AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of September 20, 1996
between CYGNE DESIGNS, INC., a Delaware corporation having an office at 0000
Xxxxxxxx, Xxx Xxxx, XX 00000 (the "Company"), and THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED, a foreign banking corporation acting through its
New York Branch (the "Bank").
W I T N E S S E T H :
WHEREAS, the Company has provided a security interest to the Bank under a
Security Agreement dated as of September 28, 1995 (as modified and supplemented
and in effect from time to time, the "Existing Agreement");
WHEREAS, the Company has requested that the Existing Agreement, as amended
prior to the date hereof and as amended and modified hereby, be restated in its
entirety to reflect the amendment of certain provisions thereof; and
WHEREAS, the Company and the Bank are parties to an Amended and Restated
Credit Agreement dated as of September 20, 1996 (as modified and supplemented
and in effect from time to time, the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for extensions of credit (by issuing letters
of credit and making loans) to be made by the Bank to the Company in an
aggregate face or principal amount not exceeding $17,500,000;
NOW, THEREFORE, to induce the Bank to enter into the Credit Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company has agreed to continue to pledge and grant
a security interest in the Collateral (as hereinafter defined) as security for
the Secured Obligations (as hereinafter defined). Accordingly, the parties
hereto agree that the Original Agreement is hereby amended and restated in its
entirety as follows:
Section 1. Definitions. Terms defined in the Credit Agreement are used
herein as defined therein. In addition, as used herein:
"Accounts" shall have the meaning ascribed thereto in Section 3(e) hereof.
"CAT Shares" shall mean the 6,000 validly issued, fully paid and
nonassessable shares of common stock, par value $0.01 per share, of CAT US,
Inc., a Delaware corporation, as set forth on Annex I hereto.
"Collateral" shall have the meaning ascribed thereto in Section 3 hereof.
"Documents" shall have the meaning ascribed thereto in Section 3(j) hereof.
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"Equipment" shall have the meaning ascribed thereto in Section 3(h)
hereof.
"Instruments" shall have the meaning ascribed thereto in Section 3(f)
hereof.
"Inventory" shall have the meaning ascribed thereto in Section 3(g) hereof.
"Issuers" shall mean, collectively, the respective corporations identified
in Annex 1 hereto under the caption "Issuers".
"Lockbox Account" shall have the meaning ascribed thereto in Section 4(a)
hereof.
"Pledged Stock" shall have the meaning ascribed thereto in Section 3(b)
hereof.
"Secured Obligations" shall mean, collectively, (a) the principal of and
interest on the Loans made by the Bank to, and the Notes held by the Bank of,
the Company, and all other amounts from time to time owing to the Bank by the
Company under the Credit Agreement or the Notes, (b) all obligations of the
Company to the Bank hereunder, and (c) all obligations of the Company under any
other Credit Document to which it is party.
"Stock Collateral" shall mean, collectively, the Collateral described in
clauses (a) through (d) of Section 3 hereof and the proceeds of and to any such
property and, to the extent related to any such property or such proceeds, all
books, correspondence, credit files, records, invoices and other papers.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect in the State of New York from time to time.
Section 2. Representations and Warranties. The Company represents and
warrants to the Bank that:
(a) the Company is the sole beneficial owner of the Collateral and no
Lien exists or will exist upon any Collateral at any time (and, with
respect to the Stock Collateral, no right or option to acquire the same
exists in favor of any other Person), except for (i) Liens permitted under
Section 8.06 of the Credit Agreement and (ii) the pledge and security
interest in favor of the Bank created or provided for herein which pledge
and security interest constitutes a first priority perfected pledge and
security interest in and to all of the Collateral;
(b) the Pledged Stock evidenced by the certificates identified in
Annex 1 hereto and the ATSC Shares are, and all other Pledged Stock will
be, duly authorized, validly issued, fully paid and nonassessable and none
of such Pledged Stock is or will be subject to
SECURITY AGREEMENT
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any contractual restriction, or any restriction under the charter or
by-laws of the respective Issuers of such Pledged Stock, upon the transfer
of such Pledged Stock (except for any such restriction contained herein or
in the Credit Agreement or, with respect to the ATSC Shares, in the
Stockholders Agreement or under Federal and state securities law);
(c) the Pledged Stock evidenced by the certificates identified in
Annex 1 hereto constitutes the indicated percentage of the total issued and
outstanding shares of capital stock of any class of the Issuers
beneficially owned by the Company on the date hereof (whether or not
registered in the name of the Company) and said Annex 1 correctly
identifies, as at the date hereof; the respective Issuers of such Pledged
Stock, the respective class and par value of the shares comprising such
Pledged Stock and the respective number of shares (and registered owner
thereof) evidenced by each such certificate; and
(d) any goods now or hereafter produced by the Company or any of its
Subsidiaries included in the Collateral have been and will be produced in
compliance with the requirements of the Fair Labor Standards Act, as
amended.
Section 3. Collateral. As collateral security for the prompt payment in
full when due (whether at stated maturity, by acceleration or otherwise) of the
Secured Obligations, the Company hereby continues to pledge and grant to the
Bank a security interest in all of the Company's right, title and interest in
the following property, whether now owned by the Company or hereafter acquired
and whether now existing or hereafter coming into existence, and wherever
located (all being collectively referred to herein as "Collateral"):
(a) all of the ATSC Shares received by the Company in exchange for the
sale of the CAT Shares in connection with the CAT Transaction, which shares
of common stock, and certain other assets of the Company, the Company has
previously pledged to the Bank pursuant to the Existing Agreement;
(b) the respective shares of common/preferred stock of the Issuers
evidenced by the certificates identified in Annex 1 hereto and all other
shares of capital stock of whatever class of the Issuers, now or hereafter
owned by the Company, together with in each case the certificates
evidencing the same (collectively, together with the ATSC Shares, the
"Pledged Stock");
(c) all shares, securities, moneys or property representing a dividend
on any of the Pledged Stock, or representing a distribution or return of
capital upon or in respect of the Pledged Stock, or resulting from a
split-up, revision, reclassification or other like change of the Pledged
Stock or otherwise received in exchange therefor, and any subscription
warrants, rights or options issued to the holders of, or otherwise in
respect of, the Pledged Stock;
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(d) without affecting the obligations of the Company under any
provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger in which any Issuer is not the
surviving corporation, all shares of each class of the capital stock of the
successor corporation (unless such successor corporation is the Company
itself) formed by or resulting from such consolidation or merger;
(e) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of the Company constituting any right to the
payment of money, including (but not limited to) all moneys due and to
become due to the Company in respect of any loans or advances for the
purchase price of Inventory or Equipment or other goods sold or leased or
for services rendered, all moneys due and to become due to the Company
under any guarantee (including a letter of credit) of the purchase price of
Inventory or Equipment sold by the Company and all tax refunds (such
accounts, general intangibles and moneys due and to become due being herein
called collectively "Accounts");
(f) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of the Company evidencing,
representing, arising from or existing in respect of, relating to, securing
or otherwise supporting the payment of, any of the Accounts, including (but
not limited to) promissory notes, drafts, bills of exchange and trade
acceptances (herein collectively called "Instruments");
(g) all inventory (as defined in the Uniform Commercial Code) of the
Company, all goods obtained by the Company in exchange for such inventory,
and any products made or processed from such inventory including all
substances, if any, commingled therewith or added thereto (herein
collectively called "Inventory");
(h) all equipment (as defined in the Uniform Commercial Code) of the
Company (herein collectively called "Equipment");
(i) each contract and other agreement of the Company relating to the
sale or other disposition of Inventory or Equipment;
(j) all documents of title (as defined in the Uniform Commercial Code)
or other receipts of the Company covering, evidencing or representing
Inventory or Equipment (herein collectively called "Documents");
(k) all rights, claims and benefits of the Company against any Person
arising out of, relating to or in connection with Inventory or Equipment
purchased by the Company, including, without limitation, any such rights,
claims or benefits against any Person storing or transporting such
Inventory or Equipment;
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(1) the balance from time to time in the Lockbox Account;
(m) the balance from time to time in the Collateral Account;
(n) the balance from time to time in the Escrow Account; and
(o) all other tangible or intangible property of the Company,
including, without limitation, all proceeds, products and accessions of and
to any of the property of the Company described in clauses (a) through (n)
above in this Section 3 (including, without limitation, any proceeds of
insurance thereon), and, to the extent related to any property described in
said clauses or such proceeds, products and accessions, all books,
correspondence, credit files, records, invoices and other papers, including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of the Company or any
computer bureau or service company from time to time acting for the
Company.
Section 4. Lockbox Account.
(a) The Company shall maintain a lockbox account (the "Lockbox
Account") with Marine Midland Bank (the "Lockbox Bank") in New York City,
and shall instruct debtors relating to the Accounts to make all remittances
directly to the Lockbox Account, which account (together with any related
disbursement account) shall be subject to the exclusive control of the
Bank; provided, however, unless and until an Event of Default shall have
occurred and be continuing, the Company shall have access to the proceeds
of such bank accounts. Upon the occurrence of an Event of Default, the
Company shall cease to have access to such bank accounts and the Bank shall
have sole access. The Company shall promptly deposit in the Lockbox Account
all payments relating to the Accounts received directly by the Company.
Without the prior written consent of the Bank, the Company shall not
provide debtors relating to the Accounts with payment instructions other
than as set forth above.
(b) The Lockbox Bank shall serve as the agent of the Bank with respect
to (i) the depositing of items comprising collections on Accounts and (ii)
the disbursements to be paid from any disbursement account relating to the
Lockbox Account. The rights, duties and obligations of the Lockbox Bank,
including, without limitation, its fees, shall be as such are set forth in
the related agreement between the Bank and the Lockbox Bank. The Company
shall pay all fees in connection with the Lockbox Account.
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Section 5. Further Assurances; Remedies. In furtherance of the grant of the
pledge and security interest pursuant to Section 3 hereof, the Company hereby
agrees with the Bank as follows:
5.01 Delivery and Other Perfection. The Company shall:
(a) if any of the above-described shares, securities, monies or
property required to be pledged by the Company under clauses (a), (b), (c)
and (d) of Section 3 hereof are received by the Company, forthwith either
(x) transfer and deliver to the Bank such shares or securities so received
by the Company (together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated stock powers
duly executed in blank) all of which thereafter shall be held by the Bank,
pursuant to the terms of this Agreement, as part of the Collateral or (y)
take such other action as the Bank shall deem necessary or appropriate to
duly record the Lien created hereunder in such shares, securities, monies
or property referred to in said clauses (a), (b), (c) and (d);
(b) deliver and pledge to the Bank any and all Instruments, endorsed
and/or accompanied by such instruments of assignment and transfer in such
form and substance as the Bank may request; provided, that so long as no
Default shall have occurred and be continuing, the Company may retain for
collection in the ordinary course any Instruments received by it in the
ordinary course of business and the Bank shall, promptly upon request of
the Company, make appropriate arrangements for making any other Instrument
pledged by the Company available to it for purposes of presentation,
collection or renewal (any such arrangement to be effected, to the extent
deemed appropriate by the Bank, against trust receipt or like document);
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may
be necessary or desirable (in the judgment of the Bank) to create,
preserve, perfect or validate any security interest granted pursuant hereto
or to enable the Bank to exercise and enforce its rights hereunder with
respect to such security interest, including, without limitation, causing
any or all of the Stock Collateral to be transferred of record into the
name of the Bank or its nominee (and the Bank agrees that if any Stock
Collateral is transferred into its name or the name of its nominee, the
Bank will thereafter promptly give to the Company copies of any notices and
communications received by it with respect to the Stock Collateral),
provided that notices to account debtors in respect of any Accounts or
Instruments shall be subject to the provisions of clause (g) below;
(d) upon the acquisition after the date hereof by the Company of any
Equipment covered by a certificate of title or ownership, cause the Bank to
be listed as the lienholder
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on such certificate of title and within 120 days of the acquisition
thereof deliver evidence of the same to the Bank;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Bank may reasonably require in order to reflect the security
interests granted by this Agreement;
(f) permit representatives of the Bank, upon reasonable notice, at any
time during normal business hours to inspect and make abstracts from its
books and records pertaining to the Collateral, and permit representatives
of the Bank to be present at the Company's place of business to receive
copies of all communications and remittances relating to the Collateral,
and forward copies of any notices or communications by the Company with
respect to the Collateral, all in such manner as the Bank may require; and
(g) upon the occurrence and during the continuance of any Default,
upon request of the Bank, promptly notify (and the Company hereby
authorizes the Bank so to notify) each account debtor in respect of any
Accounts or Instruments that such Collateral has been assigned to the Bank
hereunder, and that any payments due or to become due in respect of such
Collateral are to be made directly to the Bank.
5.02 Other Financing Statements and Liens. Without the prior written
consent of the Bank, the Company shall not file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any
financing statement or like instrument with respect to the Collateral in which
the Bank is not named as the sole secured party.
5.03 Preservation of Rights. The Bank shall not be required to take steps
necessary to preserve any rights against prior parties to any of the Collateral.
5.04 Special Provisions Relating to Stock Collateral.
(a) The Company will cause the Stock Collateral to constitute at all
times the percentage indicated on Annex 1 hereto of the total number of
shares of each class of capital stock of each Issuer then outstanding, but
in no event shall such percentage exceed 65% with respect to any class of
capital stock of a Foreign Subsidiary; provided, however, the ATSC Shares
may constitute a decreasing percentage of the capital stock of the related
Issuer in accordance with the terms and conditions of the Credit Agreement.
(b) So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Stock Collateral
for all purposes not inconsistent with the terms
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of this Agreement, the Credit Agreement, the Notes or any other
instrument or agreement referred to herein or therein, provided that the
Company agrees that it will not vote the Stock Collateral in any manner
that is inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any such other instrument or agreement (as
determined by the Bank in its reasonable judgment); and the Bank shall
execute and deliver to the Company or cause to be executed and delivered to
the Company all such proxies, powers of attorney, dividend and other
orders, and all such instruments, without recourse, as the Company may
reasonably request for the purpose of enabling the Company to exercise the
rights and powers which it is entitled to exercise pursuant to this Section
5.04(b).
(c) All shares, securities, moneys or other property representing
stock which are payable in connection with dividends or liquidating
dividends (including without limitation in connection with the liquidation
of any Issuer on or after such liquidation) and (ii) all additional
Collateral described in clauses (a), (b), (c) and (d) of Section 3 hereof
constituting a distribution or return of capital upon or in respect of any
Pledged Stock, or resulting from a conversion, split-up, revision,
reclassification or other like change of any Pledged Stock or received in
exchange therefor as a result of a merger, consolidation or otherwise,
shall be paid or transferred directly to the Bank (or its agent or nominee,
as the case may be), as part of the Collateral subject to this Agreement.
(d) If any Event of Default shall have occurred, then so long as such
Event of Default shall continue, and whether or not the Bank exercises any
available right to declare any Secured Obligation due and payable or seeks
or pursues any other relief or remedy available to it under applicable law
or under this Agreement, the Credit Agreement, the Notes or any other
agreement relating to such Secured Obligation, all dividends and other
distributions on the Stock Collateral shall be paid directly to the Bank
and retained by it in the Custodial Trust Account as part of the Stock
Collateral, subject to the terms of this Agreement, and, if the Bank shall
so request in writing, the Company agrees to execute and deliver to the
Bank appropriate additional dividend, distribution and other orders and
documents to that end, provided that if such Event of Default is cured, any
such dividend or distribution theretofore paid to the Bank shall, upon
request of the Company (except to the extent theretofore applied to the
Secured Obligations) be returned by the Bank to the Company.
5.05 Events of Default etc. During the period during which an Event of
Default shall have occurred and be continuing:
(i) the Company shall, at the request of the Bank, assemble the
Collateral owned by it at such place or places, reasonably convenient
to both the Bank and the Company, designated in its request;
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(ii) the Bank may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may extend
the time of payment, arrange for payment in installments, or otherwise
modify the terms of, any of the Collateral;
(iii) the Bank shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
(in the case of the ATSC Shares, subject to the Stockholders
Agreement) as if the Bank were the sole and absolute owner thereof
(and the Company agrees to take all such action as may be appropriate
to give effect to such right);
(iv) the Bank in its discretion may, in its name or in the name
of the Company or otherwise, demand, xxx for, collect or receive any
money or property at any time payable or receivable on account of or
in exchange for any of the Collateral, but shall be under no
obligation to do so; and
(v) the Bank may (in the case of the ATSC Shares, subject to the
Stockholders Agreement), upon 10 Business Days' prior written notice
to the Company of the time and place, with respect to the Collateral
or any part thereof which shall then be or shall thereafter come into
the possession, custody or control of the Bank, or any of its agents,
sell, lease, assign or otherwise dispose of all or any of such
Collateral, at such place or places as the Bank deems best, and for
cash or on credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of time or
place thereof (except such notice as is required above or by
applicable statute and cannot be waived) and the Bank or anyone else
may be the purchaser, lessee, assignee or recipient of any or all of
the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale), and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of the
Company, any such demand, notice or right and equity being hereby
expressly waived and released. The Bank may, without notice or
publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time
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and place fixed for the sale, and such sale may be made at any
time or place to which the same may be so adjourned.
The proceeds of each collection, sale or other disposition under this
Section 5.05 shall be applied in accordance with Section 5.09 hereof.
The Company recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as amended, and applicable state securities laws,
the Bank may be compelled, with respect to any sale of all or any part of the
Collateral, to limit purchasers to those who will agree, among other things, to
acquire the Collateral for their own account, for investment and not with a view
to the distribution or resale thereof. The Company acknowledges that any such
private sales may be at prices and on terms less favorable to the Bank than
those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the Bank
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the
respective Issuer thereof to register it for public sale.
5.06 Deficiency. If the proceeds of sale, collection or other realization
of or upon the Collateral pursuant to Section 5.05 hereof are insufficient to
cover the costs and expenses of such realization and the payment in full of the
Secured Obligations, the Company shall remain liable for any deficiency.
5.07 Removals, etc. Without at least 30 days prior written notice to the
Bank, the Company shall not (i) maintain any of its books or records with
respect to the Collateral at any office or maintain its chief executive office
or its principal place of business at any place, or permit any Inventory or
Equipment to be located anywhere other than at the address indicated beneath the
signature of the Company to the Credit Agreement or at one of the locations
identified in Annex 2 hereto or in transit from one of such locations to another
(or, with respect to Inventory, in transit from one of such locations to a
customer of the Company) or (ii) change its corporate name, or the name under
which it does business, from the name shown on the signature page hereto.
5.08 Private Sale. The Bank shall incur no liability as a result of the
sale of the Collateral, or any part thereof, at any private sale pursuant to
Section 5.05 hereof conducted in a commercially reasonable manner. The Company
hereby waives any claims against the Bank arising by reason of the fact that the
price at which the Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale or was less than
the aggregate amount of the Secured Obligations, even if the Bank accepts the
first offer received and does not offer the Collateral to more than one offeree.
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5.09 Application of Proceeds. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash at the time held
by the Bank under Section 4 hereof or this Section 5, shall be applied by the
Bank:
First, to the payment of the costs and expenses of such collection,
sale or other realization, including reasonable out-of-pocket costs and
expenses of the Bank and the fees and expenses of its agents and counsel,
and all expenses and advances made or incurred by the Bank in connection
therewith;
Next, to the payment in full of the Secured Obligations then due and
payable, ratably in accordance with the respective outstanding amounts
thereof then due and payable; and
Finally, to the payment to the Company, or its successors or assigns,
or as a court of competent jurisdiction may direct, of any surplus then
remaining.
As used in this Section 5, "proceeds" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the Company or any issuer of or obligor on any of the
Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or powers granted by
this Agreement to the Bank while no Event of Default has occurred and is
continuing, upon the occurrence and during the continuance of any Event of
Default the Bank is hereby appointed the attorney-in-fact of the Company for the
purpose of carrying out the provisions of this Section 5 and taking any action
and executing any instruments which the Bank may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as the Bank shall be entitled under this Section 5 to make
collections in respect of the Collateral, the Bank shall have the right and
power to receive, endorse and collect all checks made payable to the order of
the Company representing any dividend, payment, or other distribution in respect
of the Collateral or any part thereof and to give full discharge for the same.
5.11 Perfection. Prior to or concurrently with the execution and delivery
of this Agreement, the Company shall (i) file such financing statements and
other documents in such offices as the Bank may request to perfect the security
interests granted by Section 3 of this Agreement, and (ii) deliver to the Bank
all certificates identified in Annex 1 hereto, accompanied by undated stock
powers duly executed in blank.
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5.12 Termination. When all Secured Obligations shall have been paid in full
and the Facilities of the Bank under the Credit Agreement and all liabilities of
the Bank relating to issued Letters of Credit shall have expired or been
terminated, this Agreement shall terminate, and the Bank shall forthwith cause
to be assigned, transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining Collateral and
money received in respect thereof, to or on the order of the Company. The Bank
shall also execute and deliver to the Company upon such termination such Uniform
Commercial Code termination statements and such other documentation as shall be
reasonably requested by the Company to effect the termination and release of the
Liens on the Collateral.
5.13 Expenses. The Company agrees to pay to the Bank all out-of-pocket
expenses (including reasonable expenses for legal services of every kind) of, or
incident to, the enforcement of any of the provisions of this Section 5, or
performance by the Bank of any obligations of the Company in respect of the
Collateral which the Company has failed or refused to perform, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of the Bank in respect
thereof, by litigation or otherwise, including expenses of insurance, and all
such expenses shall be Secured Obligations to the Bank secured under Section 3
hereof.
5.14 Further Assurances. The Company agrees that, from time to time upon
the written request of the Bank, the Company will execute and deliver such
further documents and do such other acts and things as the Bank may reasonably
request in order fully to effect the purposes of this Agreement.
5.15 Collateral Audit. The Company shall permit representatives of the Bank
to undertake an annual audit of the Collateral, and the Company agrees to pay
all reasonable expenses of the Bank incurred in connection therewith.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Bank or any of its agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Bank or any of its agents of any
right, power or remedy hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies herein are
cumulative and are not exclusive of any remedies provided by law.
6.02 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
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6.03 Notices. All notices, requests, consents and demands hereunder shall
be in writing and telexed, telecopied, telegraphed, cabled or delivered to the
intended recipient at its address or telex number specified pursuant to Section
10.02 of the Credit Agreement and shall be deemed to have been given at the
times specified in said Section 10.02.
6.04 Waivers, etc. The terms of this Agreement may be waived, altered or
amended only by an instrument in writing duly executed by the Company and the
Bank. Any such amendment or waiver shall be binding upon the Bank, each holder
of any Secured Obligation and the Company.
6.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Company,
the Bank, and each holder of the Secured Obligations (provided, however, that
the Company shall not assign or transfer its rights hereunder without the prior
written consent of the Bank).
6.06 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same instrument
and any of the parties hereto may execute this Agreement by signing any such
counterpart.
6.07 Banks. The Bank may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
6.08 Severability. If any provision hereof is invalid and unenforceable in
any applicable jurisdiction, then, to the fullest extent permitted by law, (i)
the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Bank in order to
carry out the intentions of the parties hereto as nearly as may be possible and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
SECURITY AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed as of the day and year first above written.
CYGNE DESIGNS, INC.
By /s/ XXX X. XXXXX
-------------------------
Name: Xxx X. Xxxxx
Title: Vice President--Finance
Address for Notices:
0000 Xxxxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED, NEW YORK BRANCH
By /s/ XXX XXXXXX
-------------------------
Name: Xxx Xxxxxx
Title: Vice President
Address for Notices:
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: NYK CBU TRS
Telecopy: (000) 000-0000
ANNEX 1
LIST OF PLEDGED STOCK
Certificate Registered
Issuer Nos. Owner Number of Shares
------ ----------- ---------- ----------------
1. CAT US, Inc. #9 Cygne Designs, Inc. 6,000 shares of
common stock having
a par value of
$0.01 per share
(60% of outstanding
capital stock)
2. Cygne Group (F.E.) #7 Cygne Designs, Inc. 65 shares of 99
Limited (formerly shares of common
known as Cygne Design stock having a par
F.E. Limited) value of HK$1,000
per share (65% of
outstanding capital
stock)
3. M.T.G.I. Textile N/A Cygne Designs, Inc. 109,050 ordinary
Manufacturers shares having a
Group (Israel) Ltd. nominal value of
NIS 1.00 each (50%
of outstanding
capital stock)
4. T. Wear Company S.r.l. N/A Cygne Designs, Inc. Shares for lire
150,000,000 (50% of
share capital)
5. JMB International, S.A. #18-49 Cygne Designs, Inc. 32 shares of stock
having a par value
of Ql00.00 each
(64% of outstanding
capital stock)
ANNEX 2
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
DOMESTIC LOCATIONS
------------------
FACTORIES
---------
AC Services
0000 XX 000 Xxxxxx
Xxxxx, XX 00000
AMP/Andy & Xxxxx
000 X. 00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Artland
00-00 Xxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Bethel Industries
000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Dochine Inc.
00-00 Xxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Double Luck Fashion
000 0xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Golden Craft
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Gregarious Fashions
00-00 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
H. Production/HH
000 Xxxx 00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
JC Fashiona
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
JDS Cutting
000 Xxxx 00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
JDLS
00-00 00xx Xxxxxx
Xxxx Xxxxxx Xxxx, XX 00000
Xxxxxx Fashions/Sky Blue
00 Xxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Key Trading
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
KTJ
000 Xxxxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
L'assassino
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Lilan Fashion
000X 00xx Xxxxxx
Xxxxxxxx, XX 00000
LTW
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Luster Star
000 Xxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
May Fashion
000 0xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Metro Fusing
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
Mikado Fashions Inc.
00-00 Xxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
MRC
13 V2 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
New JKT
00 Xxxx 00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
One Notch-Up
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Our Fashion
000 0xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Refine Fashion
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Reliable Cutting Inc.
000 Xxxx 00xx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
Sky Blue
000 Xxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, XX 00000
SSCI
0000 Xxxx Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Sun East
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Triple 8
000 00xx Xxxxxx
Xxxxxxxx, XX 00000
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
WAREHOUSES
----------
Flag Trucking Service Co. Inc.
0 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Freight-A-Rangers
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxx, XX
Pronto Cargo Brokers Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, XX 00000
Summit
Building 00
Xxxxxxxxxx Xxxxxx
Xxxxxx, XX
XXXXXXXXX XXXXXXXX
------------------
Xxxxx Xxxxxxxxxxxxx Xx.
Xxxx Xxxxxx Industrial
Aptdo. Postal 2A
La Xxxx, D.R.
Dominican Republic
Modas New York
Industrial Free Zone
Santiago
Dominican Republic
Young's NY X.X.
Xxxx France Industrial
Moca
Dominican Republic
GUATEMALA
---------
Dong Bang
KM 495 Carretaera Panamericana
El Tejer. Chimaltenango. Guatemala
Xxxx Xxxxxx, S.A.
KM 17.5 Xxxx
San Xxxx, Sacatepequez, Guatelama
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
JMB Mfg. S.A.
0x Xxxxx 00-00
Xxxx 2. Mixco
Col. Molino De Las Xxxxxx
Guatemala City, Guatemala
Xxx Xxxxx S.A.
KM 37.5 Xxxx XX
Granjas Xxxxxxxxxx
Xxxxxxxx, Sacatepequez, Guatemala
EL SALVADOR
-----------
Do-All Industries S.A. De C.V.
Xxxx Xxxxxx El Progreso
XX 00 0/0 Xxxxxxxxx Xx Xxxxxx Xx Xx Xxxxxxxx
Nueva An Salvador
El Salvador
LIDO
Xxxx Xxxxxx El Progreso
KM 11 1/2 Carretera al Puerto De La Libertad
Nueva San Salvador
El Xxxxxxxx
XXXX KONG
---------
Cygne Far East Ltd.
Room 715-718
20 Salisbury Road, TST
New World Office Building, West Wing
Kowloon, Hong Kong
Romax Investment Ltd
Flat E & F, 2nd Floor
Xxxx Xxxx Industrial Xxxxxxxx
0 Xxx Xxx Xxxxxx
Xxx Xx Xxxx
Xxxxxxx, Xxxx Xxxx
Future Fashion
0 Xxxxx Xxx Xxxxxx
Xxxx Xxxx
Xxxx Xxxx
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
Golden True International Ltd
0 Xx Xxxx Xxxxxx
Xxx Xx Xxxx
Xxxxxxx
Xxxx Xxxx
Merrison Garment Co.
Merrison Center
107-109 Xxx Xxx Street
Xxxx Xxxx
Kowloon, Hong Kong
Pologain Garment Factory
Room 4-B, 8th Floor
Vanla Industrial Center
Xxx Xxx Pai Road
Xxxx Xxxxx, N.T.
Hong Kong
THAILAND
--------
Biotex
Address to follow
HUNGARY
-------
Lantos
3963 Karcsa
Tarcsics U-1
Hungary
Sal-Kon Clothing Factory
X-0000 Xxxxxxxxxxx
Ruhagyari, U-32, PF: 29
Hungary
Soproni Ruhagyar
9400 Sopron
Rakozzi U-8
Hungary
ROMANIA
-------
Incom Vranco
51 Coda Voda Street
Foscani
Romania
Cygne Designs, Inc. ACTIVE
9/27/95 INVENTORY LOCATIONS
ITALY
-----
T-Wear Co
Via San Paolo. 1
Case lo Autosole
Firenze Signa 50018
Scandicci
Firenze
Italy
ISRAEL
------
MTGI Ltd
New Industrial Xxxx
Xxxxxx. 00000
Xxxxxx
