TO: THE CHASE MANHATTAN BANK
DELIVERY AGREEMENT
WHEREAS SLM INTERNATIONAL, INC., #1 APPAREL, INC. and MASKA U.S., INC.
(hereinafter called the "Borrowers") have agreed jointly and severally to
execute and deliver to THE CHASE MANHATTAN BANK for its own benefit and for the
pro rata benefit of the Lenders (as defined in the Credit Agreement referred to
hereafter) (hereinafter called the "Secured Party") a credit agreement dated as
of April 1, 1997 with the Secured Party (which as amended, supplemented or
restated from time to time is herein called, the "Credit Agreement") and SLM
TRADEMARK ACQUISITION CORP. (the "Guarantor" and, collectively with the
Borrowers, the "Companies") has agreed to execute and deliver to the Secured
Party a guarantee (which as amended, supplemented or restated from time to time
is herein called the "Guarantee") dated as of April 1, 1997 and, as security for
the indebtedness and liability under the Credit Agreement and the Guarantee, the
Companies have agreed to execute and deliver to the Secured Party a debenture in
the principal amount of XXX XXXXXXX XXXXXXX XXXXXX XXXXXX DOLLARS ($100,000,000
U.S.) for the purpose of securing payment or performance of any and all
indebtedness, obligations and liabilities, joint or several, of the Companies to
the Secured Party pursuant to the Credit Agreement and the Guarantee and any
security therefor, whether as principal or surety (all of which present and
future indebtedness, obligations and liabilities are hereinafter collectively
called the "Obligations");
NOW THEREFORE in consideration of the foregoing and for other good and
valuable consideration the Companies hereby agree with the Secured Party as
follows:
1. Delivery. The Companies herewith deliver to the Secured Party a debenture of
the Companies in the principal amount of XXX XXXXXXX
0.
XXXXXXX XXXXXX XXXXXX DOLLARS ($100,000,000 U.S.) bearing interest at the rate
of TWENTY-FIVE PERCENT (25%) per annum from the date hereof (hereinafter as it
may be amended, supplemented or restated from time to time called the
"Debenture"), charging by way of a fixed and specific mortgage and charge and
granting security interests in certain property and assets of the Companies and
charging by way of a floating charge and granting a security interest in all the
undertaking, property and assets of the Companies (except as therein provided).
2. Continuing Security. The Debenture shall be held by the Secured Party as
general and continuing security to secure payment and performance of the whole
of the Obligations as existing from time to time and any ultimate unpaid balance
of any indebtedness forming part of the Obligations notwithstanding any change
in:
(a) the nature or form of the Obligations;
(b) the accounts or the bills of exchange, promissory notes and/or other
obligations evidencing or creating the Obligations or any part
thereof;
(c) the names of the parties to the accounts or to the said bills, notes
and/or obligations; or
(d) the name or constitution of any of the Companies,
and notwithstanding the opening of any new account and the closing in the books
of the Companies or the Secured Party of any other account with respect to the
Obligations or any part thereof.
3. Default. Upon the occurrence of an Event of Default (as defined under the
Credit Agreement or the Guarantee), the Secured Party may forthwith without
notice, without demand for payment, without advertisement and without any other
formality (all of which are hereby waived), but in accordance with applicable
law, enforce any and all security which it may hold including, without
limitation, the Debenture. All rights and remedies of the Secured Party may be
exercised independently or in combination. The rights and remedies specified
herein shall be in addition to and not in substitution for any other rights and
remedies of the Secured Party at law or in equity or otherwise.
3.
4. Application of Payments. Unless the provisions of the Credit Agreement
otherwise provide, any and all payments made in respect of the Obligations may
be applied on such part or parts of the Obligations as the Secured Party may see
fit. Unless the provisions of the Credit Agreement otherwise provide, the
Secured Party shall at all times and from time to time have the right to change
any appropriation of any moneys received by it and to reapply the same on any
other part or parts of the Obligations as the Secured Party may see fit,
notwithstanding any previous application by whomsoever made.
The proceeds of any collection or sale of the Charged Assets (as
defined in the Debenture), as well as any Charged Asset consisting of cash,
shall be applied by the Secured Party as provided in section 16 of the Security
Agreement among the Companies, Sport Maska Inc., SLM Trademark Acquisition
Canada Corporation and the Lenders dated as of April 1, 1997 (the "Security
Agreement").
Upon any sale of the Charged Assets by the Secured Party (including,
without limitation, pursuant to a power of sale granted by statute or under a
judicial proceeding) the receipt of the Secured Party or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the
Charged Assets so sold and such purchaser or purchasers shall not be obligated
to see to the application of any part of the purchase money paid over to the
Secured Party or such officer or be answerable in any way for the misapplication
thereof.
5. Dealings by the Secured Party. The Secured Party may grant extensions, take
and give up securities, accept compositions, grant releases and discharges and
otherwise make arrangements with the Companies and deal with other persons and
securities as the Secured Party may see fit without prejudice to the joint and
several liability of the Companies or the Secured Party's right to hold, deal
with and realize the security of the Debenture.
6. No Merger. The Debenture shall not operate by way of merger of any
indebtedness or liability of the Companies or any other person or
4.
persons to the Secured Party hereunder or under any document or negotiable
instrument by which the same may now or at any time hereafter be represented or
evidenced. No judgment recovered by the Secured Party shall operate by way of
merger of or in any way affect the security created by the Debenture or the
Secured Party's right to interest as aforesaid.
7. Additional Security. This agreement and the security afforded by the
Debenture shall be in addition to and not in replacement of or substitution for
any security now or hereafter held by the Secured Party in respect of any
indebtedness, liabilities or obligations, present or future, of the Companies to
the Secured Party or any part thereof, and shall not be prejudiced by any such
security or by any exchange, release or variation of any such security.
8. Expenses. All reasonable expenses (including without limitation legal fees on
a solicitor and his own client basis and the fees and expenses of any receiver
or receiver and manager appointed under the provisions of the Debenture)
incurred by the Secured Party in connection with:
(a) the preparation and registration of the Debenture;
(b) recovering or enforcing payment or performance of all or part of the
Obligations (including without limitation expenses incurred in
considering and protecting or improving its position, or attempting to
do so, whether before or after default); and
(c) realizing upon or otherwise dealing with the assets charged by the
Debenture (including without limitation expenses of taking possession,
protecting, preparing for sale and realizing upon any such assets),
shall be payable upon demand, shall be added to and shall be deemed to be a part
of the Obligations, shall bear interest at the Interest Rate provided for in the
Debenture and the payment thereof shall be secured by the Debenture.
9. No Obligation to Advance. Notwithstanding anything in this agreement or in
the Debenture contained, the Secured Party shall not be obligated thereby to
make any loan or other extension of credit or further loan or extension of
credit or to extend any time for payment or performance of all or any part of
the Obligations.
5.
10. Interest. Any provision of the Debenture or of this agreement
notwithstanding, payment by the Companies of interest on all indebtedness
comprising, or forming part of, the Obligations at the current rate at which
such indebtedness may bear interest for any period of time shall constitute
satisfaction of interest on the Debenture for the equivalent period of time.
11. Sale of Debenture. Any sale, transfer, delivery, negotiation or assignment
of the Debenture by the Secured Party will be made subject to the provisions of
this agreement.
12. Claims Under Debenture. Neither the Secured Party nor any subsequent holder
of the Debenture shall, at any time, claim payment under the Debenture (whether
for principal, interest or both) in an amount greater than the amount of the
indebtedness forming part of the Obligations at such time. Notwithstanding that
the Debenture is stated to be payable on demand, no demand for payment shall be
made under the Debenture unless demand is concurrently being made, or has been
made, for payment of indebtedness forming part of the Obligations in an amount
not less than the amount demanded under the Debenture.
13. Discharge. Upon payment and performance by the Companies of the Obligations,
the Secured Party shall, upon request in writing by the Companies delivered to
the Secured Party at a time when the Secured Party is under no obligation
(conditional or otherwise) to make any loan or extend any other type of credit
under the Credit Agreement, and at the expense of the Companies, discharge the
Debenture and upon the delivery by the Secured Party to the Companies of a
discharge of the Debenture, this agreement shall be terminated.
14. Set-Off. The Companies jointly and severally grant to the Secured Party the
right to set off against any and all accounts, credits or balances maintained by
any of them with the Secured Party the Obligations or any part thereof when due
and payable.
6.
15. Illegality. If one or more of the provisions of this agreement shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.
16. Benefit of the Lenders All covenants and agreements herein shall be joint
and several and shall be for the benefit of the Secured Party and for the pro
rata benefit of the Lenders.
7.
17. Gender and Headings. Words importing the singular include the plural and
vice versa and words importing gender shall include all genders. The headings in
this agreement are included for convenience of reference only, and shall not
constitute a part of this agreement for any other purpose.
IN WITNESS WHEREOF this agreement has been executed by the Companies
as of the 1st day of April, 1997.
SLM INTERNATIONAL, INC.
By: /s/ D. Xxxxx Xxxxxxx C.S.
----------------------
title - Secretary
#1 APPAREL, INC.
By: /s/ D. Xxxxx Xxxxxxx C.S.
----------------------
title - Secretary
MASKA U.S., INC.
By: /s/ D. Xxxxx Xxxxxxx C.S.
----------------------
title - Secretary
SLM TRADEMARK ACQUISITION CORP.
By: /s/ D. Xxxxx Xxxxxxx C.S.
----------------------
title - Secretary
