx Xxxxxx
Excise Tax Division Xxxxxx, XX 00000
X.X. Xxx 000
Xxxxxxxx, XX 00000 Universal Marketing / Xxxxx & Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Universal Marketing / North Coast Logistics
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
NEW HAMPSHIRE STATE LIQUOR COMMISSION
Xxxx To: Ship To:
X.X. Xxx 000 Xxx Xxxxxxxxx
00
Xxxxxxx, XX 00000 00 Xxxxxxx Xxxx
803.271.2167 Xxxxxx, XX 00000
MICHIGAN LIQUOR CONTROL COMMISSION
Xxxx To: Ship To:
0000 Xxxxxx Xxxxx Encore Services Inc
X.X. Xxx 00000 0000 Xxxxx
Xxxxxxx, XX 00000-0000 Xxxxxxx, XX 00000
517.322.1345
OREGON LIQUOR CONTROL COMMISSION
Xxxx To: Ship To:
X.X. Xxx 00000 0000 XX XxXxxxxxxx Xxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
503.872.5091
NORTH CAROLINA ABC BOARD
Xxxx To: Various Locations Ship To:
Cumberland Co X X Xxxxx Management
Gastonia ABC 0000 Xxxxx Xxxx
Xxxxxxx Xxxxxxxxx ABC Xxxxxxx, XX 00000
High Point ABC
Sylva ABC
Town of Xxxxxx City ABC
ALABAMA ABC BOARD
0000 Xxxxxx xxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
IDAHO LIQUOR DISPENSARY
Xxxx To: Ship To:
X.X. Xxx 000000 0000 Xxxxxx
Xxxxx, XX 00000-0000 Xxxxx, XX 00000
208.334.2524
MONTANA LIQUOR DIVISION
Xxxx To: Ship To:
X.X. Xxx 0000 0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
406.444.0700
15
EXHIBIT A
Alcoholic Beverages
Castle Brands (USA) Corp. Alcoholic Beverages
Knappogue Castle Whiskey
Celtic Crossing Liqueur
Born Vodka
Sea Wynde Rum
British Royal Navy Imperial Rum
Xxxxx'x Irish Cream
Clontarf Irish Whiskey and related Clontarf brands
Schedule 3.3(a)
