807 SOUTH MAIN STREET, CHASE CITY, VIRGINIA (TOGETHER WITH ALL RENTS, LEASES
AND OTHER RIGHTS WITH RESPECT THERETO) (COLLECTIVELY, THE "ADDITIONAL
COLLATERAL").
IN CONNECTION WITH THE ADDITIONAL COLLATERAL, CONTEMPORANEOUSLY
WITH THE EXECUTION OF THIS AMENDMENT, BORROWERS SHALL CAUSE TO BE DELIVERED TO
LENDER A TITLE INSURANCE POLICY INSURING LENDER'S LIEN THEREON, WHICH POLICY
SHALL BE FROM AN INSURER AND IN FORM, CONTENT AND AMOUNT SATISFACTORY TO LENDER
(B)
FROM AND AFTER THE DATE HEREOF, REFERENCES
TO "COLLATERAL" UNDER THE LOAN AGREEMENT SHALL BE DEEMED TO INCLUDE, WITHOUT
LIMITATION, THE ADDITIONAL COLLATERAL.
(C)
ON OR BEFORE SEPTEMBER 15, 2003, BORROWERS
SHALL CAUSE TO BE DELIVERED TO LENDER, AT THE SOLE COST AND EXPENSE OF BORROWERS
(I) AN APPRAISAL ON THE ADDITIONAL COLLATERAL IN FORM, CONTENT AND PREPARED BY
AN APPRAISER SATISFACTORY TO LENDER AND (II) AN ENVIRONMENTAL AUDIT WITH RESPECT
TO THE ADDITIONAL COLLATERAL IN FORM, CONTENT AND PERFORMED BY AN ENVIRONMENTAL
ENGINEER SATISFACTORY TO LENDER.
6.
Inventory.
(A)
ON OR BEFORE SEPTEMBER 30, 2003, AT
BORROWERS' SOLE COST AND EXPENSE, BORROWERS SHALL CAUSE TO BE DELIVERED TO
LENDER AN APPRAISAL ON BORROWERS' INVENTORY IN FORM, CONTENT AND FROM AN
APPRAISER ACCEPTABLE TO LENDER.
3
(B)
ON OR BEFORE AUGUST 22, 2003, BORROWERS,
LENDER AND BORROWERS' CUSTOMS BROKER SHALL ENTER IN AN AGREEMENT IN THE FORM
ATTACHED HERETO AS EXHIBIT "A" REGARDING BORROWERS' IN-TRANSIT INVENTORY AND THE
DOCUMENTS OF TITLE WITH RESPECT THERETO.
(C)
FROM AND AFTER THE DATE HEREOF, AND WITHOUT
IN ANY WAY LIMITING THE GENERALITY OF ANY PROVISIONS OF THE LOAN AGREEMENT, THE
FOLLOWING ITEMS OF INVENTORY, AS DETERMINED BY LENDER FROM TIME TO TIME, SHALL
IN NO EVENT BE DEEMED ELIGIBLE INVENTORY:
(I)
INVENTORY WHICH IS EQUAL TO OR GREATER
THAN 12 MONTHS OLD;
(II)
THAT PORTION OF A PARTICULAR ITEM OF
INVENTORY WHICH IS IN EXCESS OF THE QUANTITY OF SUCH ITEM OF INVENTORY SOLD BY
THE BORROWERS DURING THE IMMEDIATELY PRECEDING 12 MONTH PERIOD;
(III)
ALL INVENTORY OF A PARTICULAR TYPE
(EXCLUDING NEW ITEMS OF INVENTORY WHICH HAD NOT BEEN PREVIOUSLY OFFERED FOR SALE
BY BORROWERS), REGARDLESS OF THE AGE THEREOF, IF NO SALES OF THAT TYPE OF
INVENTORY HAVE BEEN MADE WITHIN THE IMMEDIATELY PRECEDING 12 MONTH PERIOD; AND
(IV)
INVENTORY PURCHASED OR MANUFACTURED BY
BORROWERS FOR A PARTICULAR HOLIDAY SEASON, DURING THE APPLICABLE PERIOD SHOWN ON
EXHIBIT "B" ATTACHED HERETO.
BY WAY OF EXAMPLE ONLY, INVENTORY PURCHASED OR
MANUFACTURED BY BORROWERS AND CONSISTING OF CHRISTMAS CANES WOULD NOT BE
ELIGIBLE INVENTORY FOR THE PERIOD FROM DECEMBER 26 THROUGH AND INCLUDING MARCH
1.
7.
Key Man Life Insurance.
On or before the
date hereof, Borrowers shall cause to be delivered to Lender an assignment
agreement (with the acknowledgment of the insurance issuer) in form and content
satisfactory to Lender, with respect to a key-man life insurance policy on the
life of Uziel Frydman in an amount equal to at least One Million Dollars
($1,000,000).
8.
Movement of Equipment.
(A)
IN THE EVENT THAT BORROWERS DESIRE TO MOVE
ANY EQUIPMENT OF BORROWERS TO A