EXHIBIT 10.23.14
GMAC COMMERCIAL FINANCE LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
August 12, 2004
TARRANT APPAREL GROUP
TAG MEX, INC.
FASHION RESOURCE (TCL), INC.
UNITED APPAREL VENTURES, LLC.
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Re: WAIVER
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"), 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"). All
capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Credit Agreement.
1. The borrowers have advised Agent that, for the quarter period
ended June 30, 2004, (i) Borrowers' Tangible Net Worth was less than the minimum
Tangible Net Worth permitted as at June 30, 2004 under Section 7.5(a) (TANGIBLE
NET WORTH) of the Credit Agreement, (ii) Borrowers' Fixed Charge Coverage Ratio
was less than the minimum Fixed Charge Coverage Ratio permitted as at June 30,
2004 under Section 7.5(b) (FIXED CHARGE COVERAGE RATIO) of the Credit Agreement,
and (iii) Borrowers' Total Leverage Ratio was greater than the maximum Total
Leverage Ratio permitted as at June 30, 2004 under Section 7.5(d) (TOTAL
LEVERAGE RATIO) of the Credit Agreement. As a result of such noncompliance as at
June 30, 2004, Events of Default have occurred and are continuing under
subsection (e) of Article XI (EVENTS OF DEFAULT) of the Credit Agreement (the
"SUBJECT EVENTS OF DEFAULT"). The Borrowers have requested that Agent waive the
Subject Events of Default, and Agent has agreed to, and hereby does, waive such
Subject Events of Default subject to the terms and conditions set forth herein;
PROVIDED THAT, Agent does not waive any Events of Default other than the Subject
Events of Default as at June 30, 2004 specified above, and Agent hereby reserves
all rights and remedies granted to Agent under the Credit Agreement, the
Other Documents, applicable law or otherwise, and nothing contained herein shall
be construed to limit, impair or otherwise affect the right of Agent to declare
a default or an Event of Default with respect to any future non-compliance with
any covenant, term or provision of the Credit Agreement or any other document
now or hereafter executed and delivered in connection therewith.
2. Each of the Borrowers hereby acknowledges, confirms and agrees
that all amounts charged or credited to the Loan Account as of August 12, 2004
are correct and binding upon each of the Borrowers and that all amounts
reflected to be due and owing in the Loan Account as of August 12, 2004 are due
and owing without defense, offset or counterclaim.
3. In consideration of this agreement and the performance thereof
and other good and valuable consideration, each Borrower forever releases and
discharges Agent, Lenders, its and their affiliates, officers, directors,
consultants, agents, attorneys 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, variances, trespasses, damages, judgments, extent, 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 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.
4. Except as specifically set forth herein, no other changes or
modifications to the Credit Agreement are intended or implied, and, in all other
respects, the Credit Agreement shall continue to remain in full force and effect
in accordance with its terms as of the date hereof. Except as specifically set
forth herein, nothing contained herein shall evidence a waiver or amendment by
Agent of any other provision of the Credit Agreement nor shall anything
contained herein be construed as a consent by Agent to any transaction other
than those specifically consented to herein.
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5. The terms and provisions of this agreement 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 agreement.
6. This agreement may be executed in any number of counterparts,
but all of such counterparts shall together constitute but one and the same
agreement. In making proof of this agreement, it shall not be necessary to
produce or account for more than one counterpart thereof signed by each of the
parties hereto. Delivery of an executed counterpart of this agreement by
telefacsimile shall have the same force and effect as delivery of an original
executed counterpart of this agreement. Any party delivering an executed
counterpart of this agreement by telefacsimile also shall deliver an original
executed counterpart of this agreement, but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this agreement as to such party or any other party.
7. This agreement sets forth the entire agreement and
understanding of the parties with respect to the matters set forth herein. This
agreement cannot be changed, modified, amended or terminated except in a writing
executed by the party to be charged.
Very truly yours,
GMAC COMMERCIAL FINANCE LLC,
as Agent
By: /S/ ILLEGIBLE
----------------------------------------
Title: SENIOR VICE PRESIDENT
-------------------------------------
ACKNOWLEDGED AND AGREED:
TARRANT APPAREL GROUP
By: /S/ XXXXXXX XXXX
--------------------------------
Xxxxxxx Xxxx
Title: Chief Financial Officer
TAG MEX, INC.
By: /S/ XXXXXXX XXXX
--------------------------------
Xxxxxxx Xxxx
Title: Chief Financial Officer
FASHION RESOURCE (TCL), INC.
By: /S/ XXXXXXX XXXX
--------------------------------
Xxxxxxx Xxxx
Title: Chief Financial Officer
UNITED APPAREL VENTURES, LLC
By: /S/ XXXXXXX XXXX
--------------------------------
Xxxxxxx Xxxx
Title: Manager
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