GLENGATE APPAREL, INC.
c/o Statco, Inc.
000 00xx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
October 22, 1998
Xxxxxxx Factors, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Pursuant to the terms of a Security Agreement (Accounts
Receivable - Financing dated September 25, 1996, a Security
Interest in Inventory under Uniform Commercial Code Supplement to
Financing or Factoring Contract dated September 25, 1996, a
Security Agreement - Goods and Chattels dated September 25, 1996
and associated documents (all as amended, modified, restated or
supplemented from time to time), the undersigned is indebted to you
in the sum of approximately $1,685,000 plus interest and costs
secured by security interests in your favor in all personal
property, including without limitation all Borrower's receivables,
general intangibles, inventory, goods, machinery and equipment
(collectively, the "Collateral"), including without limitation the
inventory assets described in Schedule A annexed hereto and made a
part hereof (the "Conveyed Collateral"). Because of the inability
of the undersigned to pay its debts and obligations to you, as
demanded in your letter to the undersigned dated October 21, 1998,
the receipt of which is hereby acknowledged, the undersigned
herewith grants to you all rights of possession in and to the
aforesaid Conveyed Collateral of the undersigned to be disposed of,
as you, in your best discretion, deem advisable and for you to
credit the net proceeds resulting from any sale or other
disposition to the account of the undersigned with you. Any such
net proceeds remaining after application thereof to the
undersigned's indebtedness to you (together with interest and
costs) shall be remitted to the undersigned.
This letter also serves as an authorization to any employee of
the undersigned or any third party to grant you, and the
undersigned hereby grants you, full and complete access to any
premises where the Conveyed Collateral is located to allow you to
take possession of any such Conveyed Collateral in order to enforce
your rights against and collect the liability due to you from the
undersigned. In addition, you may designate a custodian who shall
have the right, among other things, to change the locks on all
gates and doors providing access to such premises or the Conveyed
Collateral.
The undersigned further acknowledges that it has defaulted in
the payment of its debts and obligations to you and hereby waives
and renounces all of its rights to notification under Section 9-504
of the Uniform Commercial Code as adopted in the State of New
Jersey ("UCC") as to the sale or other disposition by you of the
Conveyed Collateral and under Sections 9-505 and 9-506 of the UCC
regarding acceptance of collateral as discharge of the obligations
of the undersigned to you and waiver of the undersigned's right to
redeem collateral, respectively.
The undersigned knowingly and intelligently waives any rights
it may have to notice and a hearing before a court of competent
jurisdiction and consents to your entry on the premises where the
aforesaid Conveyed Collateral is located for the purposes set forth
herein.
Very truly yours,
GLENGATE APPAREL, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------
(Name) Xxxxx X. Xxxxxxxxxx
(Title) President
