STOCK PLEDGE AND SECURITY AGREEMENT
Stock Pledge and Security Agreement (this "Pledge Agreement"), dated as of
the 1 day of August , 1999, by SIGNAL APPAREL COMPANY, INC., having an office at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Pledgor"), to and
in favor of GMAC COMMERCIAL CREDIT LLC, successor-in-interest by merger to BNY
FINANCIAL CORPORATION, having an office at 1290 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, SVP, Loan
Administration , for itself as a Lender and as Agent for the Lenders pursuant to
the Credit Agreement referred to below ("Pledgee").
W I T N E S S E T H:
WHEREAS, Pledgor and Pledgee have entered into certain financing
arrangements, pursuant to certain financing agreements, including, without
limitation the Credit Agreement, dated March 12, 1999 (as amended and
supplemented, the "Credit Agreement") and certain notes, instruments, guaranties
and other agreements executed and/or delivered in connection therewith (all of
the foregoing, together with the Credit Agreement, as the same now exists or may
hereafter be amended, restated, renewed, extended, replaced, supplemented or
otherwise modified, collectively, the "Agreements");
WHEREAS, Pledgor is now the direct and beneficial owner of those Series A
Preferred shares of capital stock of the Former Subsidiary as are more
particularly described on Schedule A hereto (the "Pledged Securities"); and
WHEREAS, Pledgor has agreed to secure the payment and performance of its
Obligations under the Agreements, by (i) executing and delivering to Pledgee
this Pledge Agreement, (ii) delivering to Pledgee the Pledged Securities which
are registered in the name of Pledgor, together with appropriate powers duly
executed in blank by Pledgor, and (iii) delivering to Pledgee any and all other
documents which Pledgee deems necessary to protect Pledgee's interests
hereunder;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, Pledgor hereby
agrees as follows:
1. CERTAIN DEFINITIONS
As used above and elsewhere in this Pledge Agreement the following terms
shall have the following meanings (all terms defined in the Uniform Commercial
Code which are not otherwise defined herein or in the Credit Agreement, shall
have the meanings set forth therein):
(a) "Issuers" shall mean and include each and every issuer of the
Pledged Securities.
(b) "Former Subsidiary" shall mean GIDI Holdings, Inc., an Illinois
corporation, and a former wholly owned subsidiary of Pledgor.
(c) "Pledged Property" shall mean and include the (i) Pledged
Securities, together with all cash dividends, stock dividends, redemptions,
stock, securities options, substitutions, exchanges and other distributions
now or hereafter distributed by any of the Issuers with respect to the
Pledged Securities hereinafter be delivered into the possession of Pledgee,
(ii) Pledgor's records with respect to the foregoing, and (iii) the
proceeds of all of the foregoing.
(b) Credit Agreement Terms. Terms used herein which are defined in the
Credit Agreement and are not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.
2. PLEDGE AND GRANT OF SECURITY INTEREST
As security for the prompt and unconditional payment and performance when
due of its Obligations to Pledgee, Pledgor hereby pledges, hypothecates,
assigns, transfers and sets over to Pledgee, the Pledged Property, and grants to
Pledgee a continuing security interest in the Pledged Property and the proceeds
thereof.
3. REPRESENTATIONS, COVENANTS AND WARRANTIES
Pledgor hereby covenants, represents and warrants, that:
(a) The Pledged Securities are authorized, validly issued, fully paid
and non-assessable capital stock of the respective Issuer, constitute
Pledgor's entire interest in the Issuer and constitute all of the issued
and outstanding shares of Series A Preferred capital stock of the Former
Subsidiary held in the respect of the Issuer;
(b) The Pledged Property is directly, legally and beneficially owned
by Pledgor free and clear of all claims, liens, pledges and encumbrances of
any kind, nature or description, except in favor of Pledgee;
(c) The Pledged Property is not subject to any restrictions relative
to the transfer thereof and Pledgor has the right to transfer and
hypothecate the Pledged Property free and clear of any liens, encumbrances
or restrictions, except as otherwise provided herein;
(d) The Pledged Property is duly and validly pledged to Pledgee and no
consent or approval of any governmental or regulatory authority or of any
securities exchange or the like, nor any consent or approval of any other
third party is necessary to the validity of this Pledge Agreement which has
not been obtained and a copy of which has not been furnished to Pledgee;
(e) During the term of this Pledge Agreement, if Pledgor shall
receive, have registered in its name or become entitled to receive or
acquire, or have registered in its name any stock certificate, option, or
right with respect to the securities of any Issuer (including without
limitation, any certificate representing a dividend or a distribution or
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exchange of or in connection with any reclassification of the Pledged
Securities) whether as an addition to, in substitution of, or in exchange
for any of the Pledged Property or otherwise, Pledgor agrees to accept same
as Pledgee's agent, to hold same in trust for Pledgee and to deliver same
forthwith to Pledgee or Pledgee's agent or bailee in the form received,
with the endorsement(s) of Pledgor where necessary and/or appropriate
powers and/or assignments duly executed to be held by Pledgee or Pledgee's
agent or bailee subject to the terms hereof, or if any of the foregoing is
uncertificated, register same with the Pledgee's security interest noted
therein as further security for Pledgor's Obligations to Pledgee;
(f) During the term of this Pledge Agreement, Pledgor shall not
directly or indirectly sell, assign, transfer, or otherwise dispose of, or
grant any option with respect to the Pledged Property, nor shall Pledgor
create, incur or permit any further pledge, hypothecation, encumbrance,
lien, mortgage or security interest with respect to the Pledged Property;
(g) So long as no default has occurred and is continuing, Pledgor
shall have the right to vote and exercise all corporate rights and to
receive cash dividends or real or personal property distributed by any
Issuer with respect to the Pledged Securities, provided that any stock of
any Issuer, or any options with respect to stock of any Issuer, so
distributed shall be subject to the security interest therein of Pledgee,
as provided in subparagraph (e) above; and
(h) All additional shares, options, warrants, rights or other
securities acquired by Pledgor during the term of this Pledge Agreement in
respect of the Issuers, are made and shall remain part of the Pledged
Property, subject to the first priority security interest granted herein
and during such term, Pledgor shall not accept or receive the same from any
Issuer, directly or indirectly, except subject to the foregoing requirement
and neither shall Pledgor issue, sell, grant, assign, transfer or otherwise
dispose of, any additional shares of capital stock of the Issuer or any
option or warrant with respect to, or other right or security convertible
into, any additional shares of capital stock of such Issuer, now or
hereafter authorized, but Pledgor shall deliver the same to Pledgee, to be
also held subject to the terms and conditions herein.
4. EVENTS OF DEFAULT
The occurrence of any default under the Credit Agreement shall constitute a
"default" under this Pledge Agreement.
5. REMEDIES AFTER DEFAULT
Immediately upon the occurrence of a default, and during the continuance
thereof, in addition to all other rights and remedies of Pledgee, whether
provided under law, the Credit Agreement or otherwise, Pledgee shall have the
following rights and remedies which may be exercised without notice to, or
consent by, the Pledgor, except as such notice or consent is expressly provided
for hereunder:
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(a) Pledgee, at its option, shall be empowered to exercise its
continuing right to instruct the Issuers (or the appropriate transfer agent
of the Pledged Securities) to register any or all of the Pledged Property
in the name of Pledgee or in the name of Pledgee's nominee and Pledgee may
complete, in any manner Pledgee may deem expedient, any and all stock
powers, assignments or other documents heretofore or hereafter executed in
blank by Pledgor and delivered to Pledgee and, in furtherance of the
foregoing, Pledgor shall execute and deliver to Pledgee together herewith a
Special Power of Attorney in the form of EXHIBIT 1 hereto. After said
instruction, and without further notice, Pledgee may exercise all voting
and corporate rights with respect to the Pledged Securities and may
exercise any and all rights of conversion, redemption, exchange,
subscription or any other rights, privileges, or options pertaining to any
shares of the Pledged Securities as if Pledgee were the absolute owner
thereof, including without limitation, the right to exchange, at its
discretion, any and all of the Pledged Securities upon any merger,
consolidation, reorganization, recapitalization or other readjustment with
respect thereto. Upon the exercise of any such rights, privileges or
options by Pledgee, Pledgee shall have the right to deposit and deliver any
and all of the Pledged Securities to any committee, depository, transfer
agent, registrar or other designated agency upon such terms and conditions
as Pledgee may determine, all without liability, except (i) for the gross
negligence of or willful misconduct of Pledgee, and (ii) to account for
property actually received by Pledgee. However, Pledgee shall have no duty
to exercise any of the aforesaid rights, privileges or options and shall
not be responsible for any failure to do so or delay in doing so.
(b) In addition to all of the rights and remedies of a secured party
under the Uniform Commercial Code or other applicable law, Pledgee shall
have the right, at any time and without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon Pledgor, or
any other Person (all and each of which demands, advertisements and/or
notices are hereby expressly waived to the extent permitted by law), to
proceed forthwith to collect, redeem, receive, appropriate, sell, or
otherwise dispose of and deliver the Pledged Property or any part thereof
in one or more lots at public or private sale or sales at any exchange,
brokers board or at any of Pledgee's offices or elsewhere at such prices
and on such terms as Pledgee may deem best. The foregoing disposition(s)
may be for cash or on credit or for future delivery without assumption of
any credit risk by Pledgee, with Pledgee having the right to purchase all
or any part of said Pledged Property so sold at any such sale or sales,
public or private, free of any right or equity of redemption in Pledgor,
which right or equity is hereby expressly waived or released by Pledgor.
The proceeds of any such collection, redemption, recovery, receipt,
appropriation, realization or sale, after deducting all costs and expenses
of every kind incurred relative thereto or incidental to the care,
safekeeping or otherwise of any and all Pledged Property or in any way
relating to the rights of Pledgee hereunder (including, without limitation,
appraisal, accountants, and attorneys' fees and legal expenses whether or
not due) shall be applied in accordance with the Credit Agreement. Pledgor
agrees that five (5) days prior notice by Pledgee, sent by certified mail,
postage prepaid, designating the date after which a private sale may take
place or a public auction may be held, is reasonable notification of such
matters.
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(c) Pledgor recognizes that Pledgee may be unable to effect a public
sale of all or part of the Pledged Property by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, as now or
hereafter in effect or in applicable Blue Sky or other state securities
law, as now or hereafter in effect, but may be compelled to resort to one
or more private sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such Pledged Property for
their own account for investment and not with a view to the distribution or
resale thereof. If at the time of any sale of the Pledged Property or any
part thereof, the same shall not, be effectively registered (if required)
under the Securities Act of 1933 (or other applicable state securities
law), as then in effect, Pledgee in its sole and absolute discretion is
authorized to sell the Pledged Property, or such part thereof, by private
sale in such manner and under such circumstances as Pledgee or its counsel
may deem necessary or advisable in order that such sale may legally be
effected without registration. Pledgor acknowledges and agrees that private
sales so made may be at prices and other terms less favorable to the seller
than if the Pledged Property were sold at public sale, and that Pledgee has
no obligation to delay the sale of any Pledged Property for the period of
time necessary to permit the Issuer of the Pledged Property, even if such
Issuer would agree, to register the Pledged Property for public sale under
such applicable securities laws. Pledgor acknowledges and agrees that any
private sales made under the foregoing circumstances shall be deemed to
have been in a commercially reasonable manner.
(d) All of the Pledgee's rights and remedies, including but not
limited to the foregoing and those otherwise arising under this Pledge
Agreement, the Credit Agreement, the instruments and securities comprising
the Pledged Property, applicable law or otherwise, shall be cumulative and
not exclusive and shall be enforceable alternatively, successively or
concurrently as Pledgee may deem expedient. No failure or delay on the part
of Pledgee in exercising any of its options, powers or rights or partial or
single exercise thereof, shall constitute a waiver of such option, power or
right.
6. FURTHER ASSURANCES
Pledgor agrees that at any time, and from time to time, upon the request of
Pledgee, Pledgor will execute and deliver such further documents, including but
not limited to stock powers, or other appropriate instruments of transfer in
form reasonably satisfactory to counsel for Pledgee, and will take or cause to
be taken such further acts as Pledgee may reasonably request in order to effect
the purposes of this Pledge Agreement and perfect or continue the perfection of
the security interest in the Pledged Property granted to Pledgee hereunder, in
conformity with applicable law.
7. MISCELLANEOUS
(a) Beyond the exercise of reasonable care to assure the safe custody of
the Pledged Property while held by Pledgee hereunder, Pledgee or Pledgee's agent
or bailee shall have no duty or liability to protect or preserve any rights
pertaining thereto and shall be relieved of all responsibility for the Pledged
Property upon surrendering it to Pledgor. Upon the termination of the Credit
Agreement and the indefeasible payment in full of Pledgor's Obligations to
Pledgee this Agreement shall terminate and Pledgee shall
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execute and deliver all instruments as may be necessary or proper to return or
release its security interest in the Pledged Property.
(b) No course of dealing between Pledgor and Pledgee, nor any failure or
delay by Pledgee to exercise any right, power or privilege under this Pledge
Agreement, the Credit Agreement or under any of the other documents or
agreements between Pledgor and Pledgee, shall operate as a waiver hereof or
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. No waiver of any
provision of this Pledge Agreement shall be effective unless the same shall be
in writing and signed by Pledgee, and then such waiver shall be effective only
in the specific instance and for the purpose for which given.
(c) This Pledge Agreement may not be changed, modified or amended, in whole
or in part, except by a writing signed by Pledgor and Pledgee.
(d) The provisions of this Pledge Agreement are severable, and if any
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall attach
only to such clause or provision in any such jurisdiction or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision in this Pledge Agreement in any
jurisdiction.
(e) THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF
ANY KIND OR NATURE IN ANY COURT WHETHER ARISING OUT OF, UNDER OR BY REASON OF
THIS PLEDGE AGREEMENT OR THE PLEDGED PROPERTY.
(f) This Pledge Agreement shall inure to the benefit of Pledgor and Pledgee
and their respective successors and assigns permitted under the Credit
Agreement, and shall be binding upon Pledgor and its successors and assigns
permitted under the Credit Agreement until all of the Pledgor's Obligations to
Pledgee have been indefeasibly paid in full.
(g) In the event any term or provision of this Pledge Agreement conflicts
with any term or provision of the Credit Agreement, such term or provision of
the Credit Agreement shall control.
8. GOVERNING LAW
This Pledge Agreement and the obligations of the parties hereunder shall be
governed by, and construed and interpreted in accordance with, the internal laws
of the State of New York, without regard to the conflicts of law principles of
said State.
9. JURISDICTION
Pledgor hereby expressly submits and irrevocably consents in advance to
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the nonexclusive jurisdiction of the Supreme Court of the State of New York for
the County of New York, and of the United States District Court for the Southern
District of New York to hear and determine any claims or disputes pertaining
directly or indirectly to this Pledge Agreement or to any matter arising
therefrom in any such action or proceeding and Pledgor waives any objection
based on forum non conveniens and any objection to venue in connection
therewith. In any such litigation, Pledgor waives personal service of the
summons and complaint, or other process or notice of motion or other application
or papers issued therein, and agrees that service of such summons and complaint,
or other process or papers shall be made inside or outside the State of New York
by registered or certified mail, return receipt requested, addressed to Pledgor
at its address set forth above, together with simultaneous delivery of a copy
thereof to Pledgor's counsel, or in such other manner as may be permissible
under the rules of said Courts.
IN WITNESS WHEREOF, the undersigned has caused these presents to be duly
executed and delivered on the day and year first above written.
PLEDGOR:
SIGNAL APPAREL COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Vice President
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SCHEDULE A
PLEDGED SECURITIES
Class Certificate Number
Issuer of Stock Number of Shares
------ -------- ------ ---------
GIDI Holdings, Inc. Series A
Preferred 35
EXHIBIT 1
SPECIAL POWER OF ATTORNEY
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
KNOW ALL MEN BY THESE PRESENTS, that SIGNAL APPAREL COMPANY, INC., having
an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter "Pledgor"), hereby appoints and constitutes GMAC COMMERCIAL CREDIT
LLC, successor-in-interest by merger to BNY FINANCIAL CORPORATION, for itself as
a Lender and as Agent for the Lenders (hereinafter "Pledgee") pursuant to the
Revolving Credit, Term Loan and Security Agreement between Pledgor and Pledgee
dated March 12, 1999, as amended and supplemented, and each officer of Pledgee,
its true and lawful attorney, with full power of substitution and with full
power and authority to perform the following acts on behalf of Pledgor at any
time after the occurrence and during the continuance of a default under the
Pledge Agreement (as hereinafter defined):
1. Execution and delivery of any and all agreements, documents, instruments
of assignment, or other papers which Pledgee in its reasonable discretion, deems
necessary or advisable for the purpose of assigning, selling, or otherwise
disposing of all of the right, title, and interest of Pledgor in and to the
Pledged Securities, as defined in the Pledge Agreement, together with all cash
dividends, stock dividends, redemptions, securities or substitutions, exchanges
or other distributions now or hereafter pledged, assigned or otherwise
transferred to Pledgee by Pledgor in respect of the Pledged Securities and all
registrations, recordings, reissues, extensions, and renewals thereof, or for
the purpose of recording, registering and filing of, or accomplishing any other
formality with respect to the foregoing.
2. Execution and delivery of any and all documents, statements,
certificates or other papers which Pledgee in its sole discretion, deems
necessary or advisable to further the purposes described in paragraph 1 hereof.
This Power of Attorney, being a power coupled with an interest, is made
pursuant to a Stock Pledge and Security Agreement between Pledgor and Pledgee
dated of even date
herewith (the "Pledge Agreement") and may not be revoked until indefeasible
payment in full of all Pledgor's "Obligations", as such term is defined in the
Pledge Agreement.
Dated as of ________________, 1999
PLEDGOR:
SIGNAL APPAREL COMPANY, INC.
By: __________________________________
Title: ________________________________
COLLATERAL ASSIGNMENT OF STOCK PURCHASE AGREEMENT
COLLATERAL ASSIGNMENT, made as of this 1 day of August, 1999, by SIGNAL
APPAREL COMPANY, INC., having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Client") in favor of GMAC COMMERCIAL CREDIT LLC,
successor-in-interest by merger to BNY FINANCIAL CORPORATION, as Agent and as
Lender pursuant to the Credit Agreement referred to below, having offices at
1290 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, SVP, Loan Administration Department (the "Secured Party").
W I T N E S S E T H:
WHEREAS, Secured Party has heretofore entered into certain financing
arrangements with Client, pursuant to certain financing agreements, including
but not limited to that certain Revolving Credit, Term Loan and Security
Agreement dated March 12, 1999 by and between Secured Party, as a Lender and as
Agent for the Lenders thereunder, and Client, as amended and supplemented and
related agreements and documentation, each by and between Client and BNYFC (the
"Credit Agreement") and other related documents, agreements, instruments,
guaranties or notes granting collateral security or creating or evidencing
indebtedness executed and/or delivered in connection therewith or related
thereto, including, but not limited to the Factoring Agreement (as therein
defined) and this Collateral Assignment of Stock Purchase Agreement (all of the
foregoing, as the same may now exist or hereafter be amended, modified or
supplemented, together with the Credit Agreement, are collectively referred to
herein as the "Agreements"); and
WHEREAS, Client and ▇▇▇▇ ▇. ▇▇▇▇▇▇, an executive officer and director of
Client, have heretofore entered into or contemplate entering into that certain
Stock Purchase Agreement dated as of July 31, 1999, providing for, among other
things, the sale (the "Stock Sale") of all of the common stock by Client held in
GIDI Holdings, Inc. ("GIDI "), one of its wholly owned subsidiaries, to ▇▇▇▇ ▇.
▇▇▇▇▇▇, an executive officer and director of Client (said Stock Purchase
Agreement as the same may now exist or hereafter be amended, modified or
supplemented, is hereinafter referred to as the "Contract"), a true and complete
copy of which is annexed hereto and made a part hereof as Exhibit A; and
WHEREAS, pursuant to the Contract and the Stock Sale, Client shall receive
from GIDI : (a) thirty five (35) shares of Series A Preferred Stock, with a
stated value of $10,000.00 per share (the ""GIDI Preferred Stock"); and (b)
certain other payments, distributions and/or entitlements thereunder from time
to time, due and to become due in relation to the transactions therein
described, which may be both cash and non-cash (collectively, "Payments"); and
WHEREAS, the execution and delivery of the Contract and/or the Stock Sale,
as well as the receipt by the Client of the GIDI Preferred Stock and the other
Payments in connection therewith, may breach certain provisions of the Credit
Agreement and on or about the date hereof, the Client has accordingly requested
Secured Party to execute and deliver a waiver (the "GIDI Waiver") in respect of
any such breaches and the Secured Party is willing to provide the GIDI Waiver,
subject to the execution and delivery by the Client of this Collateral
Assignment of
Stock Purchase Agreement and a Stock Pledge Agreement, whereby the GIDI
Preferred Stock shall be pledged by the Client to the Secured Party as further
collateral security for all Obligations (as defined herein) of the Client,
NOW, THEREFORE, in order to induce Secured Party to enter into the GIDI
Waiver, and in consideration thereof, Client hereby agrees in favor of Secured
Party as follows:
1. GRANT OF SECURITY INTEREST
The Client hereby confirms that all existing and future rights to receive
the Payments, profits and other entitlements and/or amounts covered by this
Collateral Assignment of Stock Purchase Agreement are included within and form
and part of the Collateral consisting of General Intangibles in which a security
interest has heretofore been granted by the Client to the Secured Party pursuant
to the Credit Agreement. Without limiting the foregoing, as security for the
prompt and unconditional payment when due of each and every one of the
"Obligations", Client hereby grants, assigns, transfers and sets over to Secured
Party and grants Secured Party a continuing security interest in and lien upon
all of Client's right, title and interest in and to the Contract, including, but
not limited to: (a) all of Client's right, title and interest in and to
Payments, profits and other entitlements and/or amounts with respect to the
Contract and/or the GIDI Preferred Stock; and (b) all other monies now or
hereafter payable to Client arising from any sale, subcontract, cancellation,
termination, assignment or other disposition of the Contract and/or the GIDI
Preferred Stock (all of the foregoing are collectively referred to herein as the
"Collateral").
2. OBLIGATIONS SECURED
The assignment and security interest granted to Secured Party hereunder
shall secure the prompt and indefeasible payment and performance of any and all
"Obligations", as such quoted term is defined in the Credit Agreement.
3. REPRESENTATIONS, COVENANTS AND WARRANTIES
Client, covenants, represents and warrants that:
(a) Client's rights under the Contract and to the GIDI Preferred Stock
are free and clear of all claims, liens, pledges and encumbrances of any
kind, nature or description, except for those granted to Secured Party
hereunder.
(b) The Contract and the GIDI Preferred Stock are each not subject to
any restrictions relative to the transfer thereof and Client has the right
to transfer, assign and encumber its interest in the Contract and the GIDI
Preferred Stock in favor of Secured Party.
(c) Until all of the Obligations have been indefeasibly paid and
satisfied in full, Client shall not directly or indirectly further sell,
assign, transfer or otherwise further dispose of the Contract , the GIDI
Preferred Stock or any part or rights thereof (except for the mandatory
redemption of stock by GIDI as specified in the Contract, the proceeds of
which are also included within this Assignment), nor shall Client create,
incur or permit any further pledge, encumbrance, lien, mortgage or security
interest with respect to the Contract, the GIDI Preferred Stock, or any
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part or rights thereof.
(d) Until the Obligations have been indefeasibly paid and satisfied in
full, Client will not consent to or enter into any alteration, amendment,
termination or cancellation of the Contract and/or the GIDI Preferred Stock
without first having obtained the written consent of Secured Party.
(e) Until the Obligations have been indefeasibly paid and satisfied in
full, (i) Client hereby assigns, transfers and sets over to Secured Party,
(ii) Secured Party may receive for application to the Obligations in such
manner as Secured Party may determine in its sole discretion, and (iii)
Client hereby authorizes and directs each of ▇▇▇▇ ▇. ▇▇▇▇▇▇ and GIDI and
each of ▇▇▇▇ ▇. ▇▇▇▇▇▇ and GIDI hereby agree, to remit directly to Secured
Party, any and all of the Collateral, including, but not limited to, all
Payments, proceeds, profits and distributions to which Client would be
otherwise entitled to under the terms of the Contract, by reason of the
GIDI Preferred Stock, or otherwise.
(f) In furtherance of the assignment and security interest hereunder,
Client hereby grants to Secured Party the right, at Secured Party's option
and at all times and from time to time, to enforce any of the conditions,
covenants or agreements contained in the Contract, the GIDI Preferred
Stock. or otherwise, and to do anything that Client would have the right to
do under the Contract, or in respect of the GIDI Preferred Stock, in the
absence of this Assignment; provided, however, that nothing contained
herein shall or shall be deemed to otherwise obligate Secured Party to take
or forebear from taking any action which Client may be entitled or required
to take or not take, or shall be deemed, absent the occurrence of an Event
of Default and Secured Party's enforcement of any of its rights and/or
remedies under or in connection with any of the Agreements, to prohibit
Client from taking any such action in its own right.
4. FURTHER ASSURANCES
Client agrees that, at any time and from time to time, upon written request
of Secured Party, Client will execute and deliver such further documents and
take such action as shall be reasonably necessary to effectuate the purposes of
this Assignment.
5. MISCELLANEOUS
(a) Neither the acceptance of this Assignment by Secured Party, nor any
provision hereof, nor the exercise of any right hereunder, shall constitute an
assumption by Secured Party of any obligation of Client under the Contract, in
respect of any GIDI Preferred Stock, or otherwise.
(b) No course of dealing between Secured Party and Client, nor any failure
or delay by Secured Party to exercise any right, power, or privilege hereunder
or under any other agreements, instruments and documents executed and delivered
in connection therewith shall operate as a waiver hereof or thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
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(c) The provisions of this Assignment are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall attach only to
such clause or provision in such jurisdiction or part thereof, and shall not in
any manner affect such clause or provision in any other jurisdiction or any
other clause or provision in this Assignment in any such jurisdiction.
(d) In the event of any conflict between the terms and provisions of this
Assignment and the terms and provisions of the Credit Agreement, the terms and
provisions of the Credit Agreement shall control.
(e) All notices, requests and demands to or upon Client or Secured Party
shall be in writing and shall be deemed to have been duly given or made: if by
hand, immediately upon delivery; if by telex or telegram, immediately upon
sending; if by express mail or any other overnight delivery service, one (1) day
after dispatch; and if mailed by certified mail, return receipt requested, five
(5) days after mailing. All notices, requests and demands are to be given or
made to the respective parties at the addresses indicated above (or to such
other addresses as either Client or Secured Party may designate by notice in
accordance with the provisions of this paragraph).
(f) Any failure or delay be Secured Party to require strict performance by
Client of any of the provisions, warranties, terms, and conditions contained
herein or in any other agreement, document, or instrument shall not affect
Secured Party's right to demand strict compliance and performance therewith, and
any waiver of any default shall not waive or affect any other default, whether
prior or subsequent thereto, and whether of the same or different type.
(g) This Assignment may not be terminated, modified, altered or limited
orally, but only by an instrument in writing, signed by an officer of Secured
Party and by an Officer of Client.
6. SUCCESSORS AND ASSIGNS
This Assignment shall inure to the benefit of Secured Party and its
successors and assigns, and shall be binding upon Client, and Client's
successors and assigns, until all of the Obligations have been indefeasibly paid
in full.
7. JURY TRIAL WAIVER AND CHOICE OF LAW
(a) CLIENT AGREES THAT ALL ACTIONS AND PROCEEDINGS RELATING DIRECTLY OR
INDIRECTLY TO THIS ASSIGNMENT OR ANY OF THE OTHER RELATED AGREEMENTS OR ANY
OBLIGATION SHALL BE LITIGATED IN THE FEDERAL DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK OR, AT SECURED PARTY'S OPTION, IN ANY OTHER COURTS LOCATED
IN NEW YORK STATE OR ELSEWHERE AS SECURED PARTY MAY SELECT AND THAT SUCH COURTS
ARE CONVENIENT FORUMS AND CLIENT SUBMITS TO THE PERSONAL JURISDICTION OF SUCH
COURTS. CLIENT HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT OR OTHER
PROCESS OR PAPERS TO BE ISSUED THEREIN AND HEREBY AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT, PROCESS OR PAPERS MAY BE MADE BY
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REGISTERED OR CERTIFIED MAIL ADDRESSED TO CLIENT AT THE ADDRESS APPEARING
HEREIN.
(b) THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS
PRINCIPLES. ALL TERMS USED HEREIN, UNLESS OTHERWISE DEFINED HEREIN, SHALL HAVE
THE MEANINGS GIVEN IN THE NEW YORK UNIFORM COMMERCIAL CODE.
(c) TO THE EXTENT LEGALLY PERMISSIBLE, BOTH CLIENT AND SECURED PARTY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION RELATING TO TRANSACTIONS UNDER THIS
ASSIGNMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
IN WITNESS WHEREOF, the Client has caused these presents to be duly
executed and delivered the day and year first above written.
SIGNAL APPAREL COMPANY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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