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TRADE FINANCING AGREEMENT
SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT
[SECURITY AGREEMENT]
Congress Financial Corporation
1133 Avenue of the Americas
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Gentlemen:
This Trade Financing Agreement ("Supplement") is a supplement to the
Accounts Financing Agreement [Security Agreement] between us dated of even
date herewith (the "Agreement"). This Supplement is (a) hereby incorporated
into the Agreement, (b) made a part thereof and (c) subject to the other
terms, conditions, covenants and warranties thereof. All terms, including
capitalized terms, used herein shall have the meanings ascribed to them
respectively in the Agreement, unless otherwise defined in this Supplement.
This Supplement will confirm the terms and conditions upon which you
may, from time to time in your sole discretion, assist us in establishing or
opening foreign or domestic letters of credit and extend other financial
accommodations for our account. Accordingly, each of us hereby agrees as
follows:
SECTION 1. CREDIT ACCOMMODATIONS
1.1. You may, in your sole discretion, from time to time, for our
account, at our request, provide one or more of the following financial
accommodations to us or our designee(s): (a) issue, open, or cause the
issuance or opening of letters of credit or purchase or other guaranties for
the purchase of goods and services in the ordinary course of our or any such
designee's business or for any other purpose approved by you, (b) assist us
in establishing or opening letters of credit for such purposes by
indemnifying the issuer thereof or guaranteeing our payment or performance to
such issuer in connection therewith, (c) make payments for our or such
designee's account in connection with such purchases. All such letters of
credit or purchase or other guaranties and other financial accommodations are
referred to herein individually as a "Credit" and collectively as "Credits".
*and continuing **and
1.2. The opening or issuance of any Credit shall at all times and in
all respects be in your sole discretion. The amount and extent of any Credit
and the terms, conditions and provisions thereof shall in all respects be
determined solely by you and shall be subject to change, modification and
revision by you, in your sole discretion, at any time and from time to time.
The maturity of each Credit shall not exceed one hundred and eighty (180)
days after opening or issuance, except in your sole discretion.
1.3. Our loan availability under the Agreement and any other
Supplements thereto shall be reduced fifty (50%) percent of the amount of all
outstanding letters of credit for the importation of goods issued or caused
to be issued by you or as which you indemnify the issuer thereof and one
hundred (100%) percent of the amount of all other Credits or such lesser
amount as you may elect in your discretion.
1.4. All outstanding Credits shall be secured by all collateral in
which you are now or hereafter granted a security interest by us or any
guarantor of our Obligations. All outstanding Credits shall be deemed loans
for purposes of determining whether the Maximum Credit has been exceeded.
1.5. Except in your sole discretion, the amount of all Credits and all
other commitments and obligations made or incurred by you for our account in
connection therewith shall not exceed a 1,500,000 in the aggregate at any
time outstanding.
1.6. All indebtedness, liabilities, expenses and obligations of any
kind paid, arising or incurred by you in connection with this Supplement, any
Credit or any documents, drafts and acceptances thereunder, whether present
or future, whether arising or incurred before or after termination or
nonrenewal of this Agreement shall be incurred solely as an accommodation to
us and for our account and constitute part of the Obligations, including
without limitations; (a) all amounts due or which may become due under any
Credit or any drafts or acceptances thereunder; (b) all amounts charged or
chargeable to you or us by any bank or other issuer of any Credit or any
correspondent which opens, issues or is otherwise involved with any Credit,
including without limitation, all fees, expenses and commissions; (c) your
fees, expenses and commissions; (d) duties, freight, taxes, costs, insurance
and all such other charges and expenses which may pertain directly or
indirectly to any Obligations or to the Credits or goods or documents
relating thereto; and (e) all other indebtedness and obligations owed by us
to you pursuant to, in connection with or arising from this Supplement, the
Credits or any drafts or acceptances relating thereto.
1.7. All such Obligations shall accrue interest at the rate provided
for in the Agreement, commencing on the date any payment is made, or
non-contingent obligation incurred, by you and all such Obligations shall,
together with interest thereon and other sums owed by us to youhereunder, be
payable and evidenced as provided in the Agreement.
1.8. In addition to all other fees, charges and expenses payable under
the Agreement, this Supplement, and to any bank or other issuer or
correspondent in connection with any Credit, we agree to pay to you the
following commissions for your services hereunder, which shall be due and
payable on the opening or issuance of each Credit or, if the original term is
extended, on the extension thereof: a charge of .2083% of such face amount
for each thirty (30) days, or any portion thereof of the original term or any
extension thereof. We also agree to pay you, your and any bank's, other
issuer's or correspondent's customary charges for amendments, extensions and
administration relating to any Credit, which charges shall be due and payable
on the first day of the month following the date of incurrence and, at your
option may be charged to any of our account(s) maintained by you.
1.9. Nothing contained hereon shall be deemed or construed to grant us
any right, power or authority to pledge your credit in any manner. You shall
have no liability of any kind with respect to any Credit opened or issued by
a bank or other issuer or any draft or acceptance with respect thereto unless
and until you shall have first duly executed and delivered your guarantee or
indemnification in writing with respect thereto, as provided herein.
SECTION 2. ADDITIONAL SECURITY INTEREST
2.1. As additional security for the prompt performance, observance and
payment in full of all Obligations, we hereby grant to you a continuing
security interest in, a lien upon, and a right to set off against, and we
hereby assign, transfer, pledge and set over to you all following property
acquired by us in connection with any Credit or otherwise owned by us,
whether now owned or hereafter acquired (which, is and shall be deemed a part
of the Collateral as defined and used in the Agreement): (a) all raw
materials, work-in-process, finished goods and all other inventory and goods
of whatsoever kind or nature, wherever located, including inventory or goods
in transit ("Inventory"), including without limiations, all wrapping,
packaging, advertising and shopping materials, and all other goods consumed
in our business, all labels and other devices, names ormarks affixed or to be
affixed thereto for purposes of selling or of identifying the same or the
seller or manufacturer thereof and all of our right, title and interest
therein and thereto; (b) documents of payments, transport and title or the
equivalent thereof, including with-
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* inventory imported by us and all of the
out limitation, original contracts, orders, invoices, checks, drafts, notes,
letters of credit, documents, warehouse receipts, bills of lading, shipping
receipts, dock receipts, delivery tickets and documents made available to us
for the purpose of ultimate sale or exchange of Inventory or for the purpose
of loading, unloading, storing, shipping, transhipping, manufacturing,
processing or otherwise dealing with Inventory in a manner preliminary to
their sale or exchange; (c) all books, records, other property and general
intangibles relating to the foregoing; and (d) all products and proceeds of
the foregoing in any form, including without limitation, insurance proceeds
and any claims against third parties for loss or damage to or destruction of
any or all of the foregoing.
2.2. We hereby recognize and admit that until all of the Obligations
have been fully and indefeasibly paid and discharged, you may be deemed to
have absolute ownership in and unqualified right to the possession and
disposal of the following: (a) all property shipped under or pursuant to or
in connection with any Credit or in any way related thereto and, including,
but not limited to, the documents, drafts or acceptances drawn thereunder,
whether or not released to us, (b) in and to all shipping documents,
warehouse receipts, policies, or certificates of insurance and other
documents accompanying or relative to documents, drafts or acceptances drawn
under or relating to any Credit, and (c) all proceeds of each of the
foregoing.
2.3. You may, on or after occurrence of any Event of Default, exercise
any or all of your rights of ownership, including the rights of possession
and sale or other disposition, with or without notice to us, without
liability to you and entirely at our expense and without relieving us from
any Obligations.
SECTION 3. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
We hereby represent, warrant and covenant to you the following (which
shall survive the execution and delivery of this Supplement), the truth and
accuracy of which, or compliance with, being a continuing condition of the
making of loans by you under the Agreement or any supplement thereto and the
extension by you of each Credit and other financial accommodations pursuant
hereto:
3.1. All sales of any Inventory shall be made by us only in the
ordinary course of business and the Accounts arising from such sales and
proceeds thereof shall be and are hereby transferred and assigned to you and
we confirm that your lien and security interest extends and attaches to those
Accounts and proceeds.
3.2. Except as you may otherwise specifically consent in writing prior
to the opening or issuance of any Credit, all Credits shall be opened or
issued to cover the actual purchase and delivery of Inventory solely for our
account.
3.3. All shipments made under any Credit are in accordance with the
governmental laws and regulations of the countries in which the shipments
originate and terminate, and are not prohibited by any such laws and
regulations.
3.4. We assume all risk, liability and responsibility for, and agree to
pay and discharge, all present and future local, state, federal or foreign
taxes, duties, or levies. Any embargo, restriction, laws, customs or
regulations of any country, state, city, or other political subdivision,
where the Collateral is or may be located, or wherein payments are to be
made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall be
solely our risk, liability and responsibility.
3.5. All documents, instruments, notices and statements relating to any
Credit and/or the Collateral, if any, shall at your request, be promptly
delivered to you.
3.6. We shall procure promptly, or cause to be procured, any necessary
licenses for the shipping of goods and comply or cause any drawer under, or
beneficiary of, any Credit (or any transferee or assignee thereof), to comply
with all foreign and domestic governmental laws and regulations in regard to
the shipping of the Inventory, the financing thereof or payment therefor,
including governmental laws and regulations pertaining to transactions
involving designated foreign countries or their nationals and to furnish such
certificates in that respect as you or any bank or other issuer or
correspondent may at any time require.
3.7. The only locations of any Collateral are those addresses listed on
Exhibit A annexed hereto and made a part hereof. Exhibit A sets forth the
owner and/or operator of the premises at such addresses, for all locations
which we do not own and operate and all mortgages, if any, with respect to
the premises. We shall not remove any Collateral from such locations, without
your prior written consent, except for sales of Inventory in the ordinary
course of our business.
3.8. We shall at all times maintain, with financially sound and
reputable insurers, casualty and hazard insurance with respect to the
Collateral for not less than its full market value and against all risks to
which it may be exposed. All such insurance policies shall be in such form,
substance, amounts and coverage as may be reasonably satisfactory to you and
shall provide for thirty (30) days' minimum prior cancellation notice in
writing to you. You may act as attorney for us in obtaining, adjusting,
settling, amending and cancelling such insurance. We shall promptly (a)
obtain endorsements to all existing and future insurance policies with
respect to the Collateral specifying that the proceeds of such insurance
shall be payable to you as your interests may appear and further specifying
that you shall be paid regardless of any act, omission or breach of warranty
by us, (b) deliver to you an original executed copy of, or executed
certificate of the insurance carrier with respect to, such endorsement and,
at your request, the original or a certified duplicate copy of the underlying
insurance policy and (c) deliver to you such other evidence which is
satisfactory to you of compliance with the provisions hereof.
3.9. We shall promptly notify you in writing of the details of any
loss, damage, investigation, action, suit, proceeding or claim relating to
the Collateral or which would result in any material adverse change in our
business, assets, goodwill or condition, financial or otherwise.
3.10. At your option, you may apply any insurance monies received at any
time to the cost of repairs to or replacement for the Inventory and/or to
payment of any of the Obligations, whether or not due, in any order and in
such manner as you, in your sole discretion, may determine.
3.11. Upon your request, at any time and from time to time, we shall, at
our sole cost and expense, execute and deliver to you written reports or
appraisals as to the Inventory listing all locations, items and categories
thereof, describing the condition of same and setting forth the lower of cost
or fair market value thereof, in such form as is reasonably satisfactory to you.
3.12. We shall (a) use, store and maintain the Inventory with all
reasonable care and caution and (b) use the Inventory for lawful purposes
only and in conformity with applicable laws, ordinances, regulations and
insurance policies.
3.13. We assume all responsibility and liability arising from or
relating to the use, sale or other disposition of the Inventory and other
Collateral.
SECTION 4. INDEMNIFICATION AND RELEASE.
4.1. We shall and do hereby indemnify you and hold you harmless from
and against, and agree to pay you on demand the amount of, any and all
losses, costs, claims,demands, causes of action, liabilities or expenses
(collectively, "Liabilities") which you may suffer or incur arising from or
in connection with any transactions or occurrences relating to any Credit,
the Collateral and any documents, drafts or acceptances thereunder or
relating thereto, including, but not limited to, Liabilities due to any
action taken by any bank or other issuer or correspondent with respect to any
Credit except for any such Liabilities arising from your own willful
misconduct. We further agree to and do hereby release and hold you harmless
for any acts, waivers, errors, delays or omissions, whether caused by you, by
any bank or other issuer or correspondent or otherwise with respect to or
relating to any Credit except for any such acts, waivers, errors, delays or
omissions arising from your own willful misconduct. Our unconditional
obligation to you hereunder shall not be modified or diminished for any reason
or in any manner whatsoever. Any fees, commissions or other charges made to
you with respect to any Credit or other Obligations by any bank or other
issuer or correspondent thereof shall be conclusive and may be charged by you
to any of our account(s) maintained by you.
all risk, loss, liabilities, charges and expenses with respect to their acts
or omissions.
*, absent your own willful misconduct,
4.3. If any Credit provides that payment is to be made by any bank,
other issuer or correspondent, you shall not be responsible for the failure
of any of the documents specified in any Credit to come into your possession
or for any delay in connection therewith, and our obligation to make
reimbursement shall not be affected by such failure or delay in the receipt
by you of any such documents, absent your willful misconduct.
4.4. We agree that any action taken by you, or any action taken by any
bank or other issuer or correspondent under or in connection with any Credit,
the Collateral and any documents, drafts or acceptances thereunder, shall,
notwithstanding any judgment or instructions we may or may not express to the
contrary or inconsistent therewith, be conclusive and binding on us and shall
not create any resulting liability to you, except for your own willful
misconduct or gross negligence. In furtherance thereof, you shall have the
full and sole right and authority to, in good faith,: (a) clear and resolve
any questions of non-compliance of documents; (b) give any instructions as to
acceptance or rejection of any documents or goods; (c) execute any and all
applications for steamship or airway guaranties, indemnities or delivery
orders; (d) grant any extensions of the maturity of, time of payment for, or
time of presentation of, any drafts, acceptances, or documents; and (e) agree
to any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the applications,
Credits, or documents, drafts or acceptances thereunder or any letters of
credit included in the Collateral; all in your sole name, and any bank or
other issuer or correspondent shall be entitled to comply with and honor any
and all such documents or instruments executed by or received solely from
you, all without any notice to or any consent from us.
4.5. Without your express consent and endorsement in writing, we agree
not to: (a) approve or resolve any questions of non-compliance of documents;
(b) give any instructions as to acceptance or rejection of any documents or
goods; (c) execute any and all applications for steamship or airway
guaranties, indemnities or delivery orders; (d) grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances or documents; or (e) agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Credits, or documents, drafts or
acceptances thereunder.
4.6. Any rights, remedies, duties or obligations granted or undertaken
by us to any bank or other issuer or correspondent in any application for any
Credit, or any outstanding agreement relating to the opening or issuance of
any Credit or acceptances or otherwise, shall be deemed to have been granted to
you and apply in all respects to you and shall be in addition to any rights,
remedies, duties or obligations contained herein.
4.7. Any duties or obligations undertaken by you to any bank or other
issuer or correspondent in any application for or in connection with any
Credit, including any outstanding agreement relating to the opening or
issuance of any Credit or otherwise, shall be deemed to have been undertaken
by us and apply in all respects to us and shall be in addition to the duties
or obligations contained herein.
SECTION 5. ADDITIONAL REMEDIES
Upon the occurence of any Event of Default and at any time thereafter,
you shall have the right (in addition to any other rights you may have under
the Agreement, this Supplement or otherwise), without notice to us, at any
time and from time to time, in your discretion, with or without judicial
process or the aid or assistance of others and without cost to you:
5.1. To enter upon any premises on or in which any of the Inventory may
be located and, without resistance or interference by us, take possession
of the Inventory;
5.2. To complete processing, manufacturing, repair and shipment to
customers of all or any portion of the Inventory;
5.3. To sell, foreclose or otherwise dispose of any part or all of the
Inventory on or in any of our premises or premises of any other party;
5.4. To require us, at our expense, to assemble and make available to
you any part or all of the Inventory at any place and time reasonably
designated by you;
5.5. To remove any or all of the Inventory from any premises on or in
which the same may be located, for the purpose of effecting the sale,
foreclosure or other disposition thereof or for any other purpose (and if any
of the Inventory consists of motor vehicles, you may use our registrations
and license plates).
IN WITNESS WHEREOF, we have caused these presents to be duly executed
this 16th day of June, 1992.
By: I.C. ▇▇▇▇▇▇ & COMPANY L.P.
By: ISBUYCO, INC., General Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:---------------------------------
Chairman
Title:------------------------------
EXHIBIT A TO
TRADE FINANCING AGREEMENT SUPPLEMENT
LOCATIONS OF COLLATERAL
1. I.C. ▇▇▇▇▇▇ & Company, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Sussex Co.
▇▇▇▇▇▇▇▇ & ▇.▇. ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. Lord ▇▇▇▇▇▇ Factory Outlet
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4. Newton Co.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. Carthage Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6. Raleigh Co.
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
8. Empire ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
9. Atlanta Apparel Mart
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10. Bayside Mdse. Mart
▇▇▇-▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
11. California Mart
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12. Miami International Mdse. Mart
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
13. Dallas Market Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
