AMENDMENT AND TERMINATION AGREEMENT
AGREEMENT dated as of August 28, 1996 among YASHIRO CO., INC., a
Japanese corporation ("Yashiro Inc."), YASHIRO COMPANY, LTD., a Japanese
corporation ("Yashiro Ltd."), XXXXXX XXXXXXXXX ("X. Xxxxxxxxx"), XXXXXXX
XXXXXXXXX ("X. Xxxxxxxxx"), XXXX XXXXX ("Xxxxx"), PACIFIC MILLION ENTERPRISE
LTD. ("Pacific"), CHENG-SEN WANG ("Wang"), XXXXXX X. XXXXX ("Xxxxx"), SIRCO
INTERNATIONAL CORP., a New York corporation ("Sirco"), and BUENO OF CALIFORNIA,
INC., a Delaware corporation ("Bueno").
W I T N E S S E T H:
WHEREAS, Yashiro Ltd., Yashiro Inc., individually and as agent, Xxxxx,
Pacific, Wang and Cheng have entered into a Stock Purchase Agreement dated as of
March 20, 1995 (the "Stock Purchase Agreement") pursuant to which Xxxxx,
Pacific, Wang and Cheng purchased from Yashiro Ltd. and Yashiro Inc. shares of
capital stock of Sirco; and
WHEREAS, concurrently with the execution and delivery of the Stock
Purchase Agreement, Sirco and Bueno entered into an Asset Purchase Agreement
dated March 20, 1995 (the "Asset Purchase Agreement") pursuant to which Sirco
sold the assets of its Handbag Division to Bueno; and
WHEREAS, the parties hereto desire to amend or terminate their
respective obligations under the Stock Purchase Agreement or the Asset Purchase
Agreement and certain other agreements or instruments entered into in connection
therewith or pursuant to the terms thereof;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
hereinafter contained, the parties hereto agree as follows:
1. Prepayments. (a) On the date hereof, Sirco shall pay to Xxxxxx
Xxxxxxxx Frome & Xxxxxxxxxx LLP ("OGF&R"), on behalf of Yashiro Inc., Yashiro
Ltd., X. Xxxxxxxxx and X. Xxxxxxxxx, US$140,000, which amount shall represent
payment in full for all amounts payable by Sirco under the Non-Competition
Agreements referred to in Sections 3(e)-(h) hereof (collectively, the "Yashiro
Non-Competition Agreements").
(b) On the date hereof, Sirco shall pay to OGF&R, on behalf of
X. Xxxxxxxxx, US$51,830 (of which $6,799.25 shall be withheld by Sirco in
accordance with applicable law), which amount shall represent payment in full of
all amounts payable by Sirco under the Severance Agreement referred to in
Section 3(d) hereof.
(c) On the date hereof, Xxxxx shall pay to OGF&R, on behalf of
Yashiro Inc., as agent under the Stock Purchase Agreement, US$390,000, which
amount shall represent payment in full of all amounts payable under the
Promissory Note dated March 20, 1995 from Xxxxx to Yashiro Inc., individually
and as agent. Upon such payment, Yashiro Inc. shall immediately cancel such
promissory note and deliver such canceled promissory note to Xxxxx.
(d) All payments to be made pursuant to this Section 1 shall
be paid in cash to OGF&R by wire transfer of immediately available funds to the
following account:
Account Name: OGF&R/XXXX Account
Account Number: 2592542225
Receiving Bank: Fleet Bank USA
ABA Number: 000000000
2. Amendments. On the date hereof, the respective parties to the
following agreements shall execute and delivery amendments to such agreements as
follows:
(a) the letter agreement dated March 20, 1995 between Yashiro
Inc. and Sirco relating to the provision by Yashiro Inc. to Sirco of unsecured
trade letters of credit shall be amended and restated in its entirety as set
forth in Exhibit A hereto;
(b) the Pledge Agreement dated as of March 20, 1995 among
Xxxxx, Pacific, Wang, Cheng, Bueno and Yashiro Inc., individually and as agent,
shall be amended and restated in its entirety as set forth in Exhibit B hereto;
and
(c) the Guaranty dated March 20, 1995 made by Xxxxx in favor
of Yashiro Inc., Yashiro Ltd., X. Xxxxxxxxx and X. Xxxxxxxxx shall be amended
and restated in its entirety as set forth in Exhibit C hereto.
3. Termination. The continuing covenants and agreements of the
respective parties under the following agreements shall, except as expressly
provided herein, be terminated as of the date hereof, and, except as expressly
provided herein, such agreements shall for all purposes be deemed terminated and
of no further force and effect:
(a) the Stock Purchase Agreement;
(b) the Asset Purchase Agreement; provided, however, that the
provisions of Section 1.3, Section 5.5 (provided, however, that the obligations
under such Section shall terminate when all amounts payable by Sirco under the
amended and restated letter agreement referred to in Section 2(a) hereof have
been paid in full) and Section 5.11 thereof shall survive;
(c) the Exclusive Purchasing Agreement dated March 20, 1995
between Sirco and Yashiro Inc.;
(d) the Severance Agreement dated as of March 20, 1995 between
Sirco and X. Xxxxxxxxx;
(e) the Non-Competition Agreement dated March 20, 1995 between
Yashiro Ltd. and Sirco;
(f) the Non-Competition Agreement dated March 20, 1995 between
Yashiro Inc. and Sirco;
(g) the Non-Competition Agreement dated March 20, 1995 between
X. Xxxxxxxxx and Sirco;
(h) the Non-Competition Agreement dated March 20, 1995 between
X. Xxxxxxxxx and Sirco; and
(i) the Non-Competition Agreement dated March 20, 1995 between
Bueno and Sirco.
4. Surviving Agreements. The following agreements shall remain in full
force and effect following the date hereof, notwithstanding any other provisions
of this Agreement:
(a) the Sublease dated as of March 20, 1995 between Sirco and
Bueno;
(b) the License Agreement dated March 20, 1995 between Sirco
and Bueno; and
(c) the Assumption Agreement dated March 20, 1995 between
Sirco and Bueno.
5. Acknowledgment and Confirmation. Each of Sirco, Yashiro Inc.,
Yashiro Ltd., X. Xxxxxxxxx and X. Xxxxxxxxx (i) acknowledges that Bueno, since
entering into the Yashiro Non-Competition Agreements, has been engaged in the
sale of "Falchi Sport" products and (ii) hereby confirms and agrees that all of
such activity was not in violation of, and did not and shall not constitute a
breach of, any of the Yashiro Non-Competition Agreements.
6. Entire Agreement. This Agreement contains the entire agreement of
the parties regarding the subject matter hereof. It supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the subject matter of this Agreement. Each party to this Agreement
acknowledges that no representations, inducements, promises or agreements, oral
or otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement or
promise with respect to the subject matter hereof not contained in this
Agreement shall be valid or binding.
7. Governing Law. This Agreement shall be governed by the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be signed by their respective duly authorized officers on the date first
stated above.
YASHIRO CO., INC.
By:/s/Xxxxxxx Xxxxxxxxx
--------------------
Xxxxxxx Xxxxxxxxx
Executive Vice President
YASHIRO COMPANY, LTD.
By:/s/Xxxxxxx Xxxxxxxxx
--------------------
Xxxxxxx Xxxxxxxxx
Executive Vice President
/s/Xxxxxx Xxxxxxxxx
--------------------
XXXXXX XXXXXXXXX
/s/Xxxxxxx Xxxxxxxxx
--------------------
XXXXXXX XXXXXXXXX
/s/Xxxx Xxxxx
--------------------
XXXX XXXXX
PACIFIC MILLION ENTERPRISE LTD.
By:/s/Xxxxxxx Xxxxxxxxx
--------------------
Xxxxxxx Xxxxxxxxx
Executive Vice President
/s/Cheng-Sen Wang
--------------------
CHENG-SEN WANG
/s/Xxxxxx X. Xxxxx
--------------------
XXXXXX X. XXXXX
SIRCO INTERNATIONAL CORP.
By:/s/Xxxx Xxxxx
--------------------
Xxxx Xxxxx
Chief Executive Officer
BUENO OF CALIFORNIA, INC.
By:/s/Xxxxxxx Xxxxxxxxx
--------------------
Xxxxxxx Xxxxxxxxx
Chairman of the Board
EXHIBIT A
YASHIRO CO., INC.
0-00-0 Xxxxxxx-Xxxx
Xxxxx-Xx, Xxxxx 000
Xxxxx
August 28, 1996
Sirco International Corp.
00 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxx
Dear Sirs:
This Amended and Restated Letter of Credit Agreement (the "Agreement")
shall serve to memorialize our mutual understanding with respect to the
provision by Yashiro Co., Inc., a Japanese corporation ("Yashiro"), directly or
indirectly to Sirco International Corp., a New York corporation (the
"Corporation"), of unsecured trade letters of credit in accordance with the
terms and provisions set forth herein.
1. The Facility. At the Corporation's request in accordance with
Section 2 hereof, Yashiro shall issue, or cause to be issued, from time to time
from the date hereof through and including March 20, 1997 (the "Term"), on
behalf of the Corporation, one or more letters of credit in an aggregate amount
not to exceed 35% of the book value of all inventory owned by the Corporation
(calculated in accordance with generally accepted accounting principles
("GAAP")) at the time the Corporation requests a letter of credit to be issued
pursuant to this Agreement; provided, however, that, subject to Section 3
hereof, at no time during the Term shall Yashiro be obligated to issue, or cause
to be issued, to or on behalf of the Corporation one or more letters of credit
in an aggregate amount greater than US$1,000,000 (the "Maximum Outstanding
Balance").
2. Issuance of Letters of Credit.
(a) The Corporation may request Yashiro to issue, or cause to
be issued, a letter of credit by delivering to Yashiro, 30 days prior to the
issuance of any letter of credit, at its address set forth above a written
request containing (i) the amount of the letter of credit requested, (ii) a copy
of the related agreement or purchase order to which such letter of credit
request relates, (iii) information regarding the manufacturer party to such
agreement and (iv) such other certificates, documents and other papers and
information as Yashiro may reasonably request. Anything set forth in this
Agreement to the contrary notwithstanding, Yashiro's prior written consent with
respect to the manufacturer party to the agreement to which a letter of credit
request relates (other than manufacturers listed on Schedule A hereto, which is
hereby incorporated by reference, transactions with which do not require the
prior written consent of Yashiro with respect to a borrowing hereunder), which
consent may be withheld by Yashiro in its sole discretion, shall be a condition
precedent to any borrowing hereunder.
(b) Subject to the terms and conditions of this Agreement,
each letter of credit shall, among other things, (i) provide for the payment of
sight drafts when presented for honor thereunder in accordance with the terms
thereof and when accompanied by the documents described therein and (ii) have an
expiration date not earlier than three months after such letter of credit's date
of issuance but in no event later than the last day of the Term. Each letter of
credit shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
and any amendments or revision thereof and, to the extent not inconsistent
therewith, the laws of the State of New York.
3. Repayment. The Corporation shall repay Yashiro with respect to any
letter of credit issued or caused to be issued by Yashiro hereunder on behalf of
the Corporation no later than 100 days after the date of shipment to which such
letter of credit relates (the "Repayment Date"); provided, however, that
notwithstanding anything set forth in this Agreement to the contrary, the
Corporation shall repay Yashiro with respect to any letters of credit issued or
caused to be issued pursuant to this Agreement such that on each of the dates
set forth below, the Maximum Outstanding Balance shall not exceed the amount set
forth opposite each such corresponding date:
Date Maximum Outstanding Balance
---- ---------------------------
1. April 30, 1997 $700,000
2. May 31, 1997 $400,000
3. June 30, 1997 $ 0
4. Fees. In consideration of Yashiro's provision, directly or
indirectly, on behalf of the Corporation, of the letter(s) of credit
contemplated hereby, the Corporation shall pay Yashiro in accordance with
Section 5 hereof, each and every time a letter of credit is issued or caused to
be issued by Yashiro on behalf of the Corporation, the following fees:
(a) A fee equal to 3% of the face amount of such letter of
credit (the "Origination Fee"); and
(b) A fee equal to (i) the product of (x) the aggregate amount
drawn under such letter of credit multiplied by (y) the sum of (A) the base rate
of interest announced publicly by Citibank, N.A. in New York, New York, from
time to time, as its base rate plus (B) 2% multiplied by (z) the number of days
during the period commencing on the date such letter of credit is presented for
payment and ending on the date the amount drawn under such letter of credit is
repaid in full, divided by (ii) 365 (the "Financing Fee").
5. Payments. All Origination Fees or Financing Fees payable to Yashiro
in accordance with this Agreement shall be paid by the Corporation on or prior
to the applicable Repayment Date, in cash by wire transfer of immediately
available funds in accordance with Yashiro's written instructions.
6. Early Termination. This Agreement may be terminated by Yashiro at
any time upon ten days' prior written notice if the Corporation (i) fails to
repay Yashiro for any borrowings under a letter of credit in accordance with the
terms of Section 3 hereof, (ii) fails to pay any Origination Fee or Financing
Fee in accordance with Section 5 hereof or (iii) at any time during the Term,
has accumulated operating losses (calculated in accordance with GAAP) in excess
of $1,500,000, commencing with the fiscal quarter ended August 31, 1995.
7. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings, oral or
written, relative to said subject matter. No amendment or modification hereof
shall be valid or binding unless made in writing and signed by the party against
whom enforcement thereof is sought.
8. Notices. Any notice required, permitted or desired to be given
pursuant to any of the provisions of this Agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or sent by
an internationally recognized express courier, postage and fees prepaid, to the
parties at their addresses set forth above. Either of the parties hereto may at
any time and from time to time change the address to which notice shall be sent
hereunder by notice to the other party given under this Section 8. The date of
the giving of any notice sent by an internationally recognized express courier
shall be the date which is three days after the date of the posting of the
notice.
9. Assignment. This Agreement may not be assigned by Yashiro without
the prior written consent of the Corporation; provided, however, that Yashiro
may assign this Agreement to any affiliate thereof without any consent.
10. Governing Law. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of New York without regard to
the conflicts of laws principles thereof.
11. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original instrument, but both of which when taken
together shall constitute one and the same instrument.
If the foregoing reflects our mutual understanding, kindly execute two
copies of this Agreement in the space provided below and return one copy to the
undersigned.
Very truly yours,
YASHIRO CO., INC.
By:
--------------------
Name:
Title:
Accepted and Agreed to
this 28th day of August, 1996
SIRCO INTERNATIONAL CORP.
By:
-----------------
Name:
Title:
Schedule A
HING-WAH LEATHER PRODUCTS
BEST MOUNT DEVELOPMENT LTD.
CABOT FASHION BAGS
EVER-EXPAND
FINE & FAST CO. LTD.
CONSTELLATION ENTERPRISE CO. LTD.
CONG CHYUAN INDUSTRIAL CO. LTD.
XXX-XXXX INTERNATIONAL COMPANY, LTD.
EXHIBIT B
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of August 28,
1996, made by each of XXXX XXXXX ("Xxxxx"), PACIFIC MILLION ENTERPRISE LTD.
("Pacific Million"), CHENG-SAN WANG ("Cheng-San") and XXXXXX X. XXXXX ("Xxxxx,"
and together with Xxxxx, Pacific Million and Cheng-San, the "Pledgors") in favor
of BUENO OF CALIFORNIA, INC., a Delaware corporation ("Bueno"), and YASHIRO CO.,
INC., a Japanese corporation ("Yashiro Co."), on its own behalf and as Agent for
YASHIRO COMPANY, LTD., a Japanese corporation ("Yashiro Limited," and together
with Yashiro Co., the "Yashiro Entities"). Bueno and Yashiro Co., as Agent, are
together hereinafter referred to as the "Pledgees."
WITNESSETH:
WHEREAS, the Pledgors are parties to that certain Stock
Purchase Agreement, dated as of March 20, 1995, by and among the Yashiro
Entities and the Pledgors and Yashiro Co., as Agent (the "Stock Purchase
Agreement"), pursuant to which the Pledgors purchased from the Yashiro Entities
an aggregate of 681,000 shares of common stock, par value $.10 per share (the
"Common Stock"), of Sirco International Corp., a New York corporation (the
"Corporation"), in partial consideration of which Xxxxx executed and delivered
to Yashiro Co., as Agent for the Yashiro Entities, a promissory note in the
principal amount of $532,250 (the "Note"); and
WHEREAS, Bueno is party to that certain Asset Purchase
Agreement, dated March 20, 1995, by and between Bueno and the Corporation (the
"Asset Purchase Agreement"), pursuant to which Bueno purchased the assets of the
Corporation's Handbag Division; and
WHEREAS, as a condition precedent to (i) the Yashiro Entities
entering into the Stock Purchase Agreement and (ii) Bueno entering into the
Asset Purchase Agreement, the Pledgors made the pledge contemplated by that
certain Pledge Agreement, dated as of March 20, 1995, by and among the Pledgors
and the Pledgees; and
WHEREAS, as a condition precedent to each of the Yashiro
Entities and Bueno entering into that certain Amendment and Termination
Agreement, of even date herewith (the "Amendment and Termination Agreement"),
which provides, among other things, for the repayment of all amounts owed by
Xxxxx under the Note, the Pledgors shall have made the pledge contemplated by
this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises set forth herein and in the Amendment and Termination Agreement,
each of the Pledgors hereby agrees as follows:
SECTION 1. Pledge.
(a) The Pledgors hereby pledge to the Pledgees, and grant to
the Pledgees a first priority security interest in, the following (
collectively, the "Pledged Collateral"):
(i) 681,000 shares of Common Stock (the "Pledged
Shares") (constituting, as of the date hereof, no less than 25% of the
issued and outstanding capital stock of the Corporation (the "Minimum
Amount") and the certificates representing the Pledged Shares, and all
dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(ii) Such additional shares of Common Stock pledged
to the Pledgees pursuant to Section 1(b) hereof (which shares, when so
pledged, shall be deemed to be part of the Pledged Shares) and the
certificates representing such additional shares, and all dividends,
cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any and all of such additional shares; and
(iii) all proceeds of any and all of the Pledged
Collateral (including, without limitation, proceeds that constitute
property of the types described above).
(b) In the event that the Corporation issues any additional
shares of its capital stock, the Pledgors shall, in accordance with Section 3
hereof, immediately pledge to the Pledgees such number of additional shares of
Common Stock that, together with the Pledged Shares, shall equal no less than
the Minimum Amount.
SECTION 2. Security for Obligations. This Agreement secures
the payment of each of the following obligations:
(a) All obligations of the Corporation, now or hereafter
existing, under that certain Amended and Restated Letter of Credit Agreement, of
even date herewith, by and between the Corporation and Yashiro Co. (the "Amended
and Restated L/C Agreement") whether for principal, interest, fees, expenses or
otherwise;
(b) All obligations of the Corporation, now or hereinafter
existing, under (i) that certain Sublease, dated as of March 20, 1995, by and
between the Corporation and Bueno (the "Sublease") and (ii) that certain License
Agreement, dated March 20, 1995, by and between the Corporation and Bueno, to
the extent that Bueno receives a final, non-appealable judgment from a court of
competent jurisdiction in respect of any breach by the Corporation of either the
Sublease or the License Agreement;
(c) All obligations of Xxxxx, now or hereafter existing, under
that certain Amended and Restated Guaranty, of even date herewith, in favor of
Yashiro Co. (the "Amended and Restated Guaranty"); and
(d) All obligations of the Pledgors, now or hereafter
existing, under the Amendment and Termination Agreement or this Agreement.
All obligations set forth in subsections (a) through (d), inclusive, of this
Section 2 shall hereinafter be collectively referred to as the "Obligations."
Each of the (i) Amended and Restated L/C Agreement, (ii) the Sublease, (iii) the
License Agreement, (iv) the Amended and Restated Guaranty, (v) the Amendment and
Termination Agreement and (vi) this Agreement shall hereinafter be collectively
referred to as the "Operative Agreements." Without limiting the generality of
the foregoing, this Agreement secures the payment of all amounts and the
fulfillment of all obligations which constitute part of the Obligations and
would be owed or required to be performed by (i) Xxxxx pursuant to the Amended
and Restated Guaranty or (ii) by the Corporation or the Pledgors, as the case
may be, pursuant to the other Operative Agreements but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any of the Pledgors or the
Corporation; provided, however, that this Agreement shall nevertheless remain
enforceable notwithstanding any such proceeding.
SECTION 3. Delivery or Release of Pledged Collateral.
(a) All certificates or instruments representing or evidencing
the Pledged Collateral shall be delivered to and held by or on behalf of the
Pledgees pursuant hereto and shall be in suitable form for transfer by delivery,
or shall be accompanied by duly executed instruments of transfer or assignment
in blank, all in form and substance satisfactory to the Pledgees. The
certificates representing the Pledged Collateral initially being delivered to
the Pledgees hereunder are listed on Schedule I annexed hereto, which is hereby
incorporated by reference. The Pledgees shall have the right, at any time in
their discretion and without notice to the Pledgors, to transfer to or to
register in the name of the Pledgees or any of their nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in Section
6(a) hereof. In addition, the Pledgees shall have the right at any time to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations.
(b) Upon receipt by the Pledgees of a written request from
each of the Pledgors for release of Pledged Shares (the "Requested Shares"),
together with a written certification by each of the Pledgors to the effect
that, after giving effect to the release of the Requested Shares pursuant to
this Section 3(b), the Pledged Shares shall exceed the Minimum Amount, the
Pledgees shall, within 10 days of receipt of such request and certification,
deliver to the Pledgors at such address as each of the Pledgors shall specify in
The City of New York certificates representing the Requested Shares, together
with any stock powers, proxies or other instruments relating to such Requested
Shares then in the possession of the Pledgees, or any one or more of them, or,
if such Requested Shares have been transferred to or registered in the name of
the Pledgees or any of their nominees pursuant to Section 3(a) hereof,
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance reasonably satisfactory to the Pledgors. Upon receipt of
any Requested Shares pursuant to this Section 3(b), such Requested Shares shall
be free of any lien or security interest created hereby and shall no longer be
subject to the pledge of this Agreement, and the Pledgees shall have no further
rights hereunder with respect to such Requested Shares. Anything set forth in
this Section 3(b) to the contrary notwithstanding, all of the Pledged Shares
other than the Requested Shares shall remain subject to the terms and provisions
of this Agreement.
SECTION 4. Representations and Warranties. Each of the
Pledgors represents and warrants to each of the Pledgees as follows:
(a) The Pledged Shares have been duly authorized and validly
issued and are fully paid and non-assessable.
(b) The Pledgors are the legal and beneficial owner of the
Pledged Collateral free and clear of any lien, security interest, option or
other charge or encumbrance except for the security interest created by this
Agreement.
(c) The pledge of the Pledged Shares pursuant to this
Agreement creates a valid and perfected first priority security interest in the
Pledged Collateral, securing the payment of the Obligations.
(d) No consent of any other person or entity and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge by the
Pledgors of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by the Pledgors, (ii) for
the perfection or maintenance of the security interest created hereby (including
the first priority nature of such security interest) or (iii) for the exercise
by the Pledgees of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with any disposition of any portion of
the Pledged Collateral by laws affecting the offering and sale of securities
generally).
(e) As of the date hereof, (i) the Pledged Shares constitute
no less than 25% of the issued and outstanding shares of Common Stock and (ii)
the Corporation has no shares of preferred stock issued and outstanding.
(f) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
SECTION 5. Further Assurances; Supplements.
(a) Each of the Pledgors agrees that any time and from time to
time, at their own expense, the Pledgors will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Pledgees may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Pledgees to exercise and enforce their rights and
remedies hereunder with respect to any Pledged Collateral.
(b) Each of the Pledgors further agrees that he or it will,
upon the pledging of any additional shares of Common Stock to the Pledgees
pursuant hereto, deliver to the Pledgees a pledge agreement, duly executed by
each of the Pledgors, in substantially the form of Schedule II annexed hereto (a
"Pledge Amendment"), which is hereby incorporated by reference, in respect of
the additional Pledged Shares which are to be pledged pursuant to this
Agreement. Each of the Pledgors hereby authorizes the Pledgees to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Shares set forth
in any Pledge Amendment delivered to the Pledgees shall for all purposes
hereunder be considered Pledged Collateral.
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing;
(i) The Pledgors shall be entitled to exercise or refrain from
exercising any and all voting and other consensual rights pertaining to
the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided, however, that
the Pledgors shall not exercise or refrain from exercising any such
right if, in the Pledgees' sole judgment, such action would have a
material adverse effect on the value of the Pledged Collateral or any
part thereof.
(ii) The Pledgors shall be entitled to receive and retain any and
all dividends paid in respect of the Pledged Collateral; provided,
however, that any and all
(A) dividends paid or payable other than in cash in
respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in
exchange for, Pledged Collateral,
(B) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Pledged Collateral,
shall be, and shall be forthwith delivered to the Pledgees to hold as, Pledged
Collateral and shall, if received by the Pledgors, be received in trust for the
benefit of the Pledgees, be segregated from the other property or funds of the
Pledgors, and be forthwith delivered to the Pledgees as Pledged Collateral in
the same form as so received (with any necessary indorsement or assignment).
(b) Upon the occurrence and during the continuance of an Event
of Default:
(i) All rights of the Pledgors to exercise or refrain from
exercising the voting and other consensual rights which they would
otherwise be entitled to exercise pursuant to Section 6(a)(i) hereof
and to receive the dividends which they would otherwise be authorized
to receive and retain pursuant to Section 6(a)(ii) hereof shall cease,
and all such rights shall thereupon become vested in the Pledgees who
shall thereupon have the sole right to exercise or refrain from
exercising such voting and other consensual rights and to receive and
hold as Pledged Collateral such dividends.
(ii) All dividends which are received by the Pledgors contrary
to the provisions of Section 6(b)(i) hereof shall be received in trust
for the benefit of the Pledgees, shall be segregated from other funds
of the Pledgors and shall be forthwith paid over to the Pledgees as
Pledged collateral in the same form as so received (with any necessary
indorsement).
(c) As used in this Agreement, "Event of Default" shall mean
any of the following:
(i) the failure by the Corporation to pay any
principal of, interest accrued on, or any other payment
required under, the Amended and Restated L/C Agreement when
the same becomes due and payable within ten days after written
notice by the Pledgees of such failure; or
(ii) the failure by the Corporation to fulfill any of its
obligations under the Sublease or the License Agreement within
ten days after written notice by the Pledgees of such failure;
or
(iii) the failure by the Corporation to make any
payment required when the same becomes due and payable, or
fulfill any of its obligations, under the Amendment and
Termination Agreement or this Agreement within ten days after
written notice by the Pledgees of such failure; or
(iv) the failure by Xxxxx to fulfill any of his
obligations under the Amended and Restated Guaranty within ten
days after written notice by the Pledgees of such failure.
(d) Each of the Pledgors shall execute and deliver (or cause
to be executed and delivered) to the Pledgees all such proxies and other
instruments as the Pledgees may reasonably request for the purpose of enabling
the Pledgees to (i) exercise the voting and other rights which they are entitled
to exercise pursuant to Section 6(b)(i) hereof and (ii) to receive the dividends
which they are authorized to receive and retain pursuant to Section 6(a)(ii)
hereof and Section 6(b) hereof.
SECTION 7. Transfers and Other Liens. Each of the Pledgors
agrees that he or it will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, any of
the Pledged Collateral or (ii) create or permit to exist any lien, security
interest, option or other charge or encumbrance upon or with respect to any of
the Pledged Collateral, except for (A) the security interest under this
Agreement and (B) the granting of an option or proxy with respect to, or sale
of, the Pledged Collateral to Xxxxx. Notwithstanding the preceding sentence, any
transfer of the Pledged Collateral to Xxxxx from any other Pledgor pursuant to
an option granted to Xxxxx shall be subject to such documentation as the
Pledgees may reasonably request to assure compliance with applicable securities
laws and to confirm their continuing security interest in the Pledged Collateral
to be so transferred, all in accordance with Section 5 hereof.
SECTION 8. Pledgees Appointed Attorney-in-Fact. Each of the
Pledgors hereby appoints each of Yashiro Co. and Bueno, the Pledgors'
attorney-in-fact, each with full authority in the place and stead of the
Pledgors and in the name of the Pledgors or otherwise, from time to time in
their discretion to take any action and to execute any instrument which the
Pledgees may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of the Pledgors under Section 6 hereof)
including, without limitation, to receive, indorse and collect all instruments
made payable to the Pledgors representing any dividend or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
SECTION 9. Pledgees May Perform. If the Pledgors fail to
perform any agreement contained herein, the Pledgees may themselves perform, or
cause performance of, such agreement, and the expenses of the Pledgees
including, without limitation, the reasonable fees and expenses of their
counsel, incurred in connection therewith shall be payable by the Pledgors under
Section 12 hereof.
SECTION 10. The Pledgees' Duties. The powers conferred on the
Pledgees hereunder are solely to protect their interest in the Pledged
Collateral and shall not impose any duty upon them to exercise any such powers.
Except for the safe custody of any Pledged Collateral in their possession and
the accounting for moneys actually received by them hereunder, the Pledgees
shall have no duty as to any Pledged Collateral, as to (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Pledged Collateral, whether or not the Pledgees
have or are deemed to have knowledge of such matters or (ii) the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Pledged Collateral. The Pledgees shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
Collateral in their possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Pledgees accord their own property.
SECTION 11. Remedies upon Default. If any Event of Default
shall have occurred and be continuing:
(a) The Pledgees may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to them, all the rights and remedies of a
secured party on default under the Uniform Commercial Code in effect in
the State of New York at the time (the "Code") (whether or not the Code
applies to the Pledged Collateral), and may also, in their sole
discretion, without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the
Pledgees' offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Pledgees may deem
commercially reasonable, irrespective of the impact of any such sales
on the market price of the Pledged Collateral. The Pledgors agree that,
to the extent notice of sale shall be required by law, at least ten
days' notice to the Pledgors of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Pledgees shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having been
given. The Pledgees may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned. Each of the Pledgors hereby waives any
claims against the Pledgees arising by reason of the fact that the
price at which any Pledged Collateral may have been sold at such a
private sale was less than the price which might have been obtained at
a public sale, even if the Pledgees accept the first offer received and
do not offer such Pledged Collateral to more than one offeree.
(b) Any cash held by the Pledgees as Pledged Collateral and
all cash proceeds received by the Pledgees in respect of any sale of,
collection from, or other realization upon, all or any part of the
Pledged Collateral may, in the discretion of the Pledgees, be held
thereby as collateral for, and/or then or at any time thereafter be
applied (after payment of any amounts payable to the Pledgees for any
reasonable expenses incurred thereby pursuant to Section 12) in whole
or in part by the Pledgees against, all or any part of the Obligations
in such order as the Pledgees shall elect. Any surplus of such cash or
cash proceeds held by the Pledgees and remaining after payment in full
of all the Obligations shall be paid over to the Pledgors or to
whomsoever may be lawfully entitled to receive such surplus.
SECTION 12. Expenses. The Pledgors shall upon demand pay to
the Pledgees the amount of any and all reasonable expenses including, without
limitation, the reasonable fees and expenses of their counsel and of any experts
and agents, which the Pledgees may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the
Pledgees hereunder or (iv) the failure by the Pledgors to perform or observe any
of the provisions hereof.
SECTION 13. Security Interest Absolute. The obligations of the
Pledgors under this Agreement are independent of the Obligations and a separate
action or actions may be brought and prosecuted against the Pledgors to enforce
this Agreement. All rights of the Pledgees and security interests hereunder, and
all obligations of the Pledgors hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any of the
Operative Agreements or any other agreement or instrument relating
thereto; or
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of the
Operative Agreements including, without limitation, any increase in the
Obligations resulting from the extension of additional credit to the
Corporation under the Amended and Restated L/C Agreement or otherwise;
or
(c) any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of or
consent to departure from any guaranty (including, without limitation,
the Amended and Restated Guaranty), for all or any of the Obligations;
or
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the Obligations
or any other assets of the Corporation or any of its subsidiaries; or
(e) any change, restructuring or termination of the corporate
structure or existence of the Corporation or any of its subsidiaries;
or
(f) any assignment for the benefit of creditors or filing by
the Corporation or any of the Pledgors of a voluntary petition under
the U.S. Bankruptcy Code, as amended, or any other federal or state
insolvency law; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Pledgors.
SECTION 14. No Waiver. No failure on the part of the Pledgees
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 Pledgees of any right,
power or remedy hereunder preclude any other further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein provided are
to the fullest extent permitted by law cumulative and are not exclusive of any
remedies provided by law.
SECTION 15. Amendments. No amendment of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
each of the Pledgees.
SECTION 16. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including telecopier
communication) and mailed, telecopied or delivered to them, if to the Pledgors,
c/x Xxxxx at the Corporation's address at 00 Xxxxxxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, with a copy to Pryor, Cashman, Xxxxxxx & Xxxxx, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq. and if to the
Pledgees, c/o Yashiro Co. at its address at 0-00-0 Xxxxxxx-Xxxx, Xxxxx-Xx, Xxxxx
000, Xxxxx, Attention: Xxxxxxx Xxxxxxxxx, with a copy to Xxxxxx Xxxxxxxx Frome &
Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxxxxxxx, Esq. or, as to any party, at such other address as shall be designated
by such party in a written notice to the other party complying as to delivery
with the terms of this Section 16. All such notices and other communications
shall, when mailed or telecopied, be effective when deposited in the mails or
telecopied, respectively.
SECTION 17. Continuing Security Interest; Assignments under
any Operative Agreement. This Agreement shall create a continuing security
interest in the Pledged Collateral and shall (i) remain in full force and effect
until the payment in full of all obligations of the Corporation, now or
hereafter existing, under (A) the Amended and Restated L/C Agreement, whether
for principal, interest, fees, expenses or otherwise (such date of payment
hereinafter referred to as the "L/C Termination Date") and (B) all other amounts
payable as of the L/C Termination Date under this Agreement, (ii) be binding
upon each of the Pledgors, their successors and assigns and (iii) inure to the
benefit of, and be enforceable by, each of the Pledgees and their successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), the Pledgees may assign or otherwise transfer all or any portion of their
rights and obligations under any Operative Agreement to any other person or
entity, and such other person or entity shall thereupon become vested with all
the benefits in respect thereof granted to the Pledgees herein or otherwise.
Upon the later of the payment in full or the complete performance of all
obligations of the Corporation, now or hereafter existing, under (A) the Amended
and Restated L/C Agreement, whether for principal, interest, fees, expenses or
otherwise and (B) all other amounts payable as of the L/C Termination Date under
this Agreement, the security interest granted hereby shall terminate and all
rights to the Pledged Collateral shall revert to the Pledgors. Upon any such
termination, the Pledgees will, at the Pledgors' expense, return to the Pledgors
such of the Pledged Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof and execute and deliver to the Pledgors such
documents as the Pledgors shall reasonably request to evidence such termination.
SECTION 18. Governing Law; Terms. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, except as required by mandatory provisions of law and except to the extent
that the validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of any particular Pledged Collateral are governed by the
laws of a jurisdiction other than the State of New York. Unless otherwise
defined herein, terms defined in Article 9 of the Code are used herein as
therein defined.
IN WITNESS WHEREOF, the Pledgors have executed and delivered
this Agreement as of the date first above written.
PLEDGORS:
------------------------------
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PACIFIC MILLION ENTERPRISE LTD.
By: ------------------------------
Name: Xxx Xxxxxx
Title:
------------------------------
CHENG-SEN WANG
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XXXXXX X. XXXXX
SCHEDULE I
Attached to and forming a part of that certain
Amended and Restated Pledge
Agreement, dated August 28, 1996, by and among
Xxxxx and other pledgors, as Pledgors,
to Bueno and Yashiro Co., as Agent, as Pledgees.
Stock Certificate No(s). Number of Shares Name of Stockholder
------------------------ ---------------- -------------------
NB 5878 133,333 Pacific Million
Enterprise Ltd.
NB 5877 414,334 Xxxx Xxxxx
NB 5879 88,889 Cheng-Sen Xxxx
XX 5880 44,444 Xxxxxx X. Xxxxx
SCHEDULE II
This Pledge Amendment No. [ ], dated [ ] 19[ ], (the "Pledge
Amendment") is delivered pursuant to Section 5 of that certain Amended and
Restated Pledge Agreement (as hereinafter defined). Each of the undersigned
hereby agrees that this Pledge Amendment may be attached to the Amended and
Restated Pledge Agreement, dated August 28, 1996, by and among the undersigned
and the Pledgees (the "Amended and Restated Pledge Agreement;" capitalized terms
defined therein being used herein as therein defined) and that the Pledged
Shares listed on this Pledge Amendment shall be deemed to be part of the Pledged
Shares and shall become part of the Pledged Collateral and shall secure all
Obligations.
Stock Certificate No(s). Number of Shares Name of Shareholder
------------------------ ---------------- -------------------
PLEDGORS:
------------------------------
XXXX XXXXX
PACIFIC MILLION ENTERPRISE LTD.
By: ------------------------------
Name: Xxx Xxxxxx
Title:
------------------------------
CHENG-SEN WANG
------------------------------
XXXXXX X. XXXXX
EXHIBIT C
AMENDED AND RESTATED GUARANTY
In consideration of and to induce Yashiro Co., Inc., a
Japanese corporation ("Yashiro"), to enter into that certain Amended and
Restated Letter of Credit Agreement (the "Amended and Restated L/C Agreement"),
of even date herewith, by and between Yashiro and Sirco International Corp., a
New York corporation (the "Corporation"), and for other good and valuable
consideration, the undersigned irrevocably and unconditionally guarantees to
Yashiro, payment when due, whether by acceleration or otherwise, of any and all
Liabilities (as hereinafter defined) to Yashiro, together with all interest
thereon, if applicable, and all reasonable attorneys' fees, costs and expenses
of collection incurred by Yashiro in enforcing any of such Liabilities and/or
this guaranty. This guaranty shall supersede and replace that certain Guaranty,
dated March 20, 1995, made by the undersigned in favor of Yashiro, Yashiro
Company, Ltd., Xxxxxx Xxxxxxxxx and Xxxxxxx Xxxxxxxxx which, following the
execution and delivery by the undersigned of this guaranty, shall be of no
further force and effect.
The term "Liabilities" shall mean all of the obligations of
the Corporation, now or hereafter existing, under the Amended and Restated L/C
Agreement, whether for principal, interest, fees, expenses or otherwise.
This is an absolute, unconditional, present and continuing
guaranty of performance and payment, and not of collection, and all Liabilities
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. Yashiro shall not be required
to exhaust its remedies against the Corporation prior to the exercise of its
rights and remedies against the undersigned.
Yashiro may at any time and from time to time without the
consent of, or notice to, the undersigned, without incurring responsibility to
the undersigned, without impairing or releasing the obligations of the
undersigned hereunder, upon or without any terms or conditions and in whole or
in part:
(i) change the manner, place or terms of payments, and/or
change or extend the time of payment of, renew or alter any Liabilities or any
liability incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Liabilities as so changed, extended, renewed or
altered;
(ii) accept any checks, notes or other obligations secured or
unsecured in any amount, purportedly in payment of the whole or any part of the
Liabilities;
(iii) exercise or refrain from exercising any rights against
the Corporation or others (including, without limitation, the undersigned) or
otherwise act or refrain from acting upon any default of the Corporation; or
(iv) settle or compromise any Liability hereby guaranteed or
any other liability (including, without limitation, any of those hereunder)
incurred directly or indirectly in respect thereof or hereof.
In the event that any of such Liabilities (including, without
limitation, any installment payments) are payable and default occurs with
respect to the payment thereof, or in the event of a breach of a covenant in any
agreement governing such Liability which is not cured during any applicable
grace period, then, at the option of Yashiro, the specific Liability, including
the full unpaid balance due thereof, whether or not then due, shall be
immediately due and payable to Yashiro on demand.
In the event of any proceeding between the parties in respect
of any matter arising under this guaranty, the undersigned hereby consents that
Yashiro's records, and entries thereon, shall be admissible into evidence as
proof of sale, delivery, acceptance, price and of all other transactions shown
thereon, and of the amount of the liability of the undersigned.
The undersigned hereby waives notice of acceptance of this
guaranty and notice of any Liability to which it may apply, including, without
limitation, the making of sales, the rendition of services and the extension of
credit by Yashiro to the Corporation, and further waives presentment, demand for
payment, protest, notice of dishonor or nonpayment of any Liabilities, suit or
taking of other action by Yashiro, and any other notice to any party liable
thereon (including the undersigned).
Upon the happening of any of the following events: the
insolvency or suspension of business of the Corporation, or the making by the
Corporation or the undersigned of an assignment for the benefit of creditors, or
a trustee or receiver being appointed for the Corporation or the undersigned or
for any property of either of them, or any proceeding being commenced against
the Corporation or the undersigned under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt, receivership, liquidation
or dissolution law or statute which shall not be dismissed within sixty days
after its commencement, then, and in any such event and at any time thereafter,
Yashiro may, without notice to the Corporation or the undersigned, make all the
Liabilities to Yashiro, whether or not then due, immediately due and payable
hereunder as to the undersigned, and Yashiro shall be entitled to enforce the
obligations of the undersigned hereunder.
No invalidity, irregularity or unenforceability of all or any
part of the Liabilities hereby guaranteed or of any security therefor shall
affect, impair or be a defense to this guaranty, this guaranty being a primary
obligation of the undersigned; provided, however, that notwithstanding anything
set forth herein to the contrary, the undersigned may assert as a defense to
this guaranty, any good faith defense that is applicable under any agreement
governing the Liability under which gives rise to Yashiro's enforcement of this
guaranty. Should any one or more provisions of this guaranty be judicially
determined to be unenforceable, all other provisions shall not be affected and
shall remain in full force and effect.
No delay on the part of Yashiro in exercising any of its
options, powers or rights, or partial or single exercise thereof, shall
constitute a waiver thereof. No waiver of any of its rights hereunder, and no
modification or amendment of this guaranty, shall be deemed to be made by
Yashiro unless the same shall be in writing, duly signed on behalf of Yashiro,
and each such waiver, if any, shall apply only with respect to the specific
instance involved, and shall in no way impair the rights of Yashiro or the
Liabilities to Yashiro in any other respect at any other time.
The rights of Yashiro are cumulative and shall not be
exhausted by Yashiro's exercise of any of its rights hereunder or otherwise
against the undersigned or by any number of successive actions until and unless
all indebtedness hereby guaranteed has been paid and each of the obligations of
the undersigned hereunder has been fully satisfied.
This guaranty and the rights and obligations of Yashiro and of
the Corporation shall be governed and construed in accordance with the laws of
the State of New York, except that body of law relating to the choice of laws.
This guaranty is binding upon the undersigned, his executors, administrator,
successors and assigns, and shall inure to the benefit of Yashiro, its
successors and assigns.
Dated: August 28, 1996
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