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LOCK BOX SERVICE AGREEMENT
LOCK BOX SERVICE AGREEMENT, dated as of September 14, 1995, among
MOVIE STAR, INC. (the "Company"), a corporation organized under the laws of the
State of New York, NATWEST BANK N.A., a New York banking corporation
("NatWest"), REPUBLIC NATIONAL BANK OF NEW YORK, a national banking association,
individually ("RNB") and as agent for itself and NatWest (the "Agent").
WHEREAS, in connection with the Credit and Security Agreement of
even date herewith (the "Credit Agreement") among the Company, RNB, NatWest and
the Agent, the parties desire to enter into a lock box service arrangement for
the Company, so that, from and after the date hereof, all payments in respect of
the accounts receivable of the Company shall be remitted to a post office box to
be opened and maintained by the Agent pursuant to this Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
1. All capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Credit Agreement.
2. The Company hereby appoints the Agent as its agent and authorizes the Agent
to rent, service, and have sole access to a post offices box, with Zip Code
[______], located at the Church Street Station Post Office, New York, New
York, (the "Post Office Box,") and to collect all mail deposited therein at
regular intervals.
3. The Agent shall, as soon as practicable after opening the Post Office Box,
notify the Company of the number thereof, and promptly thereafter, the
Company shall notify all of its customers and obligors on any accounts
payable to the Company which, in the ordinary course of the Company's
business, would be paid by checks or other instruments made payable to or
to the order of Movie Star, Inc., to remit payment in respect of such
accounts directly to the Post Office Box.
4. Except as specifically provided herein, the Agent shall, and is hereby
authorized by the Company to, endorse all checks, drafts, money orders and
all other negotiable instruments of payment (hereinafter referred to as
"items") contained in the mail collected from the Post Office Box in the
following manner:
"CREDIT TO ACCOUNT OF WITHIN NAMED PAYEE
AT REPUBLIC NATIONAL BANK OF NEW YORK
NEW YORK, NEW YORK"
provided that all items are made payable to or to the order of "Movie Star,
Inc.", or any close resemblance thereto, or any trade name or trade style
used by the Company. Items made payable to any name other than those
referred to above shall be forwarded by the Agent unprocessed to the
Company, and the Company shall, promptly upon receipt thereof, endorse such
items and return them to the Agent for processing in accordance with this
Agreement.
5. The Agent shall process each item received, and shall, on the third
Business Day after receipt of such item, credit the amount thereof first to
(i) amounts outstanding under the Loan Account, as such term is defined in
the Credit Agreement, and any other amounts payable by the Company to the
Agent, RNB or NatWest under the Credit Agreement, and then to (ii) any
account maintained by the Company with RNB. For purposes of this paragraph
5, (i) items shall be deemed received by the Agent on the Business Day on
which they are collected from the Post Office Box, and (ii) the third
Business Day after receipt of an item shall be determined without counting
the Business Day of receipt of such item.
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6. Any items bearing discrepancies between the written and numerical amounts
shall be credited for the written amount.
7. The Agent shall use due care to attempt to inspect and discover items which
bear a phrase to the effect that such items represent "Payment in Full" (or
words of similar import) and to forward them to the Company for
disposition; provided, however, that the Agent shall have no liability to
the Company if it processes any item that bears such language.
8. Post-dated items shall be either processed by the Agent, or forwarded to
the Company, in the Agent's sole discretion.
9. The Agent shall have the right to debit the Loan Account, as such term is
defined in the Credit Agreement, in the amount of all returned items. All
returned items shall be handled by the Agent in the following manner: (i)
all dishonored items returned the first time shall be re-presented a second
time, and (ii) all dishonored items returned the second time shall be
charged back and returned to the Company.
10. The Agent shall not process items received which do not bear a signature.
11. All items which are made payable in foreign funds, or made payable in U.S.
funds drawn on a foreign bank, shall be processed for collection and the
Company shall pay to the Agent the collection charges for such items
comparable to the charges that RNB customarily imposes for the collection
of like items.
12. The Agent shall provide to the Company, NatWest and RNB, each Business Day,
a lockbox collection report listing the items collected from the Post
Office Box on the immediately preceding Business Day. Such lockbox
collection report may, at the Agent's option, be provided by telecopier or
by any of the methods specified in paragraph 20 hereof. The Agent shall
endeavor to maintain, for a period of one (1) year, a microfilm record of
all items collected from the Post Office Box; provided, however, the Agent
shall have no liability to the Company for any failure to maintain such a
record.
13. The Company shall instruct all of its customers not to send any returned
merchandise to the Post Office Box. The Agent shall not be liable for any
returned merchandise received at the Post Office Box, but shall attempt to
forward said merchandise to the Company at the risk and expense of the
Company. Any expenses incurred by the Agent in connection with such
forwarding shall be paid by the Company to the Agent, on demand, and if not
so paid may be charged, as a Loan, to the Loan Account.
14. Annual rent on the Post Office Box, as assessed by the U.S. Postal Service,
shall be paid by the Company to the Agent, on demand, and if not so paid
may be charged, as a Loan, to the Loan Account.
15. The Company agrees to pay the Agent fees for the services herein described,
computed in accordance with RNB's schedule of fees for lock box services,
as in effect from time to time.
16. The Company hereby irrevocably appoints the Agent its agent under this
Agreement and authorizes the Agent to take such action and to exercise such
powers as are specifically delegated to it herein, together with such
powers as the Agent, in the reasonable exercise of its discretion, deems
incidental thereto. The Agent shall exercise the same degree of care and
shall give the same attention to the performance of its obligations under
this Agreement as if the services were being provided for the Agent itself;
provided, however, that neither the Agent nor any of its directors,
officers, employees or other agents shall be liable for any action taken or
omitted to be taken by it or them hereunder or in connection herewith,
except for its or their
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gross negligence or willful misconduct. The Company agrees to indemnify the
Agent, RNB and NatWest, and their directors, officers, employees and other
agents and save them harmless from any loss, damage, liability or expense
(including reasonable legal fees and expenses) incurred as a result of any
claim asserted against them in connection with any transactions related
hereto, unless such loss, damage, liability or expense is solely the result
of their gross negligence or willful misconduct.
17. Any other terms herein to the contrary notwithstanding, this Agreement
shall be deemed to be amended automatically, without notice to either
party, to comply with any statute, regulation, or ruling of any government
agency, including any regulations or rulings of the U.S. Postal Service, to
whose jurisdiction the Agent is subject.
18. This Agreement may not be modified or terminated orally.
19. This Agreement may be terminated by the Agent at any time upon at least
fifteen (15) days written notice. Upon receipt of such notice, the Company
shall notify its customers to discontinue use of the Post Office Box. After
the effective date of termination, the Agent shall have no responsibility
for any items received in the Post Office Box except to forward such items
by regular mail and at the Company's expense, for a period of thirty (30)
days after such termination, to the Company's address contained in the
Agent's records. Such termination shall have no effect on the rights or
responsibilities of the parties hereto with respect to items processed
prior to the effective date of termination.
20. Except as otherwise expressly provided herein, all notices, requests and
demands to or upon the parties hereto shall be given or made only by hand,
Federal Express, Express Mail or other recognized overnight delivery
service or by certified or registered mail, or by telecopier, and shall be
deemed to have been duly given or made: if by hand, immediately upon
delivery; if by Federal Express, Express Mail or overnight delivery
service, one (1) Business Day after dispatch; if mailed by certified or
registered mail, return receipt requested, five (5) days after mailing; and
if by telecopier, upon receipt by the sending party of confirmation of
transmission. All notices, requests and demands sent by telecopier shall be
followed by the original thereof, sent as otherwise provided above, and all
notices, requests and demands are to be given or made to a party at its
address set forth below (or to such other address as such party may
designate by notice in accordance with the provisions of this paragraph).
Agent: Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx
Company: Movie Star, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxxx
NatWest: NatWest Bank N.A.
1133 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
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RNB: Republic National Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
21. The Company agrees to take such further action and to execute and deliver
such further documents and agreements, including any forms, documents or
applications for delivery to the U.S. Postal Service, as the Agent, in its
sole discretion, deems appropriate.
22. Waiver by any party of any provision of this Agreement shall not
constitute a waiver of or prejudice such party's right otherwise to demand
strict compliance with that provision or any other provision hereof.
23. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed wholly within that state. If any provision of this Agreement is
held to be illegal or unenforceable for any reason whatsoever, such
illegality or unenforceability shall not affect the validity of any other
provision hereof.
24. The Company agrees that any action, suit or proceeding in respect of or
arising out of this Agreement may be initiated and prosecuted in the state
or federal courts, as the case may be, located in New York County, New
York. The Company consents to and submits to the exercise of jurisdiction
over its person by any such court having jurisdiction over the subject
matter, waives personal service of any and all process upon it and
consents that all such service of process be made by registered mail
directed to the Company at its address set forth herein or to any other
address as may appear in the Agent's records as the address of the
Company.
IN ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS NOTE,
EACH OF THE COMPANY, RNB, NATWEST AND THE AGENT WAIVES TRIAL BY JURY, AND THE
COMPANY ALSO WAIVES (I) THE RIGHT TO INTERPOSE ANY SET-OFF OR COUNTERCLAIM OF
ANY NATURE OR DESCRIPTION, (II) ANY OBJECTION BASED ON FORUM NON CONVENIENS OR
VENUE, AND (III) ANY CLAIM FOR CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES.
MOVIE STAR, INC.
By: Xxxx X. Xxxxx
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Title: Chairman
REPUBLIC NATIONAL BANK OF NEW YORK
individually and as Agent for
itself and NatWest Bank N.A.
By: Xxxx Xxxxxxx
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Title: Senior Vice President
NATWEST BANK N.A.
By: Xxxxxxx X. Xxxxx
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Title: Vice President
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