EXHIBIT 10.53
AMENDMENT NO. 15 TO FINANCING AGREEMENTS
FARAH U.S.A., INC.
0000 Xxxxxxx Xxxx
Xx Xxxx, Xxxxx 00000
August 1, 1995
Congress Financial Corporation (Southwest)
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Gentlemen:
Congress Financial Corporation (Southwest) ("Lender"), Farah U.S.A., Inc.
("Farah USA"), Value Clothing Company, Inc. ("Value Clothing"), Farah
Manufacturing (U.K.) Limited ("Farah UK", and together with Farah USA and Value
Clothing, individually and collectively, "Borrowers") have entered into
financing arrangements pursuant to the Accounts Financing Agreement [Security
Agreement], dated as of August 2, 1990, between Lender and Farah USA and various
supplements thereto, as amended pursuant to Amendment No. 1 to Financing
Agreements, dated November 5, 1990, Amendment No. 2 to Financing Agreements,
dated February 11, 1991, Amendment No. 3 to Financing Agreements, dated January
29, 1992, Amendment No. 4 to Financing Agreements dated June 25, 1992, Amendment
No. 5 to Financing Agreements, dated August 31, 1992, Amendment No. 6 to
Financing Agreements, dated September 4, 1992, Amendment No. 7 to Financing
Agreements, dated September 16, 1992, Amendment No. 8 to Financing Agreements,
dated as of May 7, 1993, Amendment No. 9 to Financing Agreements, dated July 16,
1993, Amendment No. 10 to Financing Agreements, dated November 3, 1993,
Amendment No. 11 to Financing Agreements, dated as of February 9, 1994,
Amendment No. 12 to Financing Agreements, dated as of July 14, 1994, Amendment
No. 13 to Financing Agreements, dated as of March 7, 1995, Amendment No. 14 to
Financing Agreements, dated as of April 5, 1995, and as amended pursuant to the
letter agreement dated as of October 28, 1992 (collectively, as so amended and
as amended hereby, the "Accounts Agreement", and together with all supplements
thereto, including, but not limited to, the Covenant Supplement to Accounts
Financing Agreement [Security Agreement] dated as of August 2, 1990 (the
"Covenant Supplement"), the Trade Financing Agreement Supplement to Accounts
Financing Agreement [Security Agreement] dated as of August 2, 1990 (the "Trade
Financing Supplement"), and all other agreements, documents and instruments at
any time executed and/or delivered in connection with any of the foregoing or
related thereto, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, collectively, the
"Financing Agreements"), which Financing Agreements include, inter alia, the
guarantees of all obligations of Borrowers to Lender by each of Farah
Incorporated, Farah International, Inc., Value Slacks Inc., Farah Manufacturing
Company, Inc., Farah Manufacturing Company of New Mexico, Inc., FTX, Inc., Radco
Sportswear, Inc., Farah Manufacturing Services, Inc., Farah Clothing Company,
Inc., a Delaware corporation, and Corporacion Farah-Costa Rica S.A.
(individually and collectively "Guarantors"), and the General Security
Agreement, dated August 2, 1990, by Farah Incorporated in favor of Congress (the
"Farah Inc. Security Agreement"). Borrowers and Guarantors have requested
certain amendments to the Financing Agreements and Lender is willing to agree to
such amendments
subject to the terms and conditions set forth herein. By this Agreement, Lender,
Borrowers and Guarantors desire and intend to set forth the terms of such
financing arrangements and evidence such amendments.
In consideration of the foregoing and the respective agreements and
covenants contained herein, the parties hereto agree as follows:
1. Definitions. All capitalized terms used herein shall have the meaning
assigned thereto in the other Financing Agreements, unless otherwise defined
herein.
2. Amendments to Definitions. (a) Maximum Credit. All references to the
term "Maximum Credit" in the Financing Agreements shall be deemed and each such
reference is hereby amended to mean, as of any time, the amount equal to
$50,000,000 as reduced, automatically and without further action by any party
hereto, by an amount equal to the aggregate amount of the loans outstanding as
of such time made by Lender to Farah UK pursuant to the terms of the Financing
Agreements.
(b) Renewal Date. All references to the term "Renewal Date" in the
Financing Agreements shall be deemed and each such reference is amended to mean:
"July 1, 1997".
3. Amendment to Covenant Regarding Pre-Tax Profits. Section 2 of the
Covenant Supplement to the Accounts Agreement is hereby amended by deleting
Section 2.14 thereof in its entirety.
4. Amendment to Early Termination Fee. Section 9.2 of the Accounts
Agreement is hereby deleted in its entirety and the following substituted
therefor:
"9.2 If Lender terminates this Agreement or the other Financing Agreements upon
the occurrence of an Event of Default or, at the request of Borrowers prior to
the Renewal Date, or prior to any subsequent anniversary of the Renewal Date, in
view of the impracticability and extreme difficulty of ascertaining actual
damages and by mutual agreement of the parties as to a reasonable calculation of
Lender's lost profits as a result thereof, Farah USA and Value Clothing hereby
agree to pay to Lender, upon the effective date of such termination, an early
termination fee in an amount equal to one percent (1%) of $50,000,000; provided,
however, that in the case of a termination which occurs after July 1, 1996
resulting from the sale of either all of the issued and outstanding shares of
capital stock of Farah, Inc., Farah USA and Value Slacks or all of the assets of
Farah, Inc., Farah USA and Value Slacks after July 1, 1996 at a time when there
has not occurred an Event of Default or an event or circumstance which, with the
passage of time or giving of notice or both, would constitute an Event of
Default, the amount of the termination fee payable in regards to such
termination shall be one-half of one percent (0.5%) of $50,000,000. Such early
termination fees shall be presumed to be the amount of damages sustained by said
early termination and Borrowers agree that its is reasonable under the
circumstances currently existing. The early termination fees provided for in
this Section 9.2 shall be deemed included in the Obligations."
5. General Representations. Warranties and Covenants. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrowers and Guarantors to Lender pursuant to the Financing Agreements,
each of Borrowers and Guarantors hereby represents, warrants and covenants with
and to Lender as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):
(a) No Event of Default exists on the date of this Amendment; and
(b) This Amendment has been duly executed and delivered by Borrowers and
Guarantors and is in full force and effect as of the date hereof, and the
agreements and obligations of Borrowers and Guarantors contained herein
constitute legal, valid and binding obligations of Borrowers and Guarantors
enforceable against Borrowers and Guarantors in accordance with their respective
terms.
6. Conditions Precedent. The effectiveness of the other terms and
conditions contained herein against Lender shall be subject to the satisfaction
of each of the following:
(a) receipt by Lender of each of the following, in form and substance
satisfactory to Lender and its counsel:
(i) an original of this Amendment, duly authorized, executed and delivered
by Borrowers and Guarantors; and
(ii) such agreements from participants as may be required to effectuate the
terms and provisions of this Amendment; and
(b) all representations and warranties contained herein, in the Accounts
Agreement and in the other Financing Agreements shall be true and correct in all
respects, and
(c) no Event of Default shall have occurred and no event shall
have occurred or condition be existing which, with notice or passage of time or
both, would constitute an Event of Default.
7. General.
(a) The parties hereto acknowledge, confirm, and agree that the failure of
any of Borrowers or any of Guarantors, to comply with the covenants, conditions
and agreements contained herein or in any other agreement, document or
instrument by any of such parties at any time executed in connection herewith
shall constitute an Event of Default under the Financing Agreements.
(b) Except as modified pursuant hereto, no other changes to the Financing
Agreements are intended or implied and in all other respects the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. To the extent of conflict
between the terms of this Agreement and other Financing Agreements, the terms of
this Agreement shall control.
(c) The parties hereto shall execute and deliver such additional documents and
take such additional action as may be necessary or desirable to effectuate the
provisions and purposes of this Agreement.
FARAH U.S.A., INC.
By: /s/ Xxxxx X. Xxxxx
FARAH MANUFACTURING (U.K.) LIMITED
By: /s/ Xxxxxx X. Xxxxxx
Title: Director
VALUE CLOTHING COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
ACKNOWLEDGED AND AGREED:
FARAH INCORPORATED
FARAH INTERNATIONAL, INC.
VALUE SLACKS, INC.
FARAH MANUFACTURING SERVICES, INC.
FARAH MANUFACTURING COMPANY, INC.
FARAH MANUFACTURING COMPANY
OF NEW MEXICO, INC.
RADCO SPORTSWEAR, INC.
CORPORACION FARAH-COSTA RICA X.X.
XXXXX CLOTHING COMPANY, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxxxx
FTX, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Title: Treasurer
ACKNOWLEDGED AND AGREED:
CONGRESS FINANCIAL CORPORATION
(SOUTHWEST)
By: /s/ Xxxx Xxxxxxx, Xx.
Title: Vice President
