EXHIBIT 10.23.13
GMAC COMMERCIAL FINANCE LLC
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
May 6, 2004
TARRANT APPAREL GROUP
TAG MEX, INC.
FASHION RESOURCE (TCL), INC.
UNITED APPAREL VENTURES, LLC
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Re: AMENDMENT TO CREDIT AGREEMENT
Gentlemen:
Reference is made to the Revolving Credit, Factoring and Security
Agreement, dated as of January 21, 2000, by and among Tarrant Apparel Group
("Tarrant"), Tag Mex, Inc. ("Tag"), Fashion Resource (TCL), Inc. ("Fashion"),
United Apparel Ventures, LLC ("United"; and together with Tarrant, Tag and
Fashion, each, individually, a "Borrower" and collectively, the "Borrowers") and
GMAC Commercial Finance LLC, as successor by merger with GMAC Commercial Credit
LLC, as agent (as a lender and as successor in interest to Finova Capital
Corporation and Sanwa Bank California, the "Agent" or "Factor"), and the Lenders
from time to time parties thereto (as heretofore amended, and as the same now
exists or may hereafter be amended, restated, renewed, replaced, substituted,
supplemented, extended, or otherwise modified, the "Credit Agreement").
Borrowers have requested that Agent make certain amendments to the
Credit Agreement and Agent has agreed to do so, subject to the terms and
provisions set forth herein, all as more particularly set forth below.
1. DEFINITIONS. All capitalized terms used and not otherwise defined
herein shall have the respective meanings ascribed to such terms in the Credit
Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. Effective as of the date hereof, the
Credit Agreement is hereby amended as follows:
(a) The definition of "Maximum Credit Amount" as set forth in
Section 1.2 of the Credit Agreement is hereby amended by deleting the dollar
amount "$90,000,000" and by substituting the dollar amount "$45,000,000" in its
place and stead.
(b) The definition of "Tangible Net Worth" as set forth in
Section 1.2 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
""Tangible Net Worth" means the gross book value of Borrowers'
assets (excluding any minority equity interest in any entity
owned or controlled
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times a Total Leverage Ratio in a ratio of not greater than
the maximum ratios set forth below in respect to the
corresponding dates noted below:
Date Total Leverage Ratio
--------------------------------------------------------
March 31, 2004 1.50 to 1.0
June 30, 2004 1.60 to 1.0
September 30, 2004 1.60 to 1.0
December 31, 2004 1.50 to 1.0"
(d) Section 8.6 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"8.6 CAPITAL EXPENDITURES. Contract for, purchase or make any
expenditure or commitment for fixed or capital assets
(including capitalized leases) in any fiscal quarter in an
aggregate amount in excess of Seven Hundred Thousand
($700,000) Dollars."
(e) Section 10.9 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"10.9 MONTHLY FINANCIAL STATEMENTS. Furnish Agent within forty
five (45) days of the end of each month by 5:00 p.m. (EDT) of
such day, an unaudited balance sheet of TAG and its
Subsidiaries on a consolidated and consolidating basis, an
unaudited statement of income and stockholders equity and
changes in financial position of Borrower reflecting results
of operations from the beginning of the fiscal year to the end
of such month and for such month, and a statement of cash
flows, prepared on a basis consistent with prior practices and
complete and correct in all material respects, subject to
normal year end adjustments provided, however, that, as a one
time accommodation, Agent waives the requirement that Borrower
deliver to Agent such Monthly Financial Statements for the
months of January, February and March, 2004."
(f) Section 15.1 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"15.1 TERM. This Agreement, which shall inure to the benefit
of and shall be binding upon the respective successors and
permitted assigns of each of Borrower and Lender, shall become
effective on the date hereof and shall continue in full force
and effect until the Maturity Date unless sooner terminated as
herein provided, including, without limitation, as pursuant to
Article XII.
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Notwithstanding anything to the contrary contained herein,
Borrower and Agent, on behalf of Secured Parties, shall each
have the right, upon not less than ninety (90) days prior
written notice to the other parties to this Agreement, to
terminate this Agreement. Any termination of this Agreement
will be accompanied by prepayment in full of all of the
Obligations of Borrower, including, without limitation, the
unpaid principal amount of Advances and the stated amount of
Letters of Credit then outstanding, together with the payment
of any accrued and unpaid interest and fees."
3. AMENDMENT FEE. In consideration of the amendments set forth herein,
Borrowers acknowledge, confirm and agree that Agent may charge and Borrowers
shall pay an amendment fee in the amount of (i) Three Hundred Fifty Thousand
Dollars ($350,000) which shall be fully earned as of the date hereof and payable
(a) Two Hundred Thousand Dollars ($200,000) upon execution of this Amendment and
(b) One Hundred Fifty Thousand Dollars ($150,000) on May 28, 2004 and (ii) an
additional fee of (a) Fifty Thousand Dollars ($50,000) if this Agreement is not
terminated and the Obligations of the Borrowers have not been paid in full by
June 30, 2004, (b) One Hundred Thousand Dollars ($100,000) if this Agreement is
not terminated and the Obligations of the Borrowers have not been paid in full
by July 31, 2004, (c) One Hundred Fifty Thousand Dollars ($150,000) if this
Agreement is not terminated and the obligations of the Borrowers have not been
paid in full by Xxxxxx 00, 0000, (x) Two Hundred Thousand Dollars ($200,000) if
this Agreement is not terminated and the Obligations of the Borrowers have not
been paid in full by September 30, 2004, or (e) Two Hundred Fifty Thousand
Dollars ($250,000) if this Agreement is not terminated and the Obligations of
the Borrowers have not been paid in full by October 31, 2004.
4. CONDITIONS TO EFFECTIVENESS. The effectiveness of this amendment
and the agreement of Agent to the modifications and amendments set forth in this
amendment are subject to the fulfillment of the following conditions precedent:
(a) Agent shall have received all fees and other amounts due
and payable to Agent upon or prior to the effectiveness of this amendment;
(b) Each of the representations and warranties made by
Borrowers in the Credit Agreement shall be true and correct in all material
respects on and as of the date of this amendment; and
(c) No Event of Default shall have occurred and he continuing
on the date of this amendment, or would exist after giving effect to the
transactions contemplated under this amendment.
5. RELEASE. In consideration of this agreement and the performance
thereof and other good and valuable consideration, each Borrower forever
releases and discharges Agent, its affiliates, officers, directors, consultants,
agents, and employees, and their respective successors and assigns (collectively
the "Released Parties") from any and all actions, causes of action, suits,
debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises,
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variances, trespasses, damages, judgments, executions, claims and demands
whatsoever, in law, admiralty or equity, without defense, offset or
counterclaim, which any Borrower, directly or indirectly, ever had or now or
can, shall or may, have against any of the Released Parties for, upon, or by
reason of any matter, cause or thing whatsoever. Each Borrower expressly and
explicitly acknowledges that it is aware of and is knowingly waiving any rights
that he, she, or it may have against the Released Parties under the provisions
of California Civil Code Section 1542 (and any similar principle of law under
any other applicable jurisdiction), which section reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
In addition, to the foregoing, each of the Borrowers agrees to forever refrain
and forbear from commencing, assisting, instituting, prosecuting or encouraging
others to institute or prosecute any litigation, action, arbitration,
administrative or other proceeding of any kind against any of the Released
Parties directly or indirectly arising out of, resulting from or relating in any
way to the subject matter of or the fact and course of conduct underlying the
releases granted herein.
6. NO OTHER MODIFICATIONS. Except as specifically set forth herein, no
other amendment, changes or modifications to the Credit Agreement or the Other
Documents are intended or implied, and, in all other respects, the Credit
Agreement and the Other Documents shall continue to remain in full force and
effect in accordance with their terms as of the date hereof. Except as
specifically set forth herein, nothing contained herein shall evidence a waiver
or amendment by the Agent of any other provision of the Credit Agreement or the
Other Documents nor shall anything contained herein be construed as a consent by
the Agent to any transaction other, than those specifically consented to herein.
7. NO THIRD EARLY BENEFICIARIES. The terms and provisions of this
amendment shall be for the benefit of the parties hereto and their respective
successors and assigns; no other person, firm, entity or corporation shall have
any right, benefit or interest under this amendment.
8. COUNTERPARTS. This amendment may be signed in counterparts, each of
which shall be an original and all of which taken together constitute one
amendment. In making proof of this amendment, it shall not be necessary to
produce or account for more than one counterpart signed by the party to be
charged.
9. MERGER. This amendment sets forth the entire agreement and
understanding of the parties with respect to the matters set forth herein. This
amendment cannot be changed, modified, amended or terminated except in a writing
executed by the party to be charged.
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10. Governing Law. This amendment shall be governed and construed in
accordance with the laws of the state of New York.
Very truly yours,
GMAC COMMERCIAL FINANCE LLC
By: /S/ ILLEGIBLE
-----------------------------------
Title: Senior Vice President
ACKNOWLEDGED AND AGREED:
TARRANT APPAREL GROUP
By: /S/ XXXXXXX XXXX
------------------------------
Title: CFO
TAG MEX, INC.
By: /S/ XXXXXXX XXXX
------------------------------
Title: CFO
FASHION RESOURCE (TCL), INC.
By: /S/ XXXXXXX XXXX
------------------------------
Title: CFO
UNITED APPAREL VENTURES, LLC
By: /S/ XXXXXXX XXXX
------------------------------
Title: Manager
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