EXHIBIT 10.90
REVOLVING CREDIT, FACTORING
AND
SECURITY AGREEMENT
between
TARRANT APPAREL GROUP,
TAG MEX, INC.,
certain Lenders parties hereto,
and GMAC COMMERCIAL CREDIT LLC,
as Agent for Lenders
January 21, 2000
TABLE OF CONTENTS
I. DEFINITIONS............................................................1
1.1 Accounting Terms................................................1
1.2 General Terms...................................................1
1.3 Uniform Commercial Code Terms..................................14
II. ADVANCES, PAYMENT, INTEREST AND FEES.....................................15
2.1 (a) Advances..................................................15
(b) Revolving Line of Credit..................................15
2.2 Repayment of Excess Advances...................................15
2.3 Procedure for Revolving Advances Borrowing.....................15
2.4 Disbursement of Advance Proceeds...............................16
2.5 Repayment of Advances..........................................17
2.6 Statement of Account...........................................17
2.7 Letters of Credit..............................................18
2.8 Issuance of Letters of Credit..................................18
2.9 Requirements For Issuance of Letters of Credit.................18
2.10 Other Lender's Participation...................................19
2.11 Additional Payments............................................19
2.12 Absolute Obligation to Repay...................................19
2.13 Relationship to Letter of Credit Applications..................20
2.14 Relationship to Letter of Credit Supplement....................21
III. Factoring of Receivables..............................................21
3.1 Covered Sales..................................................21
3.2 Customer Credit Approval.......................................21
3.3 Purchase Price of Factored Receivables.........................21
3.4 Matured Funds..................................................21
3.5 Monthly Statement..............................................22
3.6 Chargebacks....................................................22
IV. INTEREST AND FEES........................................................22
4.1 Interest.......................................................22
4.2 Letters of Credit..............................................22
4.3 Unused Line Fee................................................24
4.4 Factor's Commission............................................24
4.5 Agent's Fee....................................................24
4.6 Reimbursement Costs............................................24
4.7 Computation of Interest and Fees...............................24
4.8 Maximum Charges................................................24
4.9 Increased Costs................................................24
4.10 Capital Adequacy...............................................25
4.11 Survival.......................................................26
TABLE OF CONTENTS
V. COLLATERAL: GENERAL TERMS................................................26
5.1 Security Interest in the Collateral............................26
5.2 Perfection of Security Interest................................26
5.3 Disposition of Collateral......................................26
5.4 Preservation of Collateral.....................................26
5.5 Ownership of Collateral........................................27
5.6 Defense of Agent's Interests...................................27
5.7 Books and Records..............................................28
5.8 Compliance with Laws...........................................28
5.9 [Intentionally Omitted]........................................28
5.10 Inspection of Premises.........................................28
5.11 Insurance......................................................28
5.12 Failure to Pay Insurance.......................................29
5.13 Payment of Taxes...............................................29
5.14 Payment of Leasehold Obligations...............................30
5.15 Receivables....................................................30
(a) Nature of Receivables.....................................30
(b) Solvency of Customers.....................................30
(c) Location of Borrower......................................30
(d) Collection of Receivables.................................30
(e) Notification of Assignment of Receivables.................31
(f) Power of Agent to Act on Borrower's Behalf................31
(g) No Liability..............................................31
(h) Establishment of Depository Accounts......................32
5.16 Inventory......................................................32
5.17 Maintenance of Equipment.......................................32
5.18 Exculpation of Liability.......................................32
5.19 Environmental Matters..........................................32
VI. REPRESENTATIONS AND WARRANTIES...........................................32
6.1 Authority......................................................33
6.2 Formation and Qualification....................................33
6.3 Survival of Representations and Warranties.....................33
6.4 Tax Returns....................................................33
6.5 Financial Statements...........................................33
6.6 Corporate Name.................................................34
6.7 Compliance.....................................................34
6.8 Solvency; No Litigation, Violation,............................34
6.9. Patents, Trademarks, Copyrights and Licenses...................35
6.10 Licenses and Permits...........................................35
6.11 Default of Indebtedness........................................35
6.12 No Default.....................................................35
6.13 No Burdensome Restrictions.....................................35
6.14 No Labor Disputes..............................................36
6.15 Margin Regulations.............................................36
6.16 Investment Company Act.........................................36
6.17 Disclosure.....................................................36
6.18 Swaps..........................................................36
6.19 Year 2000 Issue................................................36
VII. AFFIRMATIVE COVENANTS...................................................37
7.1 Payment of Fees................................................37
7.2 Conduct of Business and Maintenance of Existence and Assets....37
7.3 Violations.....................................................37
7.4 Government Receivables.........................................37
7.5 Financial Covenants............................................38
7.6 Paydown Period.................................................38
7.7 Execution of Supplemental Instruments..........................38
7.8 Payment of Indebtedness........................................38
7.9 Standards of Financial Statements..............................38
7.10 Year 2000 Issue Compliance.....................................38
VIII. NEGATIVE COVENANTS......................................................39
8.1 Merger, Consolidation, Acquisition and Sale of Assets..........39
8.2 Creation of Liens..............................................39
8.3 Guarantees.....................................................39
8.4 Investments....................................................39
8.5 Loans..........................................................40
8.6 [INTENTIONALLY OMITTED]........................................40
8.7 Dividends......................................................40
8.8 Indebtedness...................................................40
8.9 Nature of Business.............................................40
8.10 Transactions with Affiliates...................................40
8.11 Leases.........................................................40
8.12 Limitation on Losses...........................................41
8.13 Pledge of Credit...............................................41
IX. CONDITIONS PRECEDENT.....................................................41
9.1 Conditions to Initial Advance..................................41
(a) Note......................................................41
(b) Filings Registrations and Recordings......................41
(c) Corporate Proceedings of Borrower.........................41
(d) Incumbency Certificates of Borrower.......................41
(e) Legal Opinion.............................................41
(f) No Litigation.............................................42
(g) Financial Condition Opinions..............................42
(h) Collateral Examination....................................42
(i) Fees......................................................42
(j) Pro Forma Financial Statements............................43
(k) Mortgage..................................................43
(l) Intercreditor Agreement...................................43
(o) Other.....................................................43
9.2 Conditions to Each Advance.......................................43
(a) Representations and Warranties............................43
(b) No Default................................................43
(c) Maximum Advances..........................................43
(d) Borrowing Base Certificate................................43
X. INFORMATION AS TO BORROWER................................................44
10.1 Disclosure of Material Matters.................................44
10.2 Schedules......................................................44
10.3 Environmental Reports..........................................44
10.4 Litigation.....................................................45
10.5 Occurrence of Defaults, etc....................................45
10.6 Government Receivables.........................................45
10.7 Annual Financial Statements....................................45
10.8 Quarterly Financial Statements.................................46
10.9 Monthly Financial Statements...................................46
10.10 Other Reports..................................................46
10.11 Additional Information.........................................46
10.12 Projected Operating Budget.....................................46
10.13 INTENTIONALLY OMITTED..........................................47
10.14 Additional Documents...........................................47
XI. EVENTS OF DEFAULT........................................................47
XII. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT..............................48
12.1 Rights and Remedies............................................48
12.2 Majority Lenders Discretion...................................50
12.3 Setoff.........................................................50
12.4 Rights and Remedies not Exclusive..............................50
XIII. THE AGENT..............................................................50
13.1 Appointment and Authorization..................................50
13.2 Agent and Affiliates...........................................51
13.3 Action by Agent................................................51
13.4 Consultation with Experts......................................51
13.5 Liability of Agent.............................................51
13.6 Indemnification................................................51
13.7 Failure to Act.................................................52
13.8 Credit Decision................................................52
13.9 Additional Lenders.............................................52
13.10 Information to Lenders.........................................52
13.11 Payments.......................................................52
XIV. WAIVERS AND JUDICIAL PROCEEDINGS.........................................53
14.1 Waiver of Notice...............................................53
14.2 Delay..........................................................53
14.3 Jury Waiver....................................................53
XV. EFFECTIVE DATE AND TERMINATION...........................................54
15.1 Term...........................................................54
15.2 Termination....................................................54
XVI. MISCELLANEOUS...........................................................54
16.1 Governing Law..................................................54
16.2 Entire Understanding...........................................55
16.3 Amendments and Waivers.........................................55
16.4 Successors and Assigns; Participants; New Lenders..............56
16.5 Application of Payments........................................56
16.6 Indemnity......................................................56
16.7 Notice.........................................................56
16.8 Survivability..................................................57
16.9 Expenses.......................................................57
16.10 Injunctive Relief..............................................57
16.11 Joint and Several Obligations..................................57
16.12 Captions.......................................................58
16.13 Counterparts...................................................58
EXHIBITS
A Revolving Percentages
B Form or Revolving Note
C Form of Request for Advance
D Form of Borrowing Base Certificate
E Form of Compliance Certificate
F Form of Lender Assignment Agreement
G Form of Trademark Security Agreement
SCHEDULES
1.2 Outstanding Liens
5.5 Equipment and Inventory Locations
6.2 Qualifications to do Business
6.6(a) Corporate Name
6.6(b) Acquisitions
6.8 Pending Litigation
6.9(a) Trademarks
6.9(b) Trademark Disputes
6.10 Licenses/Permits
6.14 Labor Disputes
8.3 Outstanding Guarantees
8.8 Outstanding Indebtedness
9.1(f) Litigation
REVOLVING CREDIT, FACTORING
AND
SECURITY AGREEMENT
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Revolving Credit, Factoring and Security Agreement dated as of
January 21, 2000 between Tarrant Apparel Group (doing business as Fashion
Resource), a corporation organized under the laws of the State of California
("TAG"), Tag Mex, Inc., a corporation organized under the laws of the State of
California ("TMI") (TAG and TMI are individually and collectively referred to as
"Borrower"), the financial institutions that are, or may hereafter become,
parties to this Agreement (individually a "Lender" and collectively "Lenders"),
and GMAC Commercial Credit LLC, a limited liability company organized under the
laws of the State of New York, hereinafter individually referred to as "GMAC"
and a Lender, and in its capacity as agent for Lenders, the "Agent".
IN CONSIDERATION of the mutual covenants and undertakings herein
contained, Borrower and Lenders hereby agree as follows:
I. DEFINITIONS.
1.1 Accounting Terms. As used in this Agreement or any
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certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 hereof or elsewhere in
this Agreement and accounting terms partly defined in Section 1.2 hereof to the
extent not defined, shall have the respective meanings given to them under GAAP
(as defined below).
1.2 General Terms. For purposes of this Agreement the
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following terms shall have the following meanings:
"Advances" shall mean and include the Revolving Advances and
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Letters of Credit, as provided under Article II hereof.
"Affiliate" of any Person shall mean (a) any Person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with such Person, or (b) any Person who is a director or officer (i) of
such Person, (ii) of any Subsidiary of such Person or (iii) of any Person
described in clause (a) above. For purposes of this definition, control of a
Person shall mean the power, direct or indirect, (x) to vote fifty percent (50%)
or more of the securities having ordinary voting power for the election of
directors of such Person, or (y) to
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direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agent" means GMAC in its capacity as agent for the ratable
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benefit of itself and the other Lenders as may from time to time become parties
hereto and any successors to GMAC in the capacity as agent.
"Alternate Base Rate" shall mean, for any date and with
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respect to all Base Rate Advances, a fluctuating rate per annum equal to the
higher of (i) the Prime Rate in effect on such day or (ii) the Federal Funds
Rate in effect on such day plus one-half percent (1/2 of 1%).
"Applicable LIBOR Rate Margin" means, with respect to any
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LIBOR Rate Advance, the applicable per annum percentage set forth below opposite
the Total Leverage Ratio, as determined in accordance with the Compliance
Certificate most recently delivered pursuant to Section 10.8 hereof:
Applicable LIBOR Rate
Margin for LIBOR Rate
Total Leverage Ratio Advances
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greater than 1.0:1.0 1.50%
between .75:1.0- 1:0:1.0 1.25%
less than .75:1.0 1.00%
Any reduction or increase in the Applicable LIBOR Rate Margin shall be effective
beginning on the date that is three (3) days following the date on which Agent
receives Borrower's Compliance Certificate pursuant to Section 10.8 hereof. At
such time as TAG receives a senior debt rating from a recognized rating agency
acceptable to Agent of BBB or better, the Applicable LIBOR Rate Margin shall be
adjusted to the then current market rates as determined by Lenders in their
credit judgment. In the event Borrower does not timely deliver a Compliance
Certificate pursuant to Section 10.8 below, in addition to any rights and
remedies Lenders may have against Borrower as a result of its failure to provide
such Compliance Certificate, the "Applicable LIBOR Rate Margin" shall be deemed
to be 1.50% from the date such Compliance Certificate was due until the third
day following the receipt thereof by the Agent, at which date the "Applicable
LIBOR Rate Margin" shall be established pursuant to the grid set forth above.
"Base Rate Advance" shall mean each Revolving Advance bearing
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interest at the Alternate Base Rate.
"BNY" shall mean The Bank of New York.
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"Borrower" is defined in the preamble.
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"Borrowing Base" means the sum of:
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(a) ninety percent (90%) of the Factor Payments Due minus
amounts payable to The Hong Kong and Shanghai Banking Corporation; plus
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(b) ninety percent (90%) of the balance due on Eligible
Receivables; plus
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(c) the lesser of (i) fifty percent (50%) of the value of
Eligible Inventory located in the United States of America or (ii) $25,000,000;
plus
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(d) fifty percent (50%) of the value of Eligible Inventory
which is in transit and is covered by a commercial letter of credit issued by
the Issuer; plus
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(e) the Overadvance Limit.
"Borrowing Base Certificate" shall have the meaning set forth
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in Section 9.2(d)hereof.
"Business Day" shall mean any day other than a day on which
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commercial banks in New York, New York or Los Angeles, California are authorized
or required by law to close.
"Cash Interest Expense" shall mean total cash interest expense
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paid or payable by Borrower for monies borrowed from any Person.
"CERCLA" shall mean the Comprehensive Environmental Response,
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Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq.
"Charges" shall mean all taxes, charges, fees, imposts, levies
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or other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation
and property taxes, custom duties, fees, assessments, Liens, Claims and charges
of any kind whatsoever, together with any interest and any penalties, additions
to tax or additional amounts, imposed by any taxing or other authority, domestic
or foreign (including, without limitation, the Pension Benefit Guaranty
Corporation or any environmental agency or superfund), upon the Collateral,
Borrower or any of its Affiliates.
"Claims" shall mean all security interests, Liens, claims or
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encumbrances held or asserted by any Person against any or all of the
Collateral, other than (A) Charges and (B) Permitted Encumbrances.
"Closing Date" shall mean January ___, 2000 or such other date
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as may be agreed to by the parties hereto.
"Collateral" shall mean:
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(a) all Receivables;
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(b) all General Intangibles;
(c) all Inventory;
(d) all of Borrower's right, title and interest in and
to (i) its goods and other property including, but not limited to all
merchandise returned or rejected by Customers, relating to or securing any of
the Receivables; (ii) all of Borrower's rights as a consignor, a consignee, an
unpaid vendor, mechanic, artisan, or other lienor, including stoppage in
transit, set off, detinue, replevin, reclamation and repurchase; (iii) all
additional amounts due to Borrower from any Customer relating to the
Receivables; (iv) other property, including warranty claims relating to any
goods securing this Agreement; (v) if and when obtained by Borrower, all real
and personal property of third parties in which Borrower has been granted a lien
or security interest as security for the payment or enforcement of Receivables;
and (vi) any other goods, personal property or real property now owned or
hereafter acquired in which Borrower has expressly granted a security interest
or may in the future grant a security interest to Agent for the benefit of
Secured Parties hereunder, or in any amendment or supplement hereto, or under
any other agreement between Agent, Lenders and Borrower relating hereto;
(e) all of Borrower's ledger sheets, ledger cards,
files, correspondence, records, books of account, business papers, computers,
computer software (owned by Borrower or in which it has an interest or is
capable of granting a security interest), computer programs, tapes, disks and
documents relating to clauses (a), (b), (c) or (d) of this Paragraph; and
(f) all proceeds and products of clauses (a), (b), (c),
(d) and (e), in whatever form, including, but not limited to: cash, deposit
accounts (whether or not comprised solely of proceeds), certificates of deposit,
insurance proceeds (including hazard, flood and credit insurance), negotiable
instruments (including amounts due from Factor)and other instruments for the
payment of money, chattel paper, security agreements or documents, if any, as
applicable.
"Commercial Letter of Credit" shall mean a Letter of Credit,
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other than a Standby Letter of Credit, used in connection with the purchase of
Inventory and/or equipment by Borrower, under which drafts could be payable at
sight or up to one hundred eighty (180) days sight.
"Compliance Certificate" shall have the meaning set forth in
----------------------
Section 10.8 hereof.
"Credit Risk" shall mean, with respect to each Factored
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Receivable, the risk of loss resulting solely and exclusively from the financial
inability of Customer to pay at maturity a Receivable purchased by Factor
hereunder.
"Customer" shall mean the account debtor with respect to any
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of the Receivables, or the prospective purchaser of goods, services or both with
respect to any contract or other arrangement with Borrower, pursuant to which
Borrower is to deliver any personal property or perform any services.
"Default Rate" shall have the meaning set forth in Section 4.1
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hereof.
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"Delinquent Bank" shall have the meaning set forth in Section
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13.11 (c).
"Depository Accounts" shall have the meaning set forth in
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Section 5.15(h) hereof.
"Dilution of Receivables" shall mean the average deficiency
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from the net amount invoiced to account debtors of Borrower on Receivables to
the amount collected on such Receivables. The Dilution of Receivables shall be
calculated, on an averaged basis, for the most recent three- (3) month period of
time then concluded, and shall be computed monthly, commencing with the month
ending January 31, 2000.
"Dispute" shall mean any cause for non-payment of Receivables,
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including, without limitation, any alleged defense, counterclaim, offset,
dispute or other claim whether arising from or relating to the sale of goods or
rendition of services or arising from or relating to any other transaction or
occurrence, including, without limitation any Customer Year 2000 Issue, except
for the Customer's financial inability to pay a Receivable at maturity.
"Documents" shall have the meaning set forth in Section 9.1(c)
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hereof.
"Dollar" and the sign "$" shall mean lawful money of the
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United States of America.
"EBITDA" means the sum of Borrower's net income before taxes
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plus interest expense, depreciation, depletion, amortization and other non-cash
charges.
"Eligible Inventory" shall mean Inventory, excluding work in
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process, located in the United States of America or in transit thereto or
therefrom, valued at the lower of cost or market value, determined on a
first-in-first-out basis, which is, (i) not obsolete, slow moving or
unmerchantable, (ii) subject to a perfected, first priority security interest in
favor of Agent for the benefit of Secured Parties, (iii) in conformity to all
standards imposed by any governmental agency, division or department thereof
which has regulatory authority over such goods or the use or sale thereof, and
(iv) not imported from Tarrant Company, Ltd. Inventory shall be deemed to be
slow moving and, therefore, shall not qualify as Eligible Inventory in the event
it does not turn within ninety (90) days of the date of delivery to Borrower (or
within one hundred eighty (180) days, if covered by a purchase order acceptable
to Agent). Eligible Inventory shall include all Inventory in-transit for which
title has passed to Borrower (except for Inventory that does not otherwise
qualify as Eligible Inventory), which is insured to the full value thereof and
for which Agent shall have in its possession (a) all negotiable bills of lading
properly endorsed (including, without limitation, those in the possession of
Issuer), (b) all non-negotiable bills of lading issued in Agent's name and (c) a
letter of credit covering such Inventory, issued by a financial institution and
in an amount acceptable to Agent, naming Agent as beneficiary of such letter of
credit.
"Eligible Receivables" shall mean each Receivable (other than
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Factored Receivables, as well as Factored Receivables which have at any time
been charged back by Factor under Section 3.6 hereof) arising in the ordinary
course of Borrower's business, except that no Receivable shall be an Eligible
Receivable if:
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(a) it arises out of a sale made by Borrower to an
Affiliate of Borrower or to a Person controlled by an Affiliate of Borrower;
(b) it is due or unpaid more than sixty (60) days after
the original due date or more than ninety (90) days from its invoice date;
(c) fifty percent (50%) or more of the Receivables from
the account debtor are not otherwise deemed Eligible Receivables hereunder;
(d) any covenant, representation or warranty contained
in this Agreement with respect to such Receivable has been breached;
(e) the account debtor is also Borrower's creditor or
supplier (but only to the extent of the amount due and owing by Borrower to such
account debtor), or the account debtor has disputed or made any claim with
respect to such Receivable due from such account debtor to Borrower, or the
Receivable otherwise is or may become subject to any right of setoff by the
account debtor (but only to the extent of the amount of such disputed liability
or claim);
(f) the account debtor has commenced a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter amended, or
made an assignment for the benefit of creditors, or if a decree or order for
relief has been entered by a court having jurisdiction in the premises in
respect of the account debtor in an involuntary case under any state or federal
bankruptcy laws, as now constituted or hereafter amended, or if any other
petition or other application for relief under any state or federal bankruptcy
law has been filed against the account debtor, or if the account debtor has
failed, suspended business, ceased to be solvent, called a meeting of its
creditors, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs;
(g) the sale is to an account debtor outside the
continental United States, unless the sale is on letter of credit, guaranty or
acceptance terms, in each case acceptable to Agent in its reasonable credit
judgment;
(h) the sale to the account debtor is on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase, return or contingent basis or is evidenced by chattel
paper;
(i) Except as to account debtors with a senior debt
rating of BBB or its equivalent, or better from a recognized rating agency
acceptable to Agent and provided no downgrade of rating below BBB or its
equivalent is threatened or pending, Agent believes, in its credit judgment,
that collection of such Receivable is insecure, or that such Receivable may not
be paid by reason of the account debtor's financial inability to pay; provided,
however, no Receivable previously included as an Eligible Receivable shall be
declared ineligible by this clause (i);
(j) the account debtor is the United States of America,
any state, or any department, agency or instrumentality of any of them, unless
Borrower assigns its right to payment of such Receivable to Agent pursuant to
the Assignment of Claims Act of 1940,
6
as amended (31 U.S.C. Section 3727, et seq. and 41 U.S.C. Section 15, et seq.),
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or has otherwise complied with other applicable statutes or ordinances;
(k) the goods giving rise to such Receivable have not
been shipped and delivered to and accepted by the account debtor or the services
giving rise to such Receivable have not been performed by Borrower and accepted
by the account debtor or the Receivable otherwise does not represent a final
sale;
(l) Except as to account debtors with a senior debt
rating of BBB, or its equivalent, or better from a recognized rating agency
acceptable to Agent, and provided no downgrade of rating below BBB or its
equivalent is threatened or pending, the Receivables of the account debtor
exceed a credit limit determined by Agent, in its sole credit judgment, to the
extent such Receivable exceeds such limit;
(m) the Receivable is subject to any material offset,
deduction, defense, dispute, or counterclaim;
(n) Borrower has made any agreement with any account
debtor for any deduction therefrom, except for discounts or allowances made in
the ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;
(o) any return, rejection or repossession of the
merchandise has occurred;
(p) such Receivable is not payable to Borrower;
(q) such Receivable is not subject to a first priority
perfected security interest in favor of Agent for the benefit of Secured Parties
and no other Lien other than Permitted Encumbrances; or
(r) such Receivable is not evidenced by an invoice or
other documentary evidence reasonably satisfactory to Agent.
"Environmental Laws" shall mean all environmental, land use,
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zoning, and chemical use, statutes, ordinances and codes of the United States of
America, any state of the United States of America, and any locality thereof,
relating to the protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Substances and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives of federal, state
and local governmental agencies and authorities with respect thereto.
"Event of Default" shall mean the occurrence of any of the
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events set forth in Article XI hereof.
"Factor" means GMAC.
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"Factor Payments Due" shall mean at any date all amounts
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payable by Factor to Borrower pursuant to Section 3.3 of this Agreement as of
such date.
"Factored Receivables" means Receivables purchased by Factor
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from Borrower, which Receivables have been credit approved by Factor pursuant to
Section 3.2 hereof:
(a) with respect to which no Claim or Dispute exists between
Borrower and account debtor relating to returns, rejections or losses of
merchandise;
(b) that is not the obligation of an account debtor located in
a foreign country;
(c) that is otherwise acceptable to Factor.
"Factored Receivables Payment Date" shall mean, for any
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Receivable purchased by Factor, two (2) Business Days after the date on which
the applicable Receivable is actually collected by Factor.
"Federal Funds Rate" shall mean, for any day, the weighted
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average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day, the average of quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by Agent.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i)
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EBITDA to (ii) the sum of Cash Interest Expense, plus scheduled principal
payments on Indebtedness plus cash expenses for capital expenditures and taxes.
This ratio will be calculated at the end of each fiscal quarter, using results
of that quarter and each of the three (3) immediately preceding quarters.
"Funded Debt" means, on any date of determination, the sum of
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the aggregate outstanding amount of Indebtedness for borrowed money, including
current and long-term Indebtedness, but not to include accounts payable of
Borrower.
"GAAP" shall mean generally accepted accounting principles in
----
the United States of America in effect from time to time.
"General Intangibles" shall mean all of Borrower's general
-------------------
intangibles, whether now owned or hereafter acquired including, without
limitation, all choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trademarks,
trade names, trade secrets, goodwill, copyrights, registrations, licenses,
franchises, customer lists, tax refunds, tax refund claims, computer programs,
(but only those in which a security interest may be taken), all claims under
guaranties, security interests or other security held by or granted to Borrower
to secure payment of any of the Receivables by an account
8
debtor, all rights of indemnification and all other intangible property of every
kind and nature (other than Receivables) and all rights of Borrower to the
payment of monies from Factor hereunder.
"Hazardous Substance" shall mean, without limitation, any
-------------------
flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated byphenyls, petroleum and petroleum products,
methane, hazardous wastes, hazardous or toxic substances or related materials as
defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49
U.S.C. Section 1801, et seq.), or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.
"Hazardous Wastes" includes all waste materials subject to
----------------
regulation under CERCLA, or applicable state law, and any other applicable
Federal and state laws now in force or hereafter enacted relating to hazardous
waste disposal.
"Indebtedness" of a Person at a particular date shall mean all
------------
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the
required prepayment dates of such indebtedness, and all indebtedness secured by
a Lien on assets owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any indebtedness of
such Person resulting from the acquisition by such Person of any assets subject
to any Lien shall be deemed, for the purposes hereof, to be the equivalent of
the creation, assumption and incurring of the indebtedness secured thereby,
whether or not actually so created, assumed or incurred.
"Indemnity Letters" shall mean those certain indemnity letters
-----------------
of even date herewith between Agent and The CIT Group/Commercial Services and
Finova Capital Corporation.
"Interest Coverage Ratio" shall mean the ratio of (i) EBITDA
-----------------------
to (ii) Cash Interest Expense. This ratio will be calculated at the end of each
fiscal quarter, using results of that quarter and each of the three (3)
immediately preceding quarters.
"Inventory" shall mean all of Borrower's now owned or
---------
hereafter acquired goods, merchandise and other personal property, wherever
located, to be furnished under any contract of service or held for sale or
lease, all raw materials, work in process, finished goods and materials and
supplies of any kind, nature or description which are or might be used or
consumed in Borrower's business or used in selling or furnishing such goods,
merchandise and other personal property, and all documents of title or other
documents representing them.
"Issuer" means BNY in its capacity as issuer of the Letters of
------
Credit, or any replacement therefor agreed upon by Borrower and Majority
Lenders. Provided, however, that Borrower may, at its election, designate Sanwa
to issue Letters of Credit and if Sanwa agrees
9
to do so, and agrees to issue the Letters of Credit pursuant to the terms and
condition of this Agreement, then Sanwa shall be Issuer.
"Lender Assignment Agreement" shall mean any Lender Assignment
---------------------------
Agreement, substantially in the form of Exhibit F hereto, delivered pursuant to
Section 13.9 hereof.
"Lenders" is defined in the preamble.
-------
"Letter of Credit" shall mean any letter of credit (whether a
----------------
Commercial Letter of Credit, or a Usance Letter of Credit, or a Standby Letter
of Credit) issued by Issuer pursuant to Section 2.7 hereof.
"Letter of Credit Application" shall have the meaning given
----------------------------
such term in Section 2.8(a) below.
"Letter of Credit Commitment" means with respect to Issuer,
---------------------------
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1 hereof
and, with respect to each Lender, the obligations of such Lender to participate
in such Letters of Credit pursuant to Section 2.10 hereof.
"Letter of Credit Fees" shall have the meaning set forth in
---------------------
Section 4.2.
"Letter of Credit Supplement" means that certain letter
---------------------------
agreement of even date herewith between Borrower and GMAC relating to the
issuance of Letters of Credit.
"LIBOR Rate" means the rate of interest equal to the rate per
----------
annum published in The Wall Street Journal (West Coast Edition), for London
Interbank Offered Rates (LIBOR) for a term of one (1) month, averaged and
calculated monthly. The Wall Street Journal LIBOR Rate is announced or published
in the Money Rates Section of The Wall Street Journal from time to time. The
LIBOR Rate shall change whenever The Wall Street Journal LIBOR Rate for a term
of one (1) month changes. If The Wall Street Journal LIBOR Rate becomes
unavailable during the term of this Agreement, Agent may designate a reasonable
substitute index after written notice to Borrower.
"LIBOR Rate Advance" means any Revolving Advance bearing
------------------
interest at the LIBOR Rate plus any Applicable LIBOR Rate Margin.
"Lien" shall mean any mortgage, deed of trust, pledge,
----
hypothecation, assignment, security interest, lien, charge, Claim or
encumbrance, or preference, priority or other security agreement or preferential
arrangement in respect of any asset of Borrower of any kind or nature whatsoever
including, without limitation, any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction.
10
"Line Year" means the period from the date of this Agreement
---------
through December 31, 2000, and each subsequent calendar year thereafter.
"Majority Lenders" shall mean, at any time, Lenders (other
----------------
than Delinquent Banks) whose proportionate interests in the Advances constitute
at least sixty-six and two thirds percent(66 2/3%).
"Matured Funds Rate" shall mean the rate of interest,
------------------
announced by Factor from time to time, as the rate applicable to matured funds,
such rate to be adjusted automatically on the effective date of any change in
such rate as announced by Factor.
"Maturity Date" shall mean January 31, 2005.
-------------
"Maximum Credit Amount" shall mean $105,000,000.
---------------------
"Mortgage" shall mean that certain mortgage duly executed by
--------
Mortgagor, in favor of Agent, as Mortgagee, in form and substance reasonably
acceptable to Agent, granting to Agent, for the benefit of Secured Parties, a
security interest in certain real property described as Xxxx 0, 0, 0, X00 Xxxxx
X, Xxxxxxx 6, Parque Industrial Puebla 2000, C.P. 72220, Mexico.
"Mortgagor" shall mean Tarrant Mexico, S. De X.X. De C.V.
---------
("TMX").
"Notes" shall mean, individually and collectively, the
-----
Revolving Notes.
"Obligations" shall mean any and all of Borrower's
-----------
Indebtedness or liabilities to Secured Parties hereunder and under the Notes and
Other Documents, of every kind, nature and description, direct or indirect,
secured or unsecured, joint, several, joint and several, absolute or contingent,
due or to become due, now existing or hereafter arising, contractual or
tortious, liquidated or unliquidated, regardless of how such indebtedness or
liabilities arise.
"Other Documents" shall mean the Questionnaire and any and all
---------------
other agreements, instruments and documents, including, without limitation,
guaranties, pledges, powers of attorney, consents, and all other writings
heretofore, now or hereafter executed by Borrower and/or delivered to Agent or
any Secured Party in respect of the transactions contemplated by this Agreement.
"Overadvance Limit" means the amount of Twenty Five Million
-----------------
Dollars ($25,000,000).
"Parent" of any Person shall mean a corporation or other
------
entity owning, directly or indirectly, more than fifty percent (50%) of the
shares of stock or other ownership interests having ordinary voting power to
elect a majority of the directors of the Person, or other Persons performing
similar functions for any such Person.
11
"Payment Office" shall mean initially, the office of Agent
--------------
located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; thereafter,
such other office of Agent, if any, which it may designate by notice to Borrower
to be the Payment Office.
"Permitted Encumbrances" shall mean (a) Liens in favor of
----------------------
Agent for the benefit of Secured Parties; (b) Liens for taxes, assessments or
other governmental charges not delinquent, or, being contested in good faith and
by appropriate proceedings and with respect to which proper reserves have been
taken by Borrower; (c) Liens disclosed in the financial statements referred to
in Section 6.5, the existence of which Agent has consented to in writing but
which Liens shall, to the extent affecting the Collateral, be junior and
subordinate to the Lien in favor of Agent for the benefit of Secured Parties
hereunder; (d) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under unemployment insurance;
(e) deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the ordinary course of
Borrower's business; (f) judgment Liens that have been stayed or bonded and
mechanics', workers', materialmen's or other like Liens arising in the ordinary
course of Borrower's business with respect to obligations which are not due or
which are being contested in good faith by Borrower; (g) Liens placed upon fixed
assets hereafter acquired to secure a portion of the purchase price thereof,
provided that any such Lien shall not encumber any other property of Borrower;
(h) other Liens incidental to the conduct of Borrower's business or the
ownership of its property and assets which were not incurred in connection with
the borrowing of money or the obtaining of advances or credit, and which do not
in the aggregate materially detract from Agent's rights in and to the Collateral
or the value of Borrower's property or assets or which do not materially impair
the use thereof in the operation of Borrower's business; and (i) Liens disclosed
on Schedule 1.2.
"Person" shall mean an individual, a partnership, a
------
corporation, a limited liability company, a business trust, a joint stock
company, a trust, an unincorporated association, a joint venture, a governmental
authority or any other entity of whatever nature.
"Prime Rate" for the purpose of this Agreement means the rate
----------
of interest publicly announced from time to time by BNY at its principal office
in New York as its prime rate or prime lending rate. This rate of interest is
determined from time to time by BNY as a means of pricing some loans to its
customers and is neither tied to any external rate of interest or index nor does
it necessarily reflect the lowest rate of interest actually charged by BNY to
any particular class or category of customers of BNY.
"Principal Owners" means any or all of Xxxxxx Xxxx, members of
----------------
his immediate family and any trust created by Xxxxxx Xxxx for estate planning
purposes.
"Prospective Event of Default" shall mean an event which, with
----------------------------
the giving of notice or passage of time or both, would constitute an Event of
Default.
"Questionnaire" shall mean the Questionnaire executed by
-------------
Borrower and delivered to Agent.
12
"Receivables" shall mean all of Borrower's accounts, contract
-----------
rights, instruments, documents, chattel paper, general intangibles relating to
accounts, drafts and acceptances, and all other forms of obligations owing to
Borrower arising out of or in connection with the sale or lease of Inventory or
the rendition of services, all guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created.
"Request for Advance" shall mean a Request for Advance
-------------------
substantially in the form of Exhibit C hereto.
"Revolving Advances" shall mean Advances made other than
------------------
Letters of Credit.
"Revolving Note" means a promissory note of Borrower payable
--------------
to each Lender, substantially in the form of Exhibit B hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of Borrower to such Lender
resulting from outstanding Advances, and also means all other promissory notes
acceptable from time to time in substitution therefor or renewal thereof.
"Revolving Percentage" means relative to any Lender, the
--------------------
percentage set forth opposite the name of such Lender in Exhibit A hereto or set
forth in the then most recent Lender Assignment Agreement executed by such
Lender, as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its assignee Lender(s) and
delivered pursuant to Section 13.9 hereof.
"Sanction/Embargo Programs" shall mean economic and other
-------------------------
sanctions and embargo program restrictions promulgated by the government of the
United States of America or any officer or agency thereof including but not
limited to the President and the Office of Foreign Assets Control of the
Treasury Department, or either of them.
"Sanwa" shall mean Sanwa Bank California, a California banking
-----
corporation.
"Secured Parties" shall mean, collectively and severally,
---------------
Agent acting in its capacity as such hereunder, Factor acting in its capacity as
such hereunder, the Lenders acting in their capacities as such hereunder and
Issuer acting in its capacity as such hereunder.
"Standby Letter of Credit" shall mean a Letter of Credit,
------------------------
other than a Commercial Letter of Credit, given to provide assurances of payment
or performance.
"Subsidiary" of any Person shall mean a corporation or other
----------
entity of whose shares of stock or other ownership interests having ordinary
voting power (other than stock or other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the
directors of such corporation, or other Persons performing similar functions for
such entity, are owned, directly or indirectly, by such Person.
13
"Tangible Net Worth" means the gross book value of Borrower's
------------------
assets (excluding goodwill, patents, trademarks, trade names, organization
expense, unamortized debt discount and expense, capitalized or deferred research
and development costs, deferred marketing expenses, deferred receivables, and
other like intangibles, and monies due from Affiliates, officers, directors,
employees, or shareholders, of Borrower) less Total Liabilities, including but
not limited to accrued and deferred income taxes, and any reserves against
assets.
"Total Leverage Ratio" means the ratio of Total Liabilities to
--------------------
Tangible Net Worth. This ratio will be calculated at the end of each fiscal
quarter.
"Total Liabilities" means the sum of current liabilities plus
-----------------
long term liabilities.
"Toxic Substance" shall mean any material present on real
---------------
property or leasehold interests in real property in the United States of America
which have been shown to have significant adverse effect on human health or
which is subject to regulation under the Toxic Substances Control Act (TSCA), 15
U.S.C. Section 2601, et seq., applicable state law, or any other applicable
------
Federal or state laws now in force or hereafter enacted, relating to toxic
substances. "Toxic Substance" includes but is not limited to asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints.
"Trademark Security Agreement" shall mean the Trademark
----------------------------
Security Agreement, in substantially the form of Exhibit G, executed and
delivered by Borrower in favor of Agent.
"Usance Draft" shall mean any draft, other than a draft
------------
payable at sight, drawn under a Commercial Letter of Credit and accepted by the
Issuer.
"Usance Letter of Credit" shall mean a Commercial Letter of
-----------------------
Credit under which the drafts are payable other than at sight.
"Year 2000 Issue" shall mean the inability of computer
---------------
software, hardware and firmware systems and/or equipment containing embedded
computer chips owned or operated by a Person or used or relied upon in the
conduct of a Person's business (including systems and equipment supplied by
others or with which such Person's computer systems interface) to properly
receive, transmit, process, manipulate, store, retrieve, re-transmit, without
errors or delays, or in any other way to accurately recognize or otherwise
utilize data and information in all respects in relation to the year 2000.
1.3 Uniform Commercial Code Terms. All terms used herein and
-----------------------------
defined in the Uniform Commercial Code as adopted in the State of California
shall have the meaning given therein unless otherwise defined herein.
14
II. ADVANCES, PAYMENT, INTEREST AND FEES.
------------------------------------
2.1 (a) Advances. Subject to the terms and conditions set
--------
forth in this Agreement, each Lender will make Advances to Borrower, to the
extent of its Revolving Percentage, in aggregate amounts outstanding at any time
equal to the lesser of (x) the Maximum Credit Amount or (y)the Borrowing Base.
(b) Revolving Line of Credit. This is a revolving line
------------------------
of credit providing for Revolving Advances and Letters of Credit. Issuer will
issue Letters of Credit pursuant to Section 2.7 hereof and each Lender agrees
that it will participate in such Letters of Credit in accordance with Section
2.10 hereof.
2.2 Repayment of Excess Advances. Borrower agrees not to
----------------------------
permit the outstanding principal balance of Revolving Advances plus the
outstanding amounts of any Letters of Credit, including amounts drawn on Letters
of Credit and not yet reimbursed, plus amounts that are or may become payable
to The CIT Group/Commercial Services and Finova Capital Corporation pursuant to
the Indemnity Letters to exceed the lesser of (x) the Maximum Credit Amount or
(y) the Borrowing Base. If Borrower exceeds this limit, Borrower will
immediately pay the excess to Agent. In the event such excess amount remains
outstanding for five (5) or more Business Days in any month during the term of
this Agreement, the average daily balance of the Obligations in that month shall
bear interest at a rate equal to one-half of one percent (0.50%) per annum in
excess of the interest rate then in effect. The imposition and payment of the
increased charges stated above shall not constitute a waiver of Lenders' rights
with respect to Borrower's failure to immediately pay such excess amount when
due.
2.3 Procedure for Revolving Advances Borrowing.
------------------------------------------
(a) The Revolving Advances made by each Lender shall be
evidenced by a Revolving Note payable to the order of such Lender.
(b) Each Lender shall endorse on the schedules annexed
to its Revolving Note, the date, amount and maturity of each Revolving Advance
made by it and the amount of each payment of principal made by Borrower with
respect thereto. Each Lender is irrevocably authorized by Borrower to endorse
its Revolving Note and each Lender's record shall be rebuttably correct and
binding on Borrower in the absence of a manifest error; provided, however, that
the failure of a Lender to make, or an error in making a notation thereon with
respect to any Revolving Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under any such Note to such Lender.
(c) Borrower shall give Agent notice in the form of a
Request for Advance prior to 5:00 p.m. (New York Time) on a Business Day of its
request to incur, on the following Business Day, a Revolving Advance hereunder.
Should any amount required to be paid as interest hereunder, or as fees or other
charges under this Agreement, or with respect to any other Obligation, become
due, the same shall be deemed a request for a Revolving Advance as of the date
such payment is due, in the amount required to pay in full such interest, fee,
charge or Obligation under this Agreement, and such request shall be
irrevocable.
15
(d) Upon receipt of the Request for Advance, Agent shall
promptly notify each Lender of the contents thereof and of such Lender's
Revolving Percentage of the Advance specified therein and such Request for
Advance shall not thereafter be revocable by Borrower.
(e) Not later than 1:00 p.m. (New York Time) on the date
of the Advance, each Lender shall make available its Revolving Percentage of the
Advance, in Federal or other funds immediately available to Agent at its Payment
Office or at such other address as Agent may hereafter designate by notice to
Borrower and Lenders and, unless Agent determines that any applicable condition
specified in Article IX has not been satisfied, Agent will promptly make the
funds so received from Lenders available to Borrower as provided in Section 2.4
hereof.
(f) Subject to Article IX, unless Agent shall have
received notice from a Lender prior to the date of any Advance that such Lender
will not make available to Agent such Lender's Revolving Percentage of such
Advance, Agent may assume that such Lender has made such Revolving Percentage
available to Agent on the date of such Advance in accordance with subsection (e)
of this Section and Agent may, in reliance upon such assumption, make available
to Borrower on such date a corresponding amount. If and to the extent such
Lender shall not have so made such Revolving Percentage available to Agent, such
Lender and (without waiving any claim of Borrower against such Lender) Borrower
severally agree to repay Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is repaid to Agent at (i) in
the case of Borrower, a rate per annum to the interest rate then in effect for
such Advance, and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to Agent the corresponding amount, such amount so repaid
shall constitute such Lender's Revolving Percentage of the requested Advance for
purposes of this Agreement. The failure of any Lender to make available such
Lender's Revolving Percentage of any Advance shall not relieve any other Lender
of any obligation to make available on such date such other Lender's Revolving
Percentage of any Advance. Notwithstanding the foregoing, if Agent shall have
received written notice from Borrower or any Lender, or otherwise has actual
knowledge, that one or more of the applicable conditions precedent set forth in
Article IX will not be satisfied at the time of such Advance and compliance
therewith is not waived by Lenders, no Lender will have any obligation to make
such requested Advance.
2.4 Disbursement of Advance Proceeds. All Advances shall be
--------------------------------
disbursed from whichever office or other place Agent may designate from time to
time and, together with any and all other Obligations of Borrower to Secured
Parties, shall be charged to Borrower's account on each Secured Party's books.
Until the Maturity Date, unless sooner terminated as herein provided, Borrower
may use the Revolving Advances by borrowing, prepaying and reborrowing, all in
accordance with the terms and conditions hereof. The proceeds of each Revolving
Advance requested by Borrower or deemed to have been requested by Borrower under
Section 2.3(c) hereof shall, with respect to requested Revolving Advances to the
extent each Lender makes such Revolving Advances, be made available to Borrower
on the day so requested by way of credit to Borrower's operating account at
Agent as Borrower may designate following
16
notification to Agent, in immediately available Federal or other immediately
available funds or, with respect to Revolving Advances deemed to have been
requested, be disbursed to Agent on behalf of Secured Parties in payment of
outstanding Obligations.
2.5 Repayment of Advances.
---------------------
(a) The Obligations shall be due and payable in full on
the earlier of (i) the Maturity Date, (ii) prepayment in full, as herein
provided, or (iii) termination by acceleration or as otherwise provided herein.
(b) All payments of principal, interest and other
amounts payable hereunder, or under any of the related agreements shall be made
to Agent at the Payment Office not later than 11:00 a.m. (New York Time) on the
due date therefor in lawful money of the United States of America in Federal or
other funds immediately available to Agent, it being expressly agreed and
understood that if a payment is received after 11:00 a.m. (New York time) by
Agent, such payment will be considered to have been made by Borrower on the next
succeeding Business Day and interest thereon shall be payable by Borrower at the
rate otherwise applicable thereto during such extension. Agent shall have the
right to effectuate payment on any and all Obligations due and owing hereunder
by charging Borrower's account or by making Advances as provided in Sections 2.3
and 2.4 hereof.
(c) Borrower shall pay principal, interest, and all
other amounts payable hereunder, or under any related agreement, without any
deduction whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
(d) At its option, Borrower may prepay the Advances in
whole at any time or in part from time to time, provided, however, that for a
LIBOR Rate Advance Borrower shall provide Agent one (1) Business Days' prior
written notice, without premium or penalty but with interest on the principal
being prepaid to the date of such repayment provided that each partial
prepayment shall be in the minimum amount of $ 100,000 or in integral multiples
thereof.
2.6 Statement of Account. Agent and each Secured Party shall
--------------------
maintain, in accordance with their customary procedures, a loan account in the
name of Borrower in which shall be recorded the date and amount of each Advance
made by each Secured Party and the date and amount of each payment in respect
thereof; provided, however, the failure by any Secured Party to record the date
-------- -------
and amount of any Advance shall not adversely affect such Secured Party. For
each month, Agent shall send to Borrower a statement showing the accounting for
the Advances made, payments made or credited in respect thereof, and other
transactions between Secured Parties and Borrower during such month. The monthly
statements shall be deemed correct and binding upon Borrower in the absence of
manifest error and shall constitute an account stated between Secured Parties
and Borrower unless Agent receives a written statement of Borrower's specific
exceptions thereto within thirty (30) days after such statement is received by
Borrower. The records of Agent with respect to the loan account shall be prima
-----
facie evidence of the amounts of Advances and other changes thereto and of
-----
payments applicable thereto.
17
2.7 Letters of Credit. Subject to the terms and conditions
-----------------
hereof, Agent shall cause Issuer to issue Letters of Credit ("Letters of
Credit"); provided, however, that Issuer will not issue or cause to be issued
-------- -------
any Letters of Credit to the extent that the face amount of such Letters of
Credit would then cause the sum of the outstanding Revolving Advances plus
outstanding Letters of Credit plus amounts that are or may become payable to The
CIT Group/Commercial Services and Finova Capital Corporation pursuant to the
Indemnity Letters to exceed the lesser of (x) the Maximum Credit Amount or (y)
the Borrowing Base; provided, further, that the maximum amount of outstanding
-------- -------
Letters of Credit shall not exceed $20,000,000 in the aggregate at any time. All
disbursements or payments related to Letters of Credit shall be deemed to be
Revolving Advances and shall bear interest at the Alternate Base Rate from time
to time in effect; Letters of Credit that have not been drawn upon shall not
bear interest.
2.8 Issuance of Letters of Credit.
-----------------------------
(a) Pursuant to the terms of this Agreement and the
Letter of Credit Supplement, Borrower may request Agent to cause the issuance by
Issuer of a Commercial Letter of Credit or a Standby Letter of Credit by
delivering to Agent at the Payment Office, Issuer's standard forms of Letter of
Credit and Security Agreement together with Issuer's standard form of Letter of
Credit Application (collectively, the "Letter of Credit Application"), completed
to the satisfaction of Issuer; and, such other certificates, documents and other
papers and information as Issuer and Agent may reasonably request. In the event
Issuer is BNY, GMAC, not in its capacity as Agent, but in its individual
capacity, shall cause such Letters of Credit issued by BNY to be consistent with
the terms of this Agreement in all material respects.
(b) Each Letter of Credit shall, among other things, (i)
provide for the payment of sight drafts or, with respect to a Usuance Letter of
Credit, Usuance Drafts, when presented for honor thereunder in accordance with
the terms thereof and when accompanied by the documents described therein and
(ii) have an expiry date not later than one hundred eighty (180) days after such
Letter of Credit's date of issuance and in no event later than the Maturity
Date. Each Letter of Credit Application and each Letter of Credit shall be
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, and any
amendments or revisions thereof (or, in the event Issuer has elected to follow
the International Standby Practices 1998 ("ISP"), then by the ISP and any
amendments or revisions thereto), and, to the extent not inconsistent therewith,
the laws of the State of New York (provided, however, in the event Issuer is
Sanwa and Sanwa designates that the laws of the State of California shall govern
the Letter of Credit Application and Letter of Credit, Borrower hereby agrees to
such designation).
2.9 Requirements For Issuance of Letters of Credit.
----------------------------------------------
(a) Subject to the terms and conditions of the Letter of
Credit Supplement, Borrower authorizes and directs Issuer of any Letter of
Credit to name Borrower as the "Account Party" therein and to deliver to Issuer
all instruments, documents, and other writings and property received by Issuer
pursuant to the Letter of Credit or in connection with any acceptance and to
accept and rely upon Issuer's instructions and agreements with respect to
18
all matters arising in connection with the Letter of Credit, the application
therefor or any acceptance therefor.
(b) In connection with all Letters of Credit issued or
created by Issuer under this Agreement, Borrower hereby appoints Issuer, or its
designee, as its attorney, with full power and authority at any time following
the occurrence of an Event of Default (i) to sign and/or endorse Borrower's name
upon any warehouse or other receipts, letter of credit applications and
acceptances; (ii) to sign Borrower's name on bills of lading; (iii) to clear
Inventory through Customs in the name of Borrower or Issuer or Issuer's
designee, and to sign and deliver to Customs Officials powers of attorney in the
name of Borrower for such purpose; and (iv) to complete in Borrower's or
Issuer's name, or in the name of Issuer's designee, any order, sale or
transaction, obtain the necessary documents in connection therewith, and collect
the proceeds thereof. Neither Issuer nor its attorneys will be liable for any
acts or omissions nor for any error of judgment or mistakes of fact or law,
except for Issuer's or its attorney's willful misconduct or gross negligence.
This power, being coupled with an interest, is irrevocable as long as any
Letters of Credit remain outstanding.
2.10 Other Lender's Participation. Upon the issuance of each
----------------------------
Letter of Credit issued by Issuer pursuant hereto, and without further action,
each Lender shall be deemed to have irrevocably purchased to the extent of its
Revolving Percentage, a participation interest in such Letter of Credit
(including any reimbursement obligation with respect thereto). Lenders hereby
absolutely and unconditionally (including, without limitation, following the
occurrence of an Event of Default) agree to purchase and sell among themselves
the dollar amount of any drawing under any Letter of Credit which is not paid on
the date when due by Borrower so that each unrepaid drawing shall be held and
participated in by Lenders in accordance with their respective Revolving
Percentage and to reimburse Agent, in accordance with their respective Revolving
Percentages, for any payment made by Agent or GMAC to Issuer for any drawing
under a Letter of Credit not paid by Borrower.
2.11 Additional Payments. Any sums expended by GMAC,
-------------------
individually or as Agent and by Secured Parties due to Borrower's failure to
perform or comply with its Obligations under this Agreement and any of the Other
Documents, including without limitation, the Letter of Credit Supplement and the
Indemnity Letters, may be charged to Borrower's account as a Revolving Advance
and added to the Obligations.
2.12 Absolute Obligation to Repay. Borrower's obligation to
----------------------------
repay drawings under any Letter of Credit (including its reimbursement
obligations to GMAC pursuant to the Letter of Credit Supplement) and to
reimburse Agent for payments made by Agent under the Indemnity Letters shall be
absolute, irrevocable and unconditional under any and all circumstances
whatsoever and irrespective of any setoff, counterclaim or defense to payment
which Borrower may have or have had, against Issuer, any Lender or any other
Person, including, without limitation, any setoff, counterclaim or defense based
upon or arising out of:
(i) Any lack of validity or enforceability of this
Agreement, the Letter of Credit Supplement, the Indemnity Letters or any
of the Other Documents;
19
(ii) Any amendment or waiver of or any consent to
departure from the terms of any Letter of Credit or any letters of credit
or other documents identified in the Indemnity Letters;
(iii) the existence of any claim, setoff, defense or
other right which Borrower or any other Person may have at any time
against any beneficiary or any transferee of any Letter of Credit or any
letters of credit or other documents identified in the Indemnity Letters
(or any Person for whom any such beneficiary or any such transferee may be
acting);
(iv) Any allegation that any demand, statement or any
other document presented under any Letter of Credit or any letters of
credit or other documents identified in the Indemnity Letters is forged,
fraudulent, invalid or insufficient in any respect, or that any statement
there is untrue or inaccurate in any respect whatsoever or that variations
in punctuation, capitalization, spelling or format were contained in the
drafts or any statements presented in connection with any drawing under a
Letter of Credit or any letters of credit or other documents identified in
the Indemnity Letters;
(v) Any payment by Issuer under any Letter of Credit
or any letters of credit or other documents identified in the Indemnity
Letters against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit, or any payment
made by Issuer under any Letter of Credit or any letters of credit or
other documents identified in the Indemnity Letters to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of any Letter of
Credit or any letters of credit or other documents identified in the
Indemnity Letters, including any arising in connection with any insolvency
proceeding;
(vi) Any exchange, release or non-perfection of any
Collateral; or
(vii) Any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of Borrower.
Nothing contained herein shall constitute a waiver of any rights of Borrower to
proceed against Issuer following payment by Borrower of amounts required
hereunder on account of claims arising out of the gross negligence or willful
misconduct of Issuer in connection with the issuance, administration or payment
under any Letter of Credit issued hereunder.
2.13 Letter of Credit Applications. The Letter of Credit
-----------------------------
Applications shall be in form satisfactory to each Lender and Borrower.
20
2.14 Relationship to Letter of Credit Supplement. In the event
-------------------------------------------
of any inconsistency between the terms and provisions of this Agreement and the
terms and provisions of the Letter of Credit Supplement, the terms and
provisions of the Letter of Credit Supplement shall supersede and govern as it
relates to the parties thereto.
III. Factoring of Receivables.
------------------------
3.1 Covered Sales. Subject to Section 3.2 hereof, Borrower
-------------
hereby assigns and sells to Factor, as absolute owner, and Factor hereby
purchases from Borrower all Factored Receivables created on or after the Closing
Date. Factor's purchase of and acquisition of title to each Factored Receivable
will be effective as of the date of its creation and will be entered on Factor's
books when Borrower furnishes Factor with a copy of the respective invoice.
Factor is hereby authorized to notify each Customer of a Factored Receivable to
make payments directly to Factor. All proceeds of Factored Receivables shall be
deposited into an account in the name of and maintained with Factor. All funds
deposited in such account shall immediately become the property of Factor.
3.2 Customer Credit Approval. Borrower shall submit to Factor
------------------------
the principal terms of each Customer's orders for Factor's written credit
approval. Factor, may in its credit judgment, approve in writing all or a
portion of such Customer's orders, either by establishing a credit line limited
to a specific amount for a specific Customer, or by approving all or a portion
of a proposed purchase order submitted by Borrower. No credit approval shall be
effective (i) unless in writing, (ii) unless the goods are shipped or the
services rendered within the time specified in Factor's written credit approval
or within forty-five (45) days after the approval is given, if no time is
specified, and (iii) unless the assignment of the invoice evidencing the
applicable Receivable is received by Factor within five (5) Business Days from
the date of such invoice. After Customer has accepted delivery of the goods or
performance of the services, Factor shall then have the Credit Risk (but not the
risk of non-payment for any other reason), to the extent of the dollar amount
specified in the credit approval, on all Factored Receivables evidenced by
invoices which arise from orders approved by Factor in writing except for those
Receivables evidenced by invoices less than $150.00 and invoices evidencing
charges for samples supplied to Customers. Factor shall have neither the Credit
Risk nor the risk of non-payment for any other reason on Factored Receivables
arising from orders not approved by Factor in writing. Factor may, upon written
notice to Borrower, withdraw its credit approval or withdraw or adjust a credit
line at any time before Borrower delivers the goods or renders the services.
3.3 Purchase Price of Factored Receivables. The purchase price
--------------------------------------
of Factored Receivables is the net face amount thereof less Factor's commission.
The term "net face amount" means the gross face amount of the invoice, less
returns, discounts (which shall be determined by Factor where optional terms are
given), anticipated reductions or any other unilateral deductions taken by
Customers, and credits, and allowances to Customers of any nature. The purchase
price will be payable on the Factored Receivable Payment Date.
3.4 Matured Funds. On the last day of each month, Factor shall
-------------
credit Borrower's account with interest at the Matured Funds Rate in effect
during such month on the
21
average daily balance during such month of any amounts payable by Factor to
Borrower hereunder (as confirmed by Factor by appropriate credit to Borrower's
account with Factor) which are not drawn by Borrower on the Factored Receivable
Payment Date, while held by Factor after the Factored Receivable Payment Date.
3.5 Monthly Statement. Factor will provide Borrower with a
-----------------
monthly accounting statement which will be fully binding, unless, within sixty
(60) days after such statement is mailed to Borrower or within sixty (60) days
after the mailing of any adjustment thereof that Factor may make, Borrower gives
Factor specific written notice of exceptions.
3.6 Chargebacks. Factor's Credit Risk, if any, on a Factored
-----------
Receivable shall immediately terminate without any action on Factor's part in
the event that (i) a Customer asserts a Dispute as a ground for non-payment of
Factored Receivable or returns or attempts to return the goods represented
thereby, or (ii) any warranty by Borrower to Factor as to a Factored Receivable
is asserted by Customer to Borrower or Factor, in writing, to have been
breached, or of which Factor has received notice from Customer of such
assertion, then Factor may charge to Borrower's account at any time the net face
amount of any Factored Receivable purchased hereunder (or portion thereof) on
which Factor does not then have the Credit Risk, together with interest thereon
from the due date of such Factored Receivable to the date of chargeback; such
action on the part of Factor shall not be deemed a reassignment of such
Receivable and will not impair Factor's rights thereto or security interest
therein, which will continue to be effective until all Obligations hereunder are
fully satisfied.
IV. INTEREST AND FEES.
-----------------
4.1 Interest. Interest on Revolving Advances shall be payable
--------
in arrears on the last day of each month and shall be calculated on the actual
average of such daily Revolving Advances outstanding during the month. Pursuant
to an appropriately delivered Request for Advance in the form of Exhibit C,
Borrower may elect that Revolving Advances accrue interest at a rate per annum:
(a) with respect to a Base Rate Advance, equal to the
sum of the Alternate Base Rate from time to time in effect; or
(b) with respect to a LIBOR Rate Advance, equal to the
sum of the LIBOR Rate plus the Applicable LIBOR Rate Margin then in effect.
Upon and after the occurrence of an Event of Default,
and during the continuation thereof, the Obligations hereunder shall bear
interest at the Alternate Base Rate plus any increased charges (if applicable)
assessed pursuant to Section 2.2 hereof, plus two percent (2%) per annum (the
"Default Rate").
4.2 Letters of Credit.
-----------------
(a) Borrower shall pay (A) to Agent, for the pro rata
benefit of Lenders (based upon their Revolving Percentage), a fee equal to one
fifth of one percent (.20%)
22
per annum times the average daily aggregate undrawn amount of Borrower's
Commercial Letters of Credit outstanding from time to time during the term of
this Agreement for each corresponding period, which fee shall be due and payable
in arrears on the last day of each month and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason, and (B) to
Issuer an issuance fee of one eighth of one percent (.125%) and a negotiation
fee of one eighth of one percent (.125%) of the face amount of each such
Commercial Letter of Credit, together with other normal and customary charges
associated with such Letter of Credit, which such charges shall be due and
payable in accordance with Issuer's standard procedures and shall not be subject
to rebate or proration upon the termination of this Agreement for any reason.
(b) Borrower shall pay to Agent a Usance Draft fee equal
to one and one half percent (1.5% ) per annum of the amount of accepted Usance
Drafts, which fee shall be calculated on a monthly basis and due and payable in
advance at the time a Usance Draft is accepted by Issuer and monthly thereafter
and shall not be subject to rebate or proration upon the termination of this
Agreement for any reason. Issuer shall be paid one quarter of one percent (.25%)
of the Usance Draft fee. The remaining one and one quarter percent (1.25%) of
the Usance Draft fee shall be shared by Lenders based upon their Revolving
Percentage.
(c) Borrower shall pay (A) to Agent a fee for issuing or
causing to be issued a Standby Letter of Credit equal to one and one half
percent (1.5%) per annum on the outstanding amount thereof, which fee shall be
due and payable monthly in advance, commencing on the date of issuance and
monthly thereafter and shall not be subject to rebate or proration upon the
termination of this Agreement for any reason; the Issuer shall be paid one
quarter of one percent (.25%) of this fee and the remaining one and one quarter
percent (1.25%) of this fee shall be shared by the Lenders based upon their
Revolving Percentage; and (B) to Issuer all normal and customary charges
associated with the issuance, negotiation, and administration of each such
Standby Letters of Credit (such charges, as of the Closing Date, being as set
forth in a separate letter between Issuer and Borrower), which such charges
shall be due and payable in accordance with Issuer's standard procedures and
shall not be subject to rebate or proration upon the termination of this
Agreement for any reason.
(d) Upon the occurrence of any Event of Default, and
upon termination of this Agreement for any reason while Letters of Credit are
outstanding, Borrower will, upon demand by Agent, cause cash to be deposited and
maintained in an account with Issuer, as cash collateral to secure all
Obligations, in an amount equal to outstanding Letters of Credit and Borrower
hereby irrevocably authorizes Issuer, in its discretion, on Borrower's behalf
and in Borrower's name, to open such an account and to make and maintain
deposits therein, or in an account opened by Borrower, in the amounts required
to be made by Borrower, out of the proceeds of Receivables or other Collateral
or out of any other funds of Borrower coming into Issuer's possession at any
time. Issuer will invest such cash collateral (less applicable reserves) in such
short-term money market items as to which Issuer and Borrower mutually agree and
the net return on such investments shall be credited to such account and
constitute additional cash collateral. Borrower may not withdraw amounts
credited to any such account except upon payment and performance in full of all
Obligations and termination of this Agreement.
23
4.3 Unused Line Fee. Borrower agrees to pay to Agent, for the
---------------
pro rata benefit of Lenders (based upon their Revolving Percentages) a fee (i)
of one quarter of one percent (.25%) per annum on the average unused line amount
up to and including $75,000,000 and (ii) one half of one percent (.50%) per
annum on the average unused line amount over $75,000,000, determined by the
weighted average credit outstanding during the specified period. The calculation
of credit outstanding shall include undrawn amounts of Letters of Credit. The
fee shall be payable quarterly in arrears, commencing March 31, 2000.
4.4 Factor's Commission. Borrower agrees to pay Factor a
-------------------
monthly commission as described in the letter agreement between Borrower and
Factor dated as of the date hereof.
4.5 Agent's Fee. Borrower agrees to pay Agent a fee as
-----------
described in the letter agreement between Borrower and Agent dated as of the
date hereof.
4.6 Reimbursement Costs.
-------------------
(a) Borrower agrees to reimburse Secured Parties for any
expenses they incur in the preparation of this Agreement and any agreement or
instrument required by this Agreement (expenses include, but are not limited to
reasonable attorneys' fees).
(b) Borrower agrees to reimburse Agent for the cost of
periodic audits and appraisals of the real and personal property collateral
securing this Agreement, at such intervals as Agent may reasonably require. The
audits and appraisals may be performed by employees of Agent or by independent
appraisers.
4.7 Computation of Interest and Fees. Interest and fees
--------------------------------
hereunder shall be computed on the basis of a year of three hundred sixty (360)
days and for the actual number of days elapsed. If any payment to be made
hereunder becomes due and payable on a day other than a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the interest rate currently in effect during such
extension.
4.8 Maximum Charges. In no event whatsoever shall interest and
---------------
other charges hereunder exceed the highest rate permissible under law which a
court of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that a court determines that any Lender has received
interest and other charges hereunder in excess of the highest rate applicable
hereto, such excess interest shall be first applied to any unpaid principal
balance owed by Borrower, and if the then remaining excess interest is greater
than the previously unpaid principal balance, such Lender shall promptly refund
such excess amount to Borrower and the provisions hereof shall be deemed amended
to provide for such permissible rate.
4.9 Increased Costs. In the event that any applicable law,
---------------
treaty or governmental regulation, or any change therein or in the
interpretation or application thereof, or compliance by any Lender (for purposes
of this Section 4.9, the term "Lender" shall include Lender or any corporation
or bank controlling Lender) with any request or directive (whether or
24
not having the force of law) from any central bank or other financial, monetary
or other authority, shall:
(a) subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Advance or change the basis of taxation of
payments to such Lender of principal, fees, interest or any other amount payable
hereunder or under any Other Documents (except for changes in the rate of tax on
the overall net income of such Lender by the jurisdiction or taxing authority in
which it maintains its principal office);
(b) impose, modify or hold applicable any reserve,
special deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit
extended by, any office of such Lender, including, without limitation, pursuant
to Regulation D of the Board of Governors of the Federal Reserve System; or
(c) impose on any Lender any other condition with
respect to this Agreement, any Other Documents or any other Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining its Advances hereunder by an amount that Lender
deems to be material or to reduce the amount of any payment, whether of
principal, interest or otherwise, in respect of any of the Advances by an amount
that Lender deems to be material, then, Borrower shall promptly pay such Lender,
upon its demand, such additional amount as will compensate such Lender for such
additional cost or such reduction, as the case may be. Lender shall certify the
amount of such additional cost or reduction to Borrower, and such certification
shall be conclusive absent manifest error.
4.10 Capital Adequacy.
----------------
(a) In the event that any Lender shall have determined
that any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender (for purposes of this Section 4.10, the term "Lender" shall
include Lender or any corporation or bank controlling Lender) and the office or
branch where Lender (as so defined) makes or maintains any Advances with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below that which Lender
could have achieved but for such adoption, change or compliance (taking into
consideration Lender's policies with respect to capital adequacy) by an amount
deemed by Lender to be material, then, from time to time, Borrower shall pay
upon demand to Lender such additional amount or amounts as will compensate
Lender for such reduction. In determining such amount or amounts, such Lender
may use any reasonable averaging attribution methods. The protection of this
Section 4.10 shall be available to Lenders regardless of any possible contention
of invalidity or inapplicability of the law, regulation or condition which shall
have been imposed.
25
(b) A certificate of any Lender setting forth such
amount or amounts as shall be necessary to compensate such Lender as specified
in this Section 4.10 shall be delivered to Borrower and shall be conclusive
absent manifest error.
4.11 Survival. The obligations of Borrower under Sections 4.9
--------
and 4.10 hereof shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.
V. COLLATERAL: GENERAL TERMS
-------------------------
5.1 Security Interest in the Collateral. To secure the prompt
-----------------------------------
payment and performance to Secured Parties of the Obligations, Borrower hereby
assigns, pledges and grants to Agent, on behalf of Secured Parties, a continuing
security interest in and to all of the Collateral, whether now owned or existing
or hereafter acquired or arising and wheresoever located. Borrower shall xxxx
its books and records as may be necessary and appropriate to evidence, protect
and perfect Agent's and Secured Parties' security interest and shall cause its
financial statements to reflect such security interest.
5.2 Perfection of Security Interest. Borrower shall take all
-------------------------------
action that may be necessary or desirable, or that Agent may request, so as at
all time to maintain the validity, perfection, enforceability and priority of
the security interest of Agent and Secured Parties in the Collateral or to
enable Agent to protect, exercise or enforce its rights hereunder and in the
Collateral, including, but not limited to, (i) immediately discharging all Liens
other than Permitted Encumbrances, (ii) obtaining landlords' or mortgagees' lien
waivers from Principal Owners and any other owner of real property in the United
States of America, in which Collateral upon which Advances have been or will be
made is located, (iii) delivering to Agent, endorsed or accompanied by such
instruments of assignment as Agent may specify, and stamping or marking, in such
manner as Agent may specify, any and all chattel paper, instruments, letters of
credits and advices thereof and documents evidencing or forming a part of the
Collateral, and (iv) executing and delivering financing statements, instruments
of pledge, mortgages, notices and assignments, in each case in form and
substance reasonably satisfactory to Agent, relating to the creation, validity,
perfection, maintenance or continuation of Agent's security interest under the
Uniform Commercial Code or other applicable law. All charges, expenses and fees
Agent may incur in doing any of the foregoing, and any local taxes relating
thereto, shall be charged to Borrower's account and added to the Obligations, or
at Agent's option, shall be paid to Agent immediately upon demand.
5.3 Disposition of Collateral. Borrower will safeguard and
-------------------------
protect all Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise except the sale of Inventory in the
ordinary course of business.
5.4 Preservation of Collateral. Following the occurrence of an
--------------------------
Event of Default in addition to the rights and remedies set forth in Section
12.1 hereof, Agent: (a) may at any time take such steps as Agent, on behalf of
Secured Parties, deems necessary to protect Agent's interest in and to preserve
the Collateral, including the hiring of such security guards or
26
the taking of such other security protection measures as Agent may reasonably
deem appropriate under the circumstances; (b) may employ and maintain at any of
Borrower's premises a custodian who shall have full authority to do all acts
reasonably necessary to protect Agent's interests in the Collateral; (c) may
lease warehouse facilities to which Agent may move all or part of the
Collateral; (d) may use any of Borrower's owned or leased lifts, hoists, trucks
and other facilities or equipment for handling or removing the Collateral; and
(e) shall have, and is hereby granted, a right of ingress and egress to the
places where the Collateral is located, and may proceed over and through any of
Borrower's owned or leased property. Borrower shall cooperate fully with all of
Agent's efforts to preserve the Collateral and will take such actions to
preserve the Collateral as Agent may direct. All of Agent's reasonable expenses
of preserving the Collateral, including any expenses relating to the bonding of
a custodian, shall be charged to Borrower's account and added to the
Obligations.
5.5 Ownership of Collateral. With respect to the Collateral,
-----------------------
at the time the Collateral becomes subject to Agent's security interest: (a)
Borrower shall be the sole owner of and fully authorized and able to sell,
transfer, pledge and/or grant a first security interest in each and every item
of the Collateral to Agent on behalf of the Secured Parties; and, except for
Permitted Encumbrances the Collateral shall be free and clear of all Liens,
Claims, Charges and encumbrances whatsoever; (b) each document and Agreement
executed by Borrower or delivered to Agent in connection with this Agreement
shall be true and correct in all respects; (c) all signatures and endorsements
of Borrower that appear on such documents and agreements shall be genuine and
Borrower shall have full capacity to execute same; and (d) Borrower's Inventory
is located as set forth on Schedule 5.5 and shall not be removed from such
location(s) without the prior written consent of Agent, except with respect to
the sale of Inventory in the ordinary course of business.
5.6 Defense of Agent's Interests. Until (a) payment and
----------------------------
performance in full of all of Obligations and (b) termination of this Agreement,
Agent's interests in the Collateral hereby granted to Agent on behalf of Secured
Parties shall continue in full force and effect. During such period Borrower
shall not, without Agent's prior written consent, pledge, sell (except Inventory
in the ordinary course of business), assign, transfer, create or suffer to exist
a security interest in, Lien, Claim or Charge upon or encumber or allow or
suffer to be encumbered in any way except for Permitted Encumbrances, any part
of the Collateral. Borrower shall defend Agent's interests in the Collateral
against any and all Persons whatsoever. At any time following demand by Agent
for payment of all Obligations, Agent shall have the right to take possession of
the Collateral and the Collateral in whatever physical form contained, including
without limitation: labels, stationery, documents, instruments and advertising
materials. If Agent exercises this right to take possession of the Collateral,
Borrower shall, upon demand, assemble it in the appropriate manner and make it
available to Agent at a place reasonably convenient to Agent. In addition, with
respect to all Collateral, Agent shall be entitled to all of the rights and
remedies set forth herein and further provided by the Uniform Commercial Code or
other applicable law. Borrower shall, and Agent may, at its option, instruct all
suppliers, carriers, forwarders, warehouses or others receiving or holding cash,
checks, Inventory, documents or instruments in which Agent holds a security
interest to deliver same to Agent or subject to Agent's order and if they shall
come into Borrower's possession, they, and each of
27
them, shall be held by Borrower in trust as Agent's trustee, and Borrower will
promptly deliver them to Agent in their original form together with any
necessary endorsement.
5.7 Books and Records. Borrower (a) shall keep proper books of
-----------------
record and account in which full, true and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs; (b) set
up on its books accruals with respect to all taxes, assessments, charges, levies
and claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
certified public accountant as shall then be regularly engaged by Borrower.
5.8 Compliance with Laws. Borrower shall comply in all
--------------------
materials respects with all acts, rules, regulations, directions and orders of
any legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof or to the operation of Borrower's business, the
non-compliance with which would have a material adverse effect on the
Collateral, or the operations, business or condition (financial or otherwise) of
Borrower except where the failure to comply will not have a material and adverse
effect. Borrower may, however, contest or dispute any acts, rules, regulations,
orders and directions of those bodies or officials in any reasonable manner,
provided that any related Lien is inchoate or stayed and sufficient reserves are
established to the reasonable satisfaction of Agent to protect Agent's Lien on
or security interest in the Collateral.
5.9 [Intentionally Omitted]
5.10 Inspection of Premises. At all reasonable times Agent
----------------------
shall have full access to and the right to audit, check, inspect and make
abstracts and copies from Borrower's books, records, audits, correspondence and
all other papers relating to the Collateral and the operation of Borrower's
business. Agent and its agents may enter upon any of Borrower's premises at any
time during business hours and at any other reasonable time, and from time to
time (provided, however, if there is then existing no Event of Default or
Prospective Event of Default, Agent shall provide not less than two (2) Business
Days' prior notice) for the purpose of inspecting the Collateral and any and all
records pertaining thereto and the operation of Borrower's business.
5.11 Insurance. Borrower shall bear the full risk of loss from
---------
any loss of any nature whatsoever with respect to the Collateral, except in the
event and to the extent the Collateral is in possession of Agent and while in
Agent's possession, Agent is grossly negligent or engages in willful misconduct
and such loss is the result of the foregoing. At Borrower's own cost and expense
in amounts and with carriers acceptable to Agent, Borrower shall (a) keep all
its insurable properties and properties in which Borrower has an interest
insured against the hazards of fire, flood, sprinkler leakage, those hazards
covered by extended coverage insurance and such other hazards, and for such
amounts, as is customary in the case of companies engaged in
28
businesses similar to Borrower's including, without limitation, business
interruption insurance; (b) maintain a bond in such amounts as is customary in
the case of companies engaged in business similar to Borrower's insuring against
larceny, embezzlement or other criminal misappropriation of insured's officers
and employees who may either singly or jointly with others at any time have
access to the assets or funds of Borrower either directly or through authority
to draw upon such funds or to direct generally the disposition of such assets;
(c) maintain public and product liability insurance against claims for personal
injury, death or property damage suffered by others; (d) maintain all such
workers' compensation or similar insurance as may be required under the laws of
any state or jurisdiction in which Borrower is engaged in business; (e) furnish
Agent with (i) copies of all policies and evidence of the maintenance of such
policies by the renewal thereof at least thirty (30) days before any expiration
date, and (ii) appropriate loss payable endorsements in form and substance
satisfactory to Agent, naming Agent as loss payee as its interests may appear
with respect to all insurance coverage referred to in clauses (a)and(b) above,
and providing (A) that all proceeds thereunder shall be payable to Agent, (B) no
such insurance shall be affected by any act or neglect of the insured or owner
of the property described in such policy, and (C) that such policy and loss
payable clauses may not be canceled, amended or terminated unless at least
thirty (30) days' prior written notice is given to Agent. In the event of any
loss thereunder, the carriers named therein hereby are directed by Agent and
Borrower to make payment for such loss to Agent and not to Borrower and Agent
jointly. If any insurance losses are paid by check, draft or other instrument
payable to Borrower and Agent jointly, Agent may endorse Borrower's name thereon
and do such other things as Agent may deem advisable to reduce the same to cash.
Agent is hereby authorized to adjust and compromise claims under insurance
coverage referred to in clauses (a)and(b) above. All loss recoveries received by
Agent upon any such insurance may be applied to the Obligations, in such order
as Agent in its reasonable discretion shall determine. Any surplus shall be paid
by Agent to Borrower or applied as may be otherwise required by law. Any
deficiency thereon shall be paid by Borrower to Agent on demand.
5.12 Failure to Pay Insurance. If Borrower fails to obtain
------------------------
insurance as hereinabove provided, or to keep the same in force, Agent, if Agent
so elects and upon notice to Borrower, may obtain such insurance and pay the
premium therefor for Borrower's account, and charge Borrower's account therefor
and such expenses so paid shall be part of the Obligations.
5.13 Payment of Taxes. Borrower will pay, when due, all taxes,
----------------
assessments and other Charges or Claims lawfully levied or assessed upon
Borrower or any of the Collateral including, without limitation, real and
personal property taxes, assessments and charges and all franchise, income,
employment, old age benefits, withholding, and sales taxes. If any tax by any
governmental authority is or may be imposed on or as a result of any transaction
between Borrower and Agent which Agent may be required to withhold or pay or if
any taxes, assessments, or other Charges remain unpaid after the date fixed for
their payment, or if any Claim shall be made which, in Agent's opinion, will
create a valid Lien, Charge or Claim on the Collateral, Agent may without notice
to Borrower pay the taxes, assessments, Liens, Charges or Claims and Borrower
hereby indemnifies and holds Agent harmless in respect thereof, except in the
event the foregoing is the result of the gross negligence or willful misconduct
of Agent. Agent will not pay any taxes, assessments, Liens, Charges or Claims to
the extent that Borrower has contested or disputed those Liens, Charges and
Claims in good faith, by expeditious protest,
29
administrative or judicial appeal or similar proceeding provided that any
related tax lien is stayed and sufficient reserves are established to the
reasonable satisfaction of Agent to protect Secured Parties' security interest
in or Lien on the Collateral. The amount of any payment by Agent under this
Section 5.13 shall be charged to Borrower's account as a Revolving Advance and
added to the Obligations and, until Borrower shall furnish Agent with an
indemnity therefor (or supply Agent with evidence satisfactory to Agent that due
provision for the payment thereof has been made).
5.14 Payment of Leasehold Obligations. Borrower shall at all
--------------------------------
times pay, when and as due, its rental obligations under all material leases
under which it is a tenant, and shall otherwise comply, in all material
respects, with all other terms of such leases and keep them in full force and
effect and, at Agent's written request, will provide reasonable evidence of
having done so.
5.15 Receivables.
-----------
(a) Nature of Receivables. Each of the Receivables shall
---------------------
be a bona fide and valid account representing a bona fide indebtedness incurred
by Customer therein named, for a fixed sum as set forth in the invoice relating
thereto (provided immaterial or unintentional invoice errors shall not be deemed
to be a breach hereof) with respect to an absolute sale or lease and delivery of
goods upon stated terms of Borrower, or work, labor or services theretofore
rendered by Borrower and as of the date each Receivable is created, same shall
be due and owing in accordance with Borrower's standard terms of sale without
dispute, setoff or counterclaim except as may be stated on the Receivable
schedules delivered by Borrower to Agent.
(b) Solvency of Customers. Each Customer, to Borrower's
---------------------
knowledge, as of the date each Receivable is created, is and will be solvent and
able to pay all Receivables on which Customer is obligated in full when due,
and, with respect to such Customers of Borrower who are not solvent, Borrower
has set up on its books and in its financial records bad debt reserves adequate
to cover such Receivables.
(c) Location of Borrower. The chief executive office for
--------------------
each Borrower is located at the address appearing on the signature page of this
Agreement. Until written notice is given to Agent by Borrower of any other
office at which it keeps its records pertaining to Receivables, all such records
shall be kept at such executive office.
(d) Collection of Receivables. Until Borrower's
-------------------------
authority to do so is terminated by Agent and Majority Lenders (which notice
Agent may give at any time following the occurrence of an Event of Default),
Borrower will, at Borrower's sole cost and expense, but on behalf of and for the
account of Secured Parties, collect as Secured Parties' property and in trust
for Agent on behalf of the Secured Parties all amounts received on Receivables
(other than Factored Receivables) and shall not commingle such collections with
Borrower's funds or use the same except to pay Obligations. Borrower shall, upon
request, deliver to Agent in original form and on the date of receipt thereof,
all checks, drafts, notes,
30
money orders, acceptances, cash and other evidences of Indebtedness of
Customers. Factored Receivables shall be collected pursuant to Article III.
(e) Notification of Assignment of Receivables. At any
-----------------------------------------
time Agent shall have the right to send notice of the assignment of, and Agent's
security interest in, the Receivables (other than Factored Receivables) to any
and all Customers or any third party holding or otherwise concerned with any of
the Collateral. Thereafter, Agent shall have the right to collect the
Receivables (other than Factored Receivables), take possession of the
Collateral, or both. Agent's actual collection expenses, including but not
limited to, stationery and postage, telephone and telegraph, secretarial and
clerical expenses and the salaries of any collection personnel used for
collection may be charged to Borrower's account and added to the Obligations.
Factored Receivables shall be collected pursuant to Article III.
(f) Power of Agent to Act on Borrower's Behalf. Agent
------------------------------------------
shall have the right to receive, endorse, assign and/or deliver in the name of
Agent or Borrower any and all checks, drafts and other instruments for the
payment of money relating to the Receivables, and Borrower hereby waives notice
of presentment, protest and nonpayment of any instrument so endorsed. Upon the
occurrence of and during the continuance of an Event of Default, Borrower hereby
constitutes Agent or Agent's designee as Borrower's attorney with power (i) to
endorse Borrower's name upon any notes, acceptances, checks, drafts, money
orders or other evidences of payment or the Collateral; (ii) to sign Borrower's
name on any invoice or xxxx of lading relating to any of the Receivables; (iii)
to send verifications of Receivables, drafts against Customers, assignments and
verifications of Receivables; (iv) to send verifications of Receivables to any
Customer; (v) to sign Borrower's name on all financing statements or any other
documents or instruments deemed necessary or appropriate by Lenders to preserve,
protect, or perfect Secured Parties' interest in the Collateral and to file
same; (vi) to demand payment of the Receivables; (vii) to enforce payment of the
Receivables by legal proceedings or otherwise; (viii) to exercise all of
Borrower's rights and remedies with respect to the collection of the Receivables
and any other Collateral; (ix) to settle, adjust, compromise, extend or renew
the Receivables; (x) to settle, adjust or compromise any legal proceedings
brought to collect Receivables; (xi) to prepare, file and sign Borrower's name
on a proof of claim in bankruptcy or similar document against any account
debtor; (xii) to prepare, file and sign Borrower's name on any notice of Lien,
assignment or satisfaction of Lien or similar document in connection with the
Receivables; and (xiii) to do all other acts and things necessary to carry out
this Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or of
law, unless done wilfully, maliciously or with gross negligence. This power,
being coupled with an interest, is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right at any time during the occurrence of
an Event of Default, to change the address for delivery of mail addressed to
Borrower to such address as Agent may designate.
(g) No Liability. Agent shall not, under any
------------
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom except in the event any of the foregoing are the
result of its gross negligence or wilful misconduct. Agent may, without notice
or consent
31
from Borrower, xxx upon or otherwise collect, extend the time of payment of,
compromise or settle for cash, credit or upon any terms any of the Receivables
or any other securities, instruments or insurance applicable thereto and/or
release any obligor thereof. Agent is authorized and empowered to accept the
return of the goods represented by any of the Receivables, without notice to or
consent by Borrower, all without discharging or in any way affecting Borrower's
liability hereunder.
(h) Establishment of Depository Accounts. Borrower shall
------------------------------------
establish depository accounts ("Depository Accounts") in the name of Borrower at
a bank or banks reasonably acceptable to Agent for the deposit of all proceeds
of Receivables (other than Factored Receivables), and Borrower shall deposit all
proceeds of such Receivables or cause same to be deposited, in kind, in such
Depository Accounts. Borrower hereby assigns all of its right, title and
interest in and to all Depository Accounts, including the proceeds thereof, to
secure all Obligations of Borrower under this Agreement. Borrower shall advise
Agent of the location and account numbers of all Depository Accounts. Agent is
hereby authorized to give notices to any financial institution of its security
interest in any Depository Accounts maintained at such financial institution.
Borrower shall execute such documents as Agent deems necessary or appropriate to
obtain, maintain and perfect a security interest in the Depository Accounts.
Factored Receivables shall be collected pursuant to Article III.
5.16 Inventory. All Inventory has been, and will be produced
---------
by Borrower in accordance with the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations and orders thereunder, except for that
Inventory produced outside of the United States of America.
5.17 Maintenance of Equipment. The equipment used by Borrower
------------------------
in the operation of its business shall be maintained in reasonably good
operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made.
5.18 Exculpation of Liability. Nothing herein contained shall
------------------------
be construed to constitute Agent as Borrower's agent for any purpose whatsoever,
nor shall Agent be responsible or liable for any shortage, discrepancy, damage,
loss or destruction of any part of the Collateral wherever the same may be
located and regardless of the cause thereof. Agent does not, whether by anything
herein or in any assignment or otherwise, assume any of Borrower's obligations
under any contract or agreement assigned to Agent, and Agent shall not be
responsible in any way for the performance by Borrower of any of the terms and
conditions thereof.
5.19 Environmental Matters. Borrower will establish and
---------------------
maintain a system to assure and monitor continued compliance with all applicable
Environmental Laws which system shall include periodic review of such
compliance.
VI. REPRESENTATIONS AND WARRANTIES.
------------------------------
Borrower represents and warrants as follows:
32
6.1 Authority. Borrower has full power, authority and legal
---------
right to enter into this Agreement and the Other Documents and perform all
obligations hereunder. The execution, delivery and performance hereof and of the
Other Documents are within Borrower's corporate powers, have been duly
authorized, are not in contravention of law or the terms of Borrower's by-laws,
certificate of incorporation or other applicable documents relating to
Borrower's formation or to the conduct of Borrower's business or of any material
agreement or undertaking to which Borrower is a party or by which Borrower is
bound, and will not conflict with nor result in any material breach in any of
the provisions of or constitute a default under or result in the creation of any
Lien, except Permitted Encumbrances, upon any asset of Borrower under the
provisions of any agreement, charter, instrument, by-law or other instrument to
which Borrower is a party or by which it may be bound.
6.2 Formation and Qualification. Borrower is duly incorporated
---------------------------
and in good standing under the laws of the State of California and is qualified
to do business and is in good standing in the states listed on Schedule 6.2,
------------
which constitute all states in which qualification and good standing are
necessary for Borrower to conduct its business and own its property and where
the failure to so qualify would have a material adverse effect on Borrower or
its business. Borrower has delivered to Agent true and complete copies of its
certificate of incorporation and by-laws and will promptly notify Agent of any
amendment or changes thereto.
6.3 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties of Borrower contained in this Agreement and the
Other Documents shall be true at the time of Borrower's execution of this
Agreement and the Other Documents, and shall survive the execution, delivery and
acceptance thereof by Lenders and the parties thereto. Borrower and Lenders
expressly agree that any misrepresentation or breach of any representation or
warranty whatsoever contained in this Agreement or the Other Documents shall be
deemed material.
6.4 Tax Returns. TAG's federal tax identification number is
-----------
00-0000000. TMI's federal tax identification number is 00-0000000. Borrower has
filed all federal, state and local tax returns and other reports it is required
by law to file and has paid all material taxes, assessments, fees and other
governmental charges that are due and payable. The provision for taxes on the
books of Borrower are adequate for all years not closed by applicable statutes,
and for its current fiscal year, and Borrower has no knowledge of any deficiency
or additional assessment in connection therewith not provided for on its books.
6.5 Financial Statements. The consolidated balance sheets of
--------------------
TAG and its Subsidiaries and such other Persons described therein (including the
accounts of all Subsidiaries for the respective periods during which a
subsidiary relationship existed) as of September 30,1999, and the related
statements of income, changes in stockholder's equity, and changes in financial
position statements for the period ended on such date, all accompanied by
reports thereon containing opinions without qualification by independent
certified public accountants, copies of which have been delivered to Agent, have
been prepared in accordance with GAAP, practices and procedures, consistently
applied (except for changes in application in which such accountants concur and
present fairly the financial position of Borrower and its Subsidiaries at such
date and the results of their operations for such period). Since September 30,
1999, there has been no change in the condition, financial or otherwise, of
Borrower or its
33
Subsidiaries as shown on the consolidated balance sheet as of such date, except
changes in the ordinary course of business, none of which individually or in the
aggregate is materially adverse.
6.6 Corporate Name. Borrower has not been known by any other
--------------
corporate name in the past five (5) years and does not sell Inventory under any
other name except as set forth on Schedule 6.6 (a) hereto, nor has Borrower been
----------------
the surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person during the preceding five (5)
years except as set forth on Schedule 6.6 (b) hereto.
6.7 Compliance.
----------
(a) Borrower has duly complied with, and its facilities,
business assets, property, leaseholds and equipment are in compliance in all
material respects with, the provisions, of the Federal Occupational Safety and
Health Act, the Environmental Protection Act, and all other Environmental Laws,
the Sanction/Embargo Programs, and all other laws, and all rules and regulations
promulgated thereunder; and there are not and there have been no material
outstanding citations, notices or orders of non-compliance issued to Borrower or
relating to its business, assets, property, leaseholds or equipment under any
laws, rules or regulations.
(b) Borrower has been issued all required federal, state
and local licenses, certificates or permits relating to, and Borrower and its
facilities, businesses, assets, property, leaseholds and equipment are in
compliance in all material respects with all applicable Environmental Laws and
all other laws, rules and regulations.
6.8 Solvency; No Litigation, Violation, Indebtedness or
---------------------------------------------------
Default.
-------
(a) Borrower is solvent, able to pay its debts as they
mature, has capital sufficient to carry on its business and all businesses in
which it is about to engage, and (i) as of the Closing Date, the fair present
saleable value of its assets, calculated on a going concern basis, is in excess
of the amount of its liabilities and (ii) subsequent to the Closing Date, the
fair saleable value of its assets (calculated on a going concern basis) will be
in excess of the amount of its liabilities.
(b) Except as disclosed in Schedule 6.8, and in the
------------
financial statement delivered pursuant hereto, Borrower has (i) no pending or
threatened litigation, actions or proceedings which involve the probability of
materially and adversely affecting its business, assets, operations, condition
or prospects, financial or otherwise, or the Collateral, or the ability of
Borrower to perform this Agreement, and (ii) no liabilities nor indebtedness
other than the Obligations.
(c) Borrower is not in violation of any applicable
statute, rule, regulation or ordinance in any respect materially and adversely
affecting the Collateral or its business, assets, operations or condition or
prospects, financial or otherwise, nor is Borrower in violation of any order of
any court, governmental authority or arbitration board or tribunal that would
have a material adverse effect on the financial condition of Borrower.
34
(d) Borrower has received no notice that it is not in
full compliance with any of the requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder, and (i) it has not engaged in any Prohibited
Transactions as defined in Section 406 of ERISA and Section 4975 of the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder, (ii) it has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of their plans and no funding requirements have
been postponed or delayed, (iii) it has no knowledge of any event or occurrence
which would cause the Pension Benefit Guaranty Corporation to institute
proceedings under Title IV of ERISA to terminate any of the employee benefit
plans, (iv) there exists no event described in Section 4043 of ERISA, excluding
subsections 4043(b)(2) and 4043(b)(3) thereof, for which the thirty (30) day
notice period contained in 12 Code of Federal Regulations Section 2615.3 has not
been waived, (v) it does not have any fiduciary responsibility for investments
with respect to any plan existing for the benefit of persons other than its
employees or former employees, and (vi) it has not withdrawn, completely or
partially, from any multi-employer pension plans so as to incur liability under
the Multi-Employer Pension Plan Amendments of 1980.
6.9. Patents, Trademarks, Copyrights and Licenses. All
--------------------------------------------
patents, patent applications, trademarks, trademark applications, copyrights,
copyright applications, trade names, trade secrets and licenses owned or
utilized by Borrower are set forth on Schedule 6.9 (a), have been duly
----------------
registered or filed with all appropriate governmental authorities; and there is
no objection or pending challenge to the validity of any such material patent,
trademark, copyright, trade name, trade secret or license and Borrower is not
aware of any grounds for any challenge, except as set forth in Schedule 6.9 (b)
----------------
hereto.
6.10 Licenses and Permits. Except as set forth in Schedule
-------------------- --------
6.10, Borrower (a) is in compliance with and (b) has procured and is now in
----
possession of, all material licenses or permits required by any applicable
Federal, state or local law or regulation for the operation of its business in
each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits would have a material
adverse effect on the business, properties, condition (financial or otherwise)
or operations, present or prospective of Borrower.
6.11 Default of Indebtedness. Borrower is not in default in
-----------------------
the payment of the principal of or interest on any Indebtedness or under any
instrument or agreement under or subject to which any Indebtedness has been
issued, and no event has occurred under the provisions of any such instrument or
agreement which with or without the lapse of time or the giving of notice, or
both, constitutes or would constitute an event of default thereunder.
6.12 No Default. Borrower is not in default in the payment or
----------
performance of any of its contractual obligations, and no Prospective Event of
Default has occurred.
6.13 No Burdensome Restrictions. Borrower is not party to any
--------------------------
contract or agreement the performance of which would materially adversely affect
the business, assets, operations, condition (financial or otherwise) or
prospects of Borrower. Borrower has not agreed
35
or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien which is not a Permitted Encumbrance.
6.14 No Labor Disputes. Borrower is not involved in any labor
-----------------
dispute; there are no strikes or walkouts or union organization of any of
Borrower's employees threatened or in existence and no labor contract is
scheduled to expire during the term of this Agreement other than as set forth on
Schedule 6.14 hereto.
6.15 Margin Regulations. Borrower is not engaged, nor will it
------------------
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Revolving
Advance will be used for "purchasing" or "carrying" "margin stock" as defined in
Regulation U of such Board of Governors.
6.16 Investment Company Act. Borrower is not an "investment
----------------------
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, nor is it controlled by such a company.
6.17 Disclosure. No representation or warranty made by
----------
Borrower in this Agreement or in any financial statement, report, certificate or
any other document furnished in connection herewith contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading. There is no fact known to
Borrower or which reasonably should be known to Borrower which Borrower has not
disclosed to Lenders in writing with respect to the transactions contemplated by
this Agreement which materially and adversely affects the condition (financial
or otherwise), results of operations, business, or assets of Borrower and its
Subsidiaries.
6.18 Swaps. Borrower is not a party to, nor will it be a party
-----
to, any swap agreement whereby Borrower has agreed or will agree to swap
interest rates or currencies unless same provides that damages upon termination
following an event of default thereunder are payable on an unlimited "two-way
basis" without regard to fault on the part of either party.
6.19 Year 2000 Issue. Borrower and its Subsidiaries have
---------------
reviewed the effect that the Year 2000 Issue would have on their respective
businesses. The costs to Borrower and its Subsidiaries of any reprogramming
required to avoid the Year 2000 Issue to permit the proper functioning of
Borrower's and its Subsidiaries' computer software, hardware and firmware
systems and equipment containing embedded microchips and the proper processing
of data, and the testing of such reprogramming, and of the reasonably
foreseeable consequences of the Year 2000 Issue to Borrower and its Subsidiaries
(including reprogramming errors and the failure of systems or equipment supplied
by others or with which Borrower's and its Subsidiaries' computer systems
interface) are not reasonably expected to result in an Event of Default or to
have a material and adverse effect on Borrower's or its Subsidiaries'
businesses, assets, operations, prospects or condition (financial or otherwise).
Borrower has evaluated and
36
assessed the potential impact of the Year 2000 Issue upon Borrower's and it
Subsidiaries' customers, key suppliers and vendors and their efforts to manage
the risks arising out of the Year 2000 Issue, and Borrower has determined that
Borrower's and its Subsidiaries' businesses, assets, operations, prospects and
condition (financial and otherwise) shall not be materially adversely affected
by any such impact or risks.
VII. AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees that it shall, until payment in full
of the Obligations and termination of this Agreement:
7.1 Payment of Fees. Pay to Agent on demand all usual and
---------------
customary fees and expenses which Secured Parties incur in connection with (a)
the forwarding of Advance proceeds and (b) the establishment and maintenance of
any Depository Accounts as provided for in Section 5.15(h). Agent may, without
making demand, charge the account of Borrower for all such fees and expenses.
7.2 Conduct of Business and Maintenance of Existence and
----------------------------------------------------
Assets. (a) Conduct continuously and operate actively its business according to
------
good business practices and maintain all of its properties useful or necessary
in its business in good working order and condition (reasonable wear and tear
excepted and except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all licenses, patents, copyrights,
trade names, trade secrets and trademarks; (b) keep in full force and effect its
existence and comply in all material respects with the laws and regulations
governing the conduct of its business including but not limited to those
relating to the Federal Occupational Safety and Health Act, Environmental Laws
and Sanction/Embargo Programs where the failure to do so would have a material
adverse effect on Borrower or its business; and (c) make all such material
reports and pay all such franchise and other taxes and license fees and do all
such other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States of
America or any political subdivision thereof, or in any other jurisdiction,
where the failure to do so would have a material adverse effect on Borrower or
its business.
7.3 Violations. Promptly notify Agent in writing of any
----------
violation of any law, statute, regulation or ordinance of any governmental
entity, or of any agency thereof, applicable to Borrower which will, either in
the present or future, materially and adversely affect the Collateral or
Borrower's business, assets, operations, condition or prospects (financial or
otherwise).
7.4 Government Receivables. Take all steps necessary to
----------------------
protect Agent's interest in the Collateral under the Federal Assignment of
Claims Act or other applicable Federal, state or local statutes or ordinances
and deliver to Agent appropriately endorsed, any instrument or chattel paper
connected with any Receivable arising out of contracts between Borrower and the
United States of America, any state or any department, agency or instrumentality
of any of them.
37
7.5 Financial Covenants. Borrower shall maintain on a
-------------------
consolidated basis at all times:
(a) Tangible Net Worth in an amount not less than
$116,500,000;
(b) A Fixed Charge Coverage Ratio of at least 1.5:1.0;
(c) An Interest Coverage Ratio of at least 5.0:1.0; and
(d) A Total Leverage Ratio of not more than 1.8:1.0 for
the fiscal quarters ending December 31, 1999, March 31, 2000, June 30, 2000,
September 30, 2000, and December 31, 2000, and not more than 1.5:1.0 for the
fiscal quarter ending March 31, 2001 and each fiscal quarter thereafter.
7.6 Paydown Period. Reduce the amount of Advances outstanding
--------------
under the Overadvance Limit to zero for a period of at least thirty (30)
consecutive days in each LineYear.
7.7 Execution of Supplemental Instruments. Execute and deliver
-------------------------------------
to Agent from time to time, upon demand, such supplemental agreements,
statements, assignments and transfers, or instructions or documents relating to
the Collateral, and such other instruments as Agent may reasonably request, in
order that the full intent of this Agreement may be carried into effect.
7.8 Payment of Indebtedness. Pay, discharge or otherwise
-----------------------
satisfy at or before maturity (subject, where applicable, to specified grace
periods and, in the case of the trade payables, to normal payment practices) all
its obligations and liabilities of whatsoever nature, except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and Borrower shall have provided for such reserves as Agent may
reasonably deem proper and necessary.
7.9 Standards of Financial Statements. Cause all financial
---------------------------------
statements referred to in Sections 10.7, 10.8 and 10.9 to be complete and
correct in all material respects (subject, in the case of interim statements, to
normal year-end audit adjustments) and to be prepared in reasonable detail and
in accordance with GAAP applied consistently throughout the periods reflected
therein (except as concurred in by such reporting accountants or officer, as the
case may be, and disclosed therein).
7.10. Year 2000 Issue Compliance. Borrower shall have taken,
--------------------------
and shall have caused each of its Subsidiaries to take, all necessary action to
complete in all materials respects, no later than December 30, 1999, the
reprogramming of computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for Borrower and its
Subsidiaries or used or relied upon in the conduct of their businesses
(including systems and equipment supplied by others or with which such systems
of Borrower or any of its Subsidiaries interface) required to avoid the Year
2000 Issue to permit the proper
38
functioning of such computer systems and other equipment and the proper
processing of data, and the testing of such systems and equipment, as so
reprogrammed. At the request of Agent, Borrower shall provide, and shall cause
each of its Subsidiaries to provide, to Agent reasonable assurance of its
compliance with the preceding sentence. Borrower has developed adequate
contingency plans to assure uninterrupted and unimpaired business operation in
the event of a failure of its own or a third party's systems or equipment due to
the Year 2000 Issue, including those of vendors, customers, and suppliers, as
well as a general failure of or interruption in its communications and delivery
infrastructure.
VIII. NEGATIVE COVENANTS.
------------------
Borrower covenants and agrees that it shall not, until satisfaction
in full of the Obligations and termination of this Agreement:
8.1 Merger, Consolidation, Acquisition and Sale of Assets.
-----------------------------------------------------
(a) Enter into any merger, consolidation or other
reorganization with or into any other Person or acquire all or a substantial
portion of the assets or stock of any Person or permit any other Person to
consolidate with or merge with it; provided, however, that: (i) any Subsidiary
may merge or consolidate with or into Borrower or any Subsidiary so long as in
any merger or consolidation involving Borrower, Borrower shall be the surviving
or continuing corporation, and (ii) Borrower may consolidate or merge with or
acquire the assets or stock of any other Person if (x) Borrower shall be the
surviving or continuing corporation, (y) such Person is engaged in a business
similar to the current businesses of Borrower, and (z) after giving effect to
such merger, consolidation or acquisition, no Event of Default or Prospective
Event of Default shall have occurred.
(b) Sell, lease, transfer or otherwise dispose of any of
its properties or assets, except in the ordinary course of its business.
8.2 Creation of Liens. Create or suffer to exist any Lien,
-----------------
Charge, Claim or transfer upon or against any of its property or assets now
owned or hereafter acquired, except Permitted Encumbrances.
8.3 Guarantees. Become liable upon the obligations of any
----------
Person by assumption, endorsement or guaranty thereof or otherwise (other than
to Lenders) except (a) as disclosed on Schedule 8.3, (b) guarantees made in the
------------
ordinary course of business, (c) the endorsement of checks in the ordinary
course of business, and (d) guarantees made by Borrower to third parties of
obligations owing or to become owing by any Subsidiary or Affiliate of Borrower
to such third party which obligations of such Subsidiary or Affiliates are
included in the consolidated financial statements of TAG.
8.4 Investments. Purchase or acquire obligations or stock of,
-----------
or any other interest in, or make a contribution of any kind to, any Person,
except as permitted in Section 8.1 hereof, and (a) obligations issued or
guaranteed by the United States of America or any agency thereof, (b) commercial
paper with maturities of not more than one hundred eighty (180) days
39
and a published rating of not less than A-1 or P-1 (or the equivalent rating),
(c) certificates of time deposit and bankers' acceptances having maturities of
not more than one hundred eighty (180) days and repurchase agreements backed by
United States government securities of a commercial bank if (i) such bank has a
combined capital and surplus of at least $500,000,000, or (ii) its debt
obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency and (d) U.S. money market funds that invest solely in
obligations issued or guaranteed by the United States of America or an agency
thereof.
8.5 Loans. Make advances, loans or extensions of credit to any
-----
Person, including without limitation, any Parent, Subsidiary or Affiliate except
with respect to (a) the extension of commercial trade credit in connection with
the sale of Inventory in the ordinary course of its business, and (b) loans to
its employees in the ordinary course of business not to exceed the aggregate
amount of $1,000,000 at any time outstanding.
8.6 [INTENTIONALLY OMITTED]
8.7 Dividends. Declare, pay or make any dividend or
---------
distribution on any shares of the common stock or preferred stock of Borrower
(other than dividends or distributions payable in its stock, or split-ups or
reclassifications of its stock) or apply any of its funds, property or assets to
the purchase, redemption or other retirement of any common or preferred stock,
or of any options to purchase or acquire any such shares of common or preferred
stock of Borrower.
8.8 Indebtedness. Create, incur, assume or suffer to exist any
------------
Indebtedness (exclusive of trade debt) of Borrower except (i) in respect of (A)
Indebtedness to Lenders or (B) Indebtedness existing as of the date hereof and
disclosed on Schedule 8.8; (ii) as otherwise permitted pursuant to Section 7.8;
or (iii) Indebtedness incurred in connection with an acquisition permitted
pursuant to Section 8.1(a).
8.9 Nature of Business. Substantially change the nature of the
------------------
business in which it is presently engaged, nor except as specifically permitted
hereby purchase or invest, directly or indirectly, in any assets or property
other than in the ordinary course of business for assets or property which are
useful in, necessary for and are to be used in its business as presently
conducted.
8.10 Transactions with Affiliates. Directly or indirectly,
----------------------------
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with, any Affiliate, except disclosed
transactions in the ordinary course of business, on terms which would have been
obtainable from a Person other than an Affiliate.
8.11 Leases. Enter as lessee into any lease arrangement for
------
real or personal property if, after giving effect thereto, aggregate annual
rental payments for all leased property would exceed $5,000,000 in any one (1)
fiscal year, as determined on a consolidated basis.
40
8.12 Limitation on Losses. Incur on a consolidated basis a net
--------------------
loss before taxes and extraordinary items in any two (2) consecutive fiscal
quarter accounting periods.
8.13 Pledge of Credit Now or hereafter pledge Lenders' credit
----------------
on any purchases or for any purpose whatsoever or use any portion of any Advance
in or for any business other than Borrower's business as conducted on the date
of this Agreement.
IX. CONDITIONS PRECEDENT.
--------------------
9.1 Conditions to Initial Advance. The agreement of Lenders to make
-----------------------------
the initial Advance requested to be made on the Closing Date is subject to the
satisfaction, or waiver by Agent and Lenders, immediately prior to or
concurrently with the making of such Advances, of the following conditions
precedent:
(a) Note. Agent, on behalf of each Lender, shall have
----
received the Note payable to each Lender duly executed and delivered by an
authorized officer of Borrower;
(b) Filings Registrations and Recordings. Each document
------------------------------------
(including, without limitation, any Uniform Commercial Code financing statement)
required by this Agreement, any related agreement or under law or reasonably
requested by Agent to be filed, registered or recorded in order to create, in
favor of Agent on behalf of Secured Parties, a perfected security interest in or
lien upon the Collateral shall have been properly filed, registered or recorded
in each jurisdiction in which the filing, registration or recordation thereof is
so required or requested, and Agent shall have received an acknowledgment copy,
or other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(c) Corporate Proceedings of Borrower. Agent shall have
---------------------------------
received a copy of the resolutions in form and substance reasonably satisfactory
to Agent, of the Board of Directors of Borrower authorizing (i) the execution,
delivery and performance of this Agreement, the Notes (collectively the
"Documents") and (ii) the granting by Borrower of the security interests in and
liens upon the Collateral in each case certified by the Secretary or an
Assistant Secretary of Borrower as of the Closing Date; and, such certificate
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded as of the date of such certificate;
(d) Incumbency Certificates of Borrower. Agent shall
-----------------------------------
have received a certificate of the Secretary or any Assistant Secretary of
Borrower, dated the Closing Date, as to the incumbency and signature of the
officers of Borrower executing this Agreement, any certificate or other
documents to be delivered by it pursuant hereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary;
(e) Legal Opinion. Agent shall have received the
-------------
executed legal opinion of Manatt, Xxxxxx & Xxxxxxxx, LLP, in form and substance
satisfactory to Agent which shall cover such matters incident to the
transactions contemplated by this Agreement, the Notes, and related agreements
as Agent may reasonably require;
41
(f) No Litigation. Except as otherwise disclosed in
-------------
Schedule 9.1(f) (i), no litigation, investigation or proceeding before or by any
arbitrator or governmental authority shall be continuing or, to the knowledge of
Borrower, threatened against Borrower or against the officers or directors of
Borrower (A) in connection with the Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Agent, is deemed
material or (B) which if adversely determined, would, in the reasonable opinion
of Agent, have a material adverse effect on the business, assets, operations or
condition (financial or otherwise) of Borrower; and (ii) no injunction, writ,
restraining order or other order of any nature materially adverse to Borrower or
the conduct of its business shall have been issued by any governmental
authority;
(g) Financial Condition Opinions. Agent shall have
----------------------------
received executed Officer's Certificates of Borrower satisfactory in form and
substance to it, certifying the solvency of Borrower after giving effect to the
Indebtedness contemplated hereby and as to Borrower's financial resources and
its ability to meet its obligations and liabilities as they become due, to the
effect that as of the Closing Date:
(i) the assets of Borrower, at a fair valuation,
exceed the total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of Borrower;
(ii) current projections which are based on
underlying assumptions which provide a reasonable basis for the projections and
which reflect Borrower's judgment based on present circumstances, the most
likely set of conditions and Borrower's most likely course of action for the
period projected, demonstrate that Borrower will have sufficient cash flow to
enable it to pay its debts as they mature; and
(iii) Borrower does not have an unreasonably small
capital base with which to engage in its anticipated business.
For purposes of this subsection (i), the "fair valuation" of the assets of
Borrower shall be determined on the basis of the amount which may be realized
within a reasonable time, whether through collection or sale of such assets at
market value, conceiving the latter as the amount which could be obtained for
the property in question within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions;
(h) Collateral Examination. Agent shall have completed
----------------------
Collateral examinations, the results of which shall be satisfactory in form and
substance to Agent, of the Receivables, Inventory and General Intangibles of
Borrower and all books and records in connection therewith;
(i) Fees. Agent shall have received all fees payable and
----
accrued to Agent and Lenders on or prior to the Closing Date pursuant to Article
IV hereof;
42
(j) Pro Forma Financial Statements. Agent shall have
------------------------------
received a copy of the Pro Forma Financial Statements which shall be
satisfactory in all respects to Agent;
(k) Mortgage. Mortgagor shall have provided Secured
--------
Parties the Mortgage; provided, however, in the event that the Mortgage is not
completed by the Closing Date, Borrower shall have ninety (90) days therefrom to
cause the Mortgage to be executed by Mortgagor, and the security interest
therein perfected;
(l) Intercreditor Agreement. Intercreditor agreements in
-----------------------
form and substance acceptable to Agent executed by Hong Kong and Shanghai
Banking Corporation Limited and Standard Chartered Bank;
(m) Indemnity Letters. Indemnity Letters duly executed
-----------------
by The CIT Group/Commercial Services and Finova Capital Corporation, and agreed
to by Borrower;
(n) The Letter of Credit Supplement. The Letter of
-------------------------------
Credit Supplement duly executed by Borrower and GMAC;
(o) Other. All corporate and other proceedings, and all
-----
documents, instruments and other legal matters in connection with this Agreement
shall be satisfactory in form and substance to Agent and its counsel.
9.2 Conditions to Each Advance. The agreement of Lenders to
--------------------------
make any Advance requested to be made on any date (including, without
limitation, its initial Advance), is subject to the satisfaction of the
following conditions precedent as of the date such Advance is made:
(a) Representations and Warranties. Each of the
------------------------------
representations and warranties made by Borrower in or pursuant to this
Agreement, and any related agreements to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any related agreement shall be true and correct in all
material respects on and as of such date as if made on and as of such date;
(b) No Default. No Event of Default or Prospective Event
----------
of Default shall have occurred and be continuing on such date, or would exist
after giving effect to the Advances requested to be made, on such date,
provided, however that Lenders in their sole discretion, may continue to make
-----------------
Advances notwithstanding the existence of an Event of Default or Prospective
Event of Default;
(c) Maximum Advances. In the case of any Advances
----------------
requested to be made, after giving effect thereto, the aggregate Advances shall
not exceed the maximum Advances permitted under Section 2.2 hereof; and
(d) Borrowing Base Certificate. Agent shall have
--------------------------
received on or before the fifteenth (15) day of each month as and for the prior
month, a certificate,
43
substantially in the form of Exhibit D ("Borrowing Base Certificate"), detailing
Borrower's Factored Receivables, Eligible Receivables and Eligible Inventory on
which each requested Advance during such month is to be based, together with (i)
all supporting documentation required by Agent in order to calculate the
Borrowing Base, (ii) copies of invoices or the record of invoices from
Borrower's sales journal for such Receivables and a listing of the names and
addresses of the account debtors thereunder, (iii) copies of delivery receipts,
purchase orders, shipping instructions, bills of lading and other documentation
pertaining to such Receivables, and (iv) copies of the cash receipts journal
pertaining to the Borrowing Base Certificate.
Each request for an Advance by Borrower hereunder shall constitute a
representation and warranty by Borrower as of the date of such Advance that the
conditions contained in this subsection shall have been satisfied.
X. INFORMATION AS TO BORROWER.
--------------------------
Borrower covenants and agrees that it shall, until satisfaction in
full of the Obligations and the termination of this Agreement:
10.1 Disclosure of Material Matters. Promptly upon learning
------------------------------
thereof, report to Agent all matters materially affecting the value,
enforceability or collectibility of any portion of the Collateral including,
without limitation, Borrower's reclamation of, repossession of, or the return to
Borrower of a material amount of goods or claims or disputes asserted by any
Customer or other obligor. Borrower will not, without Agent's consent,
compromise or adjust any Receivables (or extend the time for payment thereof) or
accept any returns of merchandise or grant any additional discounts, allowances
or credits thereon except for those compromises, adjustments, returns,
discounts, credits and allowances as have been heretofore customary in the
business of Borrower.
10.2 Schedules. Deliver to Agent on or before the fifteenth
---------
(15th) day of each month as and for the prior month (a) accounts receivable
aging, (b) accounts payable schedules and (c) Inventory reports. In addition,
Borrower will deliver to Agent at such intervals as Agent may require: (i)
confirmatory assignment schedules, (ii) copies of Customer's invoices, (iii)
evidence of shipment or delivery, and (iv) such further schedules, documents
and/or information regarding the Collateral as Agent may require including,
without limitation, trial balances and test verifications. Agent shall have the
right to confirm and verify all Receivables by any manner and through any medium
it considers advisable and do whatever it may deem reasonably necessary to
protect its interests hereunder. The items to be provided under this Section are
to be in form satisfactory to Agent and executed by Borrower and delivered to
Agent from time to time solely for Agent's convenience in maintaining records of
the Collateral, and Borrower's failure to deliver any of such items to Agent
shall not affect, terminate, modify or otherwise limit Agent's lien on or
security interest in the Collateral.
10.3 Environmental Reports. Furnish Agent, concurrently with
---------------------
the delivery of the financial statements referred to in Sections 10.7 and 10.8
hereof, a certificate of Borrower signed by the President or Chief Financial
Officer of Borrower stating, to the best of his knowledge, that Borrower is in
compliance in all material respects with all Federal, state and
44
local laws relating to environmental protection and control and occupational
safety and health. To the extent Borrower is not in compliance with the
foregoing laws, the certificate shall set forth with specificity all areas of
non-compliance and the proposed action Borrower will implement in order to
achieve full compliance.
10.4 Litigation. Promptly notify Agent in writing of any
----------
material litigation affecting Borrower as defendant, whether or not the claim is
covered by insurance, and of any suit or administrative proceeding, which may
materially and adversely affect the Collateral or Borrower's business, assets,
operations, condition or prospects (financial or otherwise).
10.5 Occurrence of Defaults, etc. Promptly notify Agent in
---------------------------
writing upon the occurrence of (a) any Event of Default or Prospective Event of
Default of which it has actual knowledge;(b) any event, development or
circumstance whereby the financial statements most recently furnished to Agent
fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition and operating results of Borrower
as of the date of such financial statements; (c) any accumulated retirement plan
funding deficiency which, if such deficiency continued for two (2) plan years
and was not corrected as provided of which it has actual knowledge in Section
4971 of the Code; (d) each and every default by Borrower of which it has actual
knowledge which might result in the acceleration of the maturity of any
Indebtedness with respect to which there is a default existing or with respect
to which the maturity has been or could be accelerated, and the amount of such
Indebtedness; and (e) any other development in the business or affairs of
Borrower which would reasonably be expected to be materially adverse; in each
case describing the nature thereof and in the case of notification under clause
(a), (b), (c), (d), or (e) the action Borrower proposes to take with respect
thereto.
10.6 Government Receivables. Notify Agent promptly if any of
----------------------
its Receivables arise out of contracts between Borrower and the United States of
America, any state, or any department, agency or instrumentality of any of them.
10.7 Annual Financial Statements. Furnish Agent within ninety
---------------------------
(90) days after the end of each fiscal year of TAG, financial statements of TAG
and its Subsidiaries on a consolidated basis including, but not limited to,
statements of income and stockholders' equity and changes in financial position
from the beginning of the current fiscal year to the end of such fiscal year and
the balance sheet as at the end of such fiscal year, all prepared in accordance
with GAAP applied on a basis consistent with prior practices, and in reasonable
detail and reported upon without qualification by Ernst & Young, LLP or another
independent certified public accounting firm selected by TAG and satisfactory to
Agent (the "Accountants"). The report of such accounting firm shall be
accompanied by a statement of such accounting firm certifying that in making the
examination upon which such report was based either no information came to its
attention which to its knowledge constituted an Event of Default or a
Prospective Event of Default under this Agreement or any related agreement or,
if such information came to its attention, specifying any such default, and such
report shall contain or have appended thereto calculations which set forth
Borrower's compliance with the requirements or restrictions imposed by all
financial covenants.
45
10.8 Quarterly Financial Statements. Furnish Agent within
------------------------------
fifty (50) days after the end of each fiscal quarter, an unaudited balance sheet
of TAG and its Subsidiaries on a consolidated and consolidating basis and 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 quarter and for such quarter, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal year end adjustments. The reports shall be
accompanied by a certificate of Borrower substantially in the form of Exhibit E
(the "Compliance Certificate"), signed by the President and/or Chief Financial
Officer of Borrower, which shall state (i) whether an Event of Default or a
Prospective Event of Default has occurred, and, if any such default exists,
specifying the nature thereof and the action Borrower is taking and proposes to
take with respect thereto, and (ii) the information and computations (in
sufficient detail) to establish that Borrower is in compliance with all
financial covenants at the end of such quarter.
10.9 Monthly Financial Statements. Furnish Agent within
----------------------------
forty-five (45) days after the end of each month, an unaudited balance sheet of
TAG and its Subsidiaries on a consolidated and consolidating basis and 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, prepared on a basis
consistent with prior practices and complete and correct in all material
respects, subject to normal year end adjustments.
10.10 Other Reports. Furnish Agent as soon as available, but
-------------
in any event within thirty (30) days after the issuance thereof, with copies of
such financial statements, reports and returns as TAG shall send to its
stockholders.
10.11 Additional Information. Furnish Agent with additional
----------------------
information as Agent and any Lender shall reasonably request in order to enable
Agent and Lenders to determine whether the terms, covenants, provisions and
conditions of this Agreement and the Notes have been complied with by Borrower
including, without limitation and without the necessity of any request by Agent,
(a) copies of all environmental audits and reviews, (b) at least thirty (30)
days prior thereto, of Borrower's opening of any new office or place of business
or Borrower's closing of any existing office or place of business, and (c)
promptly upon Borrower's learning thereof, of any labor dispute to which
Borrower may become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any labor contract to which
Borrower is a party or by which Borrower is bound.
10.12 Projected Operating Budget. Furnish Agent, no less than
--------------------------
thirty (30) days prior to the beginning of each of Borrower's fiscal years
beginning with the year 2000, a month by month projected operating budget and
cash flow of Borrower for such fiscal year (including an income statement for
each month and a balance sheet as at the end of the last month in each fiscal
quarter), such projections to be accompanied by a certificate signed by
Borrower's President or Chief Financial Officer to the effect that such
projections have been prepared on the basis of sound financial planning practice
consistent with past budgets and financial statements and that such officer has
no reason to question the reasonableness of any material assumptions on which
such projections were prepared.
46
10.13 INTENTIONALLY OMITTED
10.14 Additional Documents. Execute and deliver to Agent, upon
--------------------
reasonable request, such documents and agreements as Agent may, from time to
time, reasonably request to carry out the purposes, terms or conditions of this
Agreement.
XI. EVENTS OF DEFAULT.
-----------------
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
(a) failure by Borrower to pay any principal or interest
on the Obligations within five (5) days of the date when due, whether at
maturity or by reason of acceleration pursuant to the terms of this Agreement or
by notice of intention to prepay, or by required prepayment or failure to pay
any other liabilities or make any other payment, fee or charge provided for
herein within five (5) days of the date when due;
(b) any representation or warranty made or deemed made
by Borrower in this Agreement or any related agreement or in any certificate,
document, or financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material
respect on the date when made or deemed to have been made;
(c) failure by Borrower to (i) furnish financial
information when due or when requested, or (ii) permit the inspection of its
books or records, after notice as herein provided;
(d) issuance of a notice of Lien, Charge, Claim, levy
assessment, injunction or attachment in excess of $250,000 against a material
portion of Borrower's property which is not stayed or lifted within sixty (60)
days;
(e) failure or neglect of Borrower to perform, keep or
observe any material term, provision, condition, covenant herein contained, or
contained in any other material agreement or arrangement, now or hereafter
entered into between Borrower and any Lender which failure is not remedied
within ten (10) days of written demand from Agent;
(f) any judgment is rendered or judgment liens filed
against Borrower for an amount in excess of $1,000,000 which within sixty (60)
days of such rendering or filing is not either satisfied, stayed or discharged
of record;
(g) Borrower or any Affiliate or any Subsidiary shall
(i) apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business, (iii) make a general assignment for the benefit of creditors,
(iv) commence a voluntary case under any state or Federal bankruptcy laws (as
now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vii) acquiesce to, or fail to have dismissed, within sixty
(60) days, any
47
petition filed against it in any involuntary case under such bankruptcy laws, or
(viii) take any action for the purpose of effecting any of the foregoing;
(h) there shall be a material default of the obligations
of Mortgagor under the Mortgage which default is not cured within any applicable
grace period;
(i) if any Lien created hereunder or provided for hereby
or under any related agreement for any reason ceases to be or is not a valid and
perfected Lien having a first priority interest;
(j) a material default of the obligations of Borrower
under any other agreement to which it is a party, including, without limitation,
obligations of Borrower to Hong Kong and Shanghai Banking Corporation and
Standard Chartered Bank, shall occur which materially and adversely affects its
condition, affairs or prospects (financial or otherwise) which default is not
cured within any applicable grace period;
(k) (i) The Principal Owner(s) shall fail to own,
directly or indirectly, at least ten percent (10%) of the common stock of TAG;
or (ii) Xxxxxx Xxxx shall cease, for any reason, to be a member of the Board of
Directors and Chief Executive Officer of TAG;
(l) The Dilution of Receivables, on an averaged basis
for the most recent three (3) months, is greater than fifteen percent (15%), as
calculated by Agent on the basis of the Borrowing Base certificates for such
period or from Collateral audits performed by Agent; or
(m) any material provision of this Agreement shall, for
any reason, cease to be valid and binding on Borrower, or Borrower shall so
claim in writing to Agent of any Lender.
XII. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
------------------------------------------
12.1 Rights and Remedies. Upon a Prospective Event of Default
-------------------
under Article XI (d) or (f), until the Prospective Event of Default is remedied
within the time periods provided for therein, Lenders and Issuers shall not be
required to make any additional Advances or any Letters of Credit, as the case
may be, available to Borrower; upon the occurrence of an Event of Default
pursuant to Article XI(g) hereof all Obligations shall be immediately due and
payable and Lenders and Issuer shall have no obligation to make any additional
Advances or any Letters of Credit, as the case may be, available to Borrower and
this Agreement shall be deemed terminated; and, upon the occurrence of any of
the other Events of Default and at any time thereafter (such default not having
previously been cured), at the option of Majority Lenders all Obligations shall
be immediately due and payable, neither Lenders nor Issuer shall be obligated to
make any additional Advances or any Letters of Credit, as the case may be,
available to Borrower hereunder and Majority Lenders shall have the right to
terminate this Agreement and the principal balance of outstanding Advances and
interest accrued but unpaid thereon and the aggregate contingent liability of
Borrower to reimburse Lenders for future drawings with respect to outstanding
Letters of Credit and all other Obligations shall become immediately due and
48
payable, without demand upon or presentment to Borrower, which are expressly
waived by Borrower, and Agent and Lenders may immediately exercise all rights,
powers and remedies available to them at law, in equity or otherwise. All
amounts paid by Borrower on account of the aggregate contingent liability of
Borrower under outstanding Letters of Credit shall be held by Agent as
collateral security for the benefit of Issuer and Lenders until there are no
Letters of Credit outstanding and all unrepaid drawings have been paid in full
with interest thereon as provided herein, Borrower hereby being automatically
deemed to have granted to Agent, Issuer and Lenders a first priority, perfected
security interest in all such monies and to have authorized Agent to debit such
monies in satisfaction of the obligation of Borrower to repay drawings;
provided, that, nothing contained herein shall in any manner or to any extent
affect the liability of Borrower with respect to drawings in the event for
whatever reason Agent does not so debit such monies on account thereof. In any
such event, Agent shall have the right to exercise any and all other rights and
remedies provided for herein, under the Uniform Commercial Code and at law or
equity generally, including, without limitation, the right to foreclose the
security interests granted herein and to realize upon any Collateral by any
available judicial procedure or to take possession of and sell any or all of the
Collateral with or without judicial process. Agent may enter any of Borrower's
premises or other premises without legal process and without incurring liability
to Borrower therefor, and Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as Agent may deem advisable and Agent may require Borrower to make
the Collateral available to Agent at a convenient place. With or without having
the Collateral at the time or place of sale, Agent may sell the Collateral, or
any part thereof, at public or private sale, at any time or place, in one or
more sales, at such price or prices, and upon such terms, either for cash,
credit or future delivery, as Agent may elect. Except as to that part of the
Collateral which is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market, Agent shall give Borrower
reasonable notification of such sale or sales, it being agreed that in all
events written notice mailed to Borrower at least five (5) days prior to such
sale or sales is reasonable notification. At any public sale Agent may bid for
and become the purchaser, and Agent or any other purchaser at any such sale
thereafter shall hold the Collateral sold absolutely free from any claim or
right of whatsoever kind, including any equity of redemption and such right and
equity are hereby expressly waived and released by Borrower. In connection with
the exercise of the foregoing remedies, Agent is granted permission to use all
Borrower's trademarks, trade styles, trade names, patents, patent applications,
licenses, franchises and other proprietary rights which are used in connection
with (a) Inventory for the purpose of disposing of such Inventory and (b)
equipment for the purpose of completing the manufacture of unfinished goods. The
proceeds realized from the sale or other disposition of any Collateral (other
than Factored Receivables, which shall be collected pursuant to Article III)
shall be applied as follows:
(i) First, to the costs, expenses and attorneys' fees
and expenses incurred by Agent in the performance of its duties and
enforcement of the rights of Secured Parties hereunder, including, without
limitation, all costs and expenses of collection, attorneys' fees, court
costs and foreclosure expenses;
(ii) Then, to Lenders, pro rata in accordance with their
respective Revolving Percentages, until all outstanding Advances and
unrepaid drawings under Letter of Credit and interest accrued thereon have
been paid in full, said amounts to
49
be allocated first to interest and then, but only after all accrued
interest has been paid in full, to principal of Advances and unrepaid
drawings under Letters of Credit;
(iii) Then, except to the extent otherwise provided for
herein, to Lenders (pro rata in accordance with their respective Revolving
Percentages) and Issuer on account of all other outstanding Obligations;
(iv) Then, if but only if there remain outstanding any
Letters of Credit, to Agent to hold as cash collateral for the obligations
of Borrower to reimburse any future drawings under such Letters of Credit
(including the obligations of Borrower to reimburse GMAC under the Letter
of Credit Supplement), as provided above;
(v) Then, except as to Factored Receivables, which are
to be collected as provided in Article III, to Factor on account of any
Obligations owing to the Factor hereunder; and
(vi) Then, to Borrower and such Persons as may be
legally entitled thereto.
in the event of any inconsistency between the allocation methodology set forth
above and any other term or provision of this Agreement or the Other Documents,
the allocation methodology set forth above shall govern and supersede. If any
deficiency shall arise, Borrower shall remain liable therefor.
12.2 Majority Lenders Discretion. Majority Lenders shall have
---------------------------
the right in their sole discretion to determine which rights, Liens, security
interests or remedies Agent may at any time pursue, relinquish, subordinate, or
modify or to take any other action with respect thereto and such determination
will not in any way modify or affect any of Agent's and Secured Parties' rights
hereunder.
12.3 Setoff. In addition to any other rights which Secured
------
Parties may have under applicable law, upon the occurrence of any Event of
Default hereunder, each Secured Party shall have a right to apply any of
Borrower's property held by such Secured Party to reduce the Obligations;
provided however, whether or not an Event of Default has occurred hereunder,
neither Factor nor any Lender (including any Lender acting in its capacity as
factor under separate credit arrangements with Borrower) will exercise any right
of setoff for ledger debts.
12.4 Rights and Remedies not Exclusive. The enumeration of the
---------------------------------
foregoing rights and remedies is not intended to be exhaustive and the exercise
of any right or remedy shall not preclude the exercise of any other right or
remedies, all of which shall be cumulative and not alternative.
XIII. THE AGENT.
---------
13.1 Appointment and Authorization. Each Lender irrevocably
-----------------------------
appoints and authorizes Agent to take such action on its behalf and to exercise
such powers under this Agreement and the Other Documents as are delegated to
Agent by the terms hereof or
50
thereof, together with all such powers as are reasonably incidental thereto. The
duties of Agent to each Lender shall be mechanical and administrative in nature
and Agent shall not by reason of this Agreement or otherwise be a trustee or a
fiduciary for any of Lenders.
13.2 Agent and Affiliates. Agent shall have the same rights
--------------------
and powers under this Agreement as any other Lender and may exercise or refrain
from exercising the same as though it were not Agent, and Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with Borrower or any Subsidiary or Affiliate of Borrower as if
were not Agent hereunder.
13.3 Action by Agent. The obligations of Agent hereunder and
---------------
under the Other Documents are only those expressly set forth herein and therein.
Without limiting the generality of the foregoing, Agent shall not be required to
take any action with respect to any Event of Default, except as expressly
provided in Article 11 hereof.
13.4 Consultation with Experts. Agent may consult with legal
-------------------------
counsel, independent public accountants and other experts selected by it and
shall not be liable to Lenders for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel, accountants or
experts.
13.5 Liability of Agent. Neither Agent nor any of its
------------------
directors, officers, agents, or employees shall be liable for any action taken
or not taken by it in connection herewith or in connection with any Other
Documents (i) with the consent or at the request of the Majority Lenders or (ii)
in the absence of its own gross negligence or willful misconduct. Neither Agent
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into or verify (a) any statement,
warranty or representation made in connection with this Agreement or any Advance
hereunder or in connection with any Other Documents; (b) the performance or
observance of any of the covenants or agreements of Borrower; (c) the
satisfaction of any condition specified in Article IX; or (d) the validity,
effectiveness or genuineness of any of the Other Documents or any other
instrument or writing furnished in connection herewith or therewith. Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties. As to any matters not expressly provided for by this
Agreement, Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any Other Document in accordance with
instructions signed by the Majority Lenders and such instructions of the
Majority Lenders and any action taken or failure to act pursuant thereto shall
be binding on all of Lenders.
13.6 Indemnification. Each Lender shall, in the amount of its
---------------
Revolving Percentage indemnify Agent (to the extent not reimbursed by Borrower)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from Agent's gross
negligence or willful misconduct) that Agent may suffer or incur in connection
with this Agreement or any Other Document or any action taken or omitted by
Agent hereunder or thereunder.
51
13.7 Failure to Act. Except for action expressly required of
--------------
Agent hereunder or under any Other Document Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be indemnified
to its satisfaction by Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
13.8 Credit Decision. Each Lender acknowledges that it has,
---------------
independently and without reliance upon Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and each Other Document to
which it is a party. Each Lender also acknowledges that it will, independently
and without reliance upon Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this Agreement or
under any Other Document.
13.9 Additional Lenders. From time to time additional
------------------
financial institutions may, with the written consent of Agent and Borrower,
become a Lender under this Agreement upon the execution and delivery to Agent of
a Lender Assignment Agreement, substantially in the form of Exhibit F. Upon
receipt of such executed agreement. Agent shall revise Exhibit A to this
Agreement and distribute same to all parties hereto and Borrower shall execute
and deliver a Note to the new Lender evidencing its Revolving Percentage.
13.10 Information to Lenders. Agent agrees to provide Lenders
----------------------
with copies of all documents, statements and accountings provided by Agent to
Borrower, copies of any field audit or examination report prepared by or on
behalf of Agent, and copies of all documents and statements received by Agent
from Borrower.
13.11 Payments.
--------
(a) All amounts received by Agent on account of the
Obligations shall be disbursed by Agent to Lenders pro rata in accordance with
their respective Revolving Percentages by wire transfer on the date of receipt
if received and confirmed by Agent before 11:00 a.m. (New York time) or if
received and confirmed later, by 12:00 noon (New York time) on the next
succeeding Business Day. In the event that Agent fails to distribute such
amounts as provided above, Agent shall pay interest on such amount at a rate per
annum equal to the Federal Funds Effective Rate (calculated for the purposes of
this section only based on overnight Federal funds transactions) from time to
time in effect.
(b) If, in the opinion of Agent the distribution of any
amounts received by it in such capacity hereunder, under the Notes or under any
of the Other Documents might involve it in liability, it may refrain from making
such distribution until its right to make such distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by Agent is
to be repaid, each Person to whom any such distribution shall have been made
shall either repay to Agent its Revolving Percentage of the amount so adjudged
to be repaid or shall pay over the same in such manner and to such Persons as
shall be determined by such court.
52
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the Other Documents, any Lender that fails (i) to make
available to Agent its Revolving Percentage of any Advance when all conditions
precedent have been met under Section 9.2 hereof, or (ii) to comply with any of
its obligations under this Agreement, shall be deemed delinquent (a "Delinquent
Bank") and shall be deemed a Delinquent Bank until such time as such delinquency
is satisfied. A Delinquent Bank shall not have a right of consent or to vote, as
applicable, on any matters for which a vote or consent of Lenders or Majority
Lenders is required, except as to those items identified in Section 16.3 that
require consent of all Lenders, but shall be bound by such vote or consent of
those Majority Lenders who are eligible to vote and consent. A Delinquent Bank
shall be deemed to have assigned any and all payments due to it from Borrower,
whether on account of an outstanding Advance, interest, fees or otherwise, to
the remaining non-delinquent Lenders for application to, and reduction of, their
respective Revolving Percentage of all outstanding Advances in accordance with
the terms of this Agreement. The Delinquent Bank hereby authorizes Agent to
distribute such payments to the non-delinquent Lenders in proportion to their
respective Revolving Percentage of all outstanding Advances in accordance with
the terms of this Agreement. A Delinquent Bank shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Advances of the non-delinquent Lenders or as a
result of other payments by the Delinquent Bank to the non-delinquent Lenders,
Lenders' respective Revolving Percentage of all outstanding Advances have
returned to those in effect immediately prior to such delinquency and without
giving effect to the non-payment causing such delinquencies.
XIV. WAIVERS AND JUDICIAL PROCEEDINGS.
--------------------------------
14.1 Waiver of Notice. Borrower hereby waives notice of
----------------
non-payment of any of the Receivables, demand, presentment, protest and notice
thereof with respect to any and all instruments, notice of acceptance hereof,
notice of loans or advances made, credit extended, Collateral received or
delivered, or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly provided for
herein.
14.2 Delay. No delay or omission on Agent's or any Lender's
-----
part in exercising any right, remedy or option shall operate as a waiver of such
or any other right, remedy or option or of any default.
14.3 Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY
-----------
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT
53
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
XV. EFFECTIVE DATE AND TERMINATION.
------------------------------
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.
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; provided, however, there shall be
no prepayment fee payable upon termination.
15.2 Termination. The termination of this Agreement shall not
-----------
affect any of Borrower's or Agent's or any Secured Parties' rights, or any of
the Obligations having their inception prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations
have been full disposed of, concluded or liquidated. The security interests,
Liens and rights granted to Agent on behalf of Secured Parties hereunder and the
financing statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrower's
account may from time to time be temporarily in a zero or credit position, until
all of the Obligations of Borrower have been paid or performed in full after the
termination of this Agreement or Borrower has furnished Secured Parties with an
indemnification satisfactory to Agent with respect thereto. Accordingly,
Borrower waives any rights which it may have under Section 9-404(1) of the
Uniform Commercial Code to demand the filing of a termination statement with
respect to the Collateral, and Agent shall not be required to send such
termination statements to Borrower, or to file them with any filing office,
unless and until this Agreement shall have been terminated in accordance with
its terms and all Obligations paid in full in immediately available funds. All
representations, warranties, covenants, waivers and agreements contained herein
shall survive termination hereof until all Obligations are repaid or performed
in full unless otherwise provided.
XVI. MISCELLANEOUS.
-------------
16.1 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of California (without giving
effect to its conflict of laws rules). Any judicial proceeding brought by or
against Borrower with respect to any of the Obligations, this Agreement or any
related agreement may be brought in any court of competent jurisdiction in the
State of California, United States of America, and, by execution and
54
delivery of this Agreement, Borrower accepts for itself and in connection with
its properties, generally and unconditionally the non-exclusive jurisdiction of
the aforesaid courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. Nothing herein shall affect
the right to serve process in any manner permitted by law or shall limit the
right of Agent and Lenders to bring proceedings against Borrower in the courts
of any other jurisdiction. Borrower waives any objection to jurisdiction and
venue of any action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. Any
----- --- ----------
judicial proceedings by Borrower against Agent, Lenders and Factor involving,
directly or indirectly, any matter or claim in any way arising out of, related
to or connected with this Agreement or any related agreement, shall be brought
only in a Federal or state court located in the City of Los Angeles, State of
California.
16.2 Entire Understanding. This Agreement and the documents
--------------------
executed concurrently herewith contain the entire understanding between
Borrower, Agent, Issuer, Factor and Lenders and supersedes all prior agreements
and understandings, if any, relating to the subject matter hereof. Any promises,
representations, warranties or guarantees not herein contained and hereinafter
made shall have no force and effect unless in writing, signed by Borrower's,
Agent's and Lenders' respective officers. Neither this Agreement nor any portion
or provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, canceled or terminated orally or by any course of dealing, or in any
manner other than by an agreement in writing, signed by the party to be charged.
Borrower acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
16.3 Amendments and Waivers. With the written consent of
----------------------
Majority Lenders, Agent and Borrower may, subject to the provisions of this
subsection, from time to time enter into agreements amendatory or supplemental
hereto; provided, however, that no such amendatory or supplemental agreement or
waiver shall, without the written consent of all Lenders (i) extend the maturity
of any Note, (ii) reduce the interest rate or extend the time of payment of
interest thereon, (iii) reduce or extend the time of payment of the principal
amount thereof, (iv) release any of the Collateral, except as expressly
permitted hereunder (v) increase the Borrowing Base advance rates or Overadvance
Limit, (vi) change any Lender's Revolving Percentage, (vii) change the
definition of Majority Lenders; (viii) modify the allocation methodology set
forth in Section 12.1, (ix) change the definition of Maximum Credit Amount, (x)
modify Section 12.3, or (xi) modify this Section 16.3;
and provided, further, that any amendment or waiver to Sections 2.7, 2.8 and 2.9
requires the approval of Issuer and any amendment or waiver to any provision of
Article III requires the approval of Factor. Any such amendatory or supplemental
agreement or waiver shall apply equally to each Lender and shall be binding upon
Borrower, Lenders, Issuer, Factor and Agent.
55
16.4 Successors and Assigns; Participants; New Lenders.
-------------------------------------------------
(a) This Agreement shall be binding upon and inure to
the benefit of Borrower, Agent, Lenders, all future holders of the Notes and
their respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Lenders.
(b) Any Lender may sell, assign or transfer all or any
part of its rights under this Agreement and its Note and all related agreements,
instruments and documents provided Borrower is given notice of such sale as soon
as practicable and the transferee agrees to perform the obligations of the
transferor; in addition to the foregoing, Borrower acknowledges that in the
regular course of commercial banking business any Lender may at any time and
from time to time sell participating interests in the Advances to other
financial institutions (each such transferee or purchaser of a participating
interest, a "Transferee"). Each Transferee may exercise all rights of payment
(including without limitation rights of set-off) with respect to the portion of
such Advances held by it or other Obligations payable hereunder as fully as if
such Transferee were the direct holder thereof.
16.5 Application of Payments. Each Lender shall have the
-----------------------
continuing and exclusive right to apply or reverse and reapply any and all
proceeds of Collateral to any portion of the Obligations, but subject to the
provisions of Section 12.1 hereof. To the extent that Borrower makes a payment
or any Lender receives any payment or proceeds of the Collateral for Borrower's
benefit, which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by such Lender.
16.6 Indemnity. Borrower shall indemnify each Secured Party
---------
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, fees and disbursements
of counsel) which may be imposed on, incurred by, or asserted against such
Secured Party in any litigation, proceeding or investigation instituted or
conducted by any governmental agency or instrumentality or any other Person with
respect to any aspect of, or any transaction contemplated by, or referred to in,
or any matter related to, this Agreement, whether or not such Secured Party is a
party thereto, except to the extent that any of the foregoing arises out of the
willful misconduct or gross negligence of such Lender. The provisions of this
Section 16.6 shall survive termination of this Agreement.
16.7 Notice. Any notice or request hereunder may be given to
------
the parties hereto at their respective addresses set forth opposite its name on
the signature pages hereof or at such other address as may hereafter be
specified in a notice designated as a notice of change of address under this
Agreement. Any notice or request hereunder shall be given by (a) hand delivery,
(b) registered or certified mail, return receipt requested, (c) telex or
telegram, subsequently confirmed by registered or certified mail, or (d) telefax
to the number set out below (or such other number as may hereafter be specified
in a notice designated as a notice of change of address) with telephone
communication to a duly authorized officer of the recipient
56
confirming its receipt as subsequently confirmed by registered or certified
mail. Notices and requests shall, in the case of those by mail or telegram. be
deemed to have been given when deposited in the mail, or delivered to the
telegraph office addresses as provided in this Section.
16.8 Survivability. If all or any part of this Agreement is
-------------
contrary to, prohibited by, or deemed invalid under applicable laws or
regulations, such provision shall be inapplicable and deemed omitted to the
extent so contrary, prohibited or invalid, but the remainder hereof shall not be
invalidated thereby and shall be given effect so far as possible.
16.9 Expenses. All costs and expenses including, without
--------
limitation reasonable attorneys' fees incurred (a) by each Secured Party in all
efforts made to enforce payment of any Obligation or effect collection of any
Collateral, or (b) incurred in connection with the entering into, modification,
amendment, administration and enforcement of this Agreement or any consents or
waivers hereunder and all related agreements, documents and instruments, or (c)
the instituting, maintaining, preserving, enforcing and foreclosing of or on
Secured Parties' security interest or Lien in any of the Collateral, whether
through judicial proceedings or otherwise, or (d) in defending or prosecuting
any actions or proceedings arising out of or relating to the transactions with
Borrower, or (e) any advice given any Secured Party with respect to its rights
and obligations under this Agreement and all related agreements, may be charged
to Borrower's account and shall be part of the Obligations.
16.10 Injunctive Relief. Borrower recognizes that, in the
-----------------
event Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Secured Parties; therefore, Secured Parties if Secured Parties so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
16.11 Joint and Several Obligations.
-----------------------------
(a) Each Borrower agrees that they are jointly and severally
liable to each Secured Party for the payment of all obligations of such Borrower
arising under this Agreement, the Notes and Other Documents and that such
liability is independent of the obligations of any other Borrower. Agent or
Secured Parties may bring action against any Borrower regardless of whether an
action is brought against any other Borrower.
(b) Each Borrower agrees that any release which may be given
by Agent or Secured Parties to any other Borrower or any guarantor will not
release such Borrower from its obligations under this Agreement, the Notes and
Other Documents.
(c) Each Borrower waives any right to assert against Agent and
Secured Parties any defense, setoff, counterclaim or claim which such Borrower
may have against any other Borrower or any other party liable to Agent and
Secured Parties for the obligations of Borrowers under this Agreement, the Notes
and Other Documents.
(d) Each Borrower agrees that it is solely responsible for
keeping itself informed as to the financial condition of any other Borrower and
of all circumstances which bear upon the risk of loss or nonpayment. Each
Borrower waives any right it may have to require
57
Agent or any Secured Party to disclose to such Borrower any information which
Agent or such Secured Party may now or hereafter acquire concerning the
financial condition of any other Borrower.
(e) Each Borrower waives protest, presentment, demand for
payment, all rights to notices of default or nonpayment or nonperformance by or
notice of dishonor to or upon any other Borrower under this Agreement, the Notes
and Other Documents. Each Borrower waives all right to notices of the existence
or the creation of any new indebtedness by any other Borrower.
(f) Each Borrower hereby expressly waives: (i) all rights and
benefits under Section 2809 of the California Civil Code purporting to reduce
Borrower's obligation in proportion to the principal obligation owed by any
other Borrower, and any defense based on or arising out of any defense the
Person primarily liable may have to payment or to performance of any covenants
or obligations; (ii) all rights and benefits under Section 2845 of the
California Civil Code which, among other things, permits a surety to require any
creditor to pursue its debtor, any security which said creditor may hold, or any
other remedy before proceeding against such surety; (iii) any and all other
rights, benefits, protections and other defenses which Borrower may have, now or
at any time hereafter, to full payment or performance of the Obligations,
including, without limitation, under California Civil Code Sections 2809, 2810,
2819, 2820, 2821, 2839, 2845, 2847, 2848, 2849, 2850 and 2855, and California
Code of Civil Procedure Sections 580a, 580b, 580d and 726, and all successor
sections; and (iv) each Borrower hereby specifically waives the provisions of
California Civil Code Section 2815, and any successor section, with respect to
all security for the obligations of Borrower hereunder.
(g) Each Borrower represents and warrants to Agent and Secured
Parties that it will derive benefit, directly and indirectly, from the
collective administration and availability of the credit facilities. Each
Borrower agrees that neither Agent nor any Secured Party will be required to
inquire as to the disposition by any Borrower of funds disbursed in accordance
with the terms of this Agreement or the Other Documents.
(h) Until all Obligations of Borrower to Agent and Secured
Parties under this Agreement, the Notes and Other Documents have been paid in
full, each Borrower waives any right of subrogation, reimbursement,
indemnification and contribution (contractual, statutory or otherwise),
including without limitation, any claim or right of subrogation under the
Bankruptcy Code (Title 11, United States Code) or any successor statute which
such Borrower may now or hereafter have against any other Borrower with respect
to the indebtedness incurred under this Agreement, the Notes and Other
Documents. Each Borrower waives any right to enforce any remedy which Agent or
any Secured Party now has or may hereafter have against any other Borrower and
waives any benefit of, and any right to participate in, any security now or
hereafter held by Agent and Secured Parties.
16.12 Captions. The captions at various places in this
--------
Agreement are intended for convenience only and do not constitute and shall not
be interpreted as part of this Agreement.
16.13 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which taken together shall constitute one and the
same instrument.
58
Each of the parties has signed this Agreement as of the 21st day of
January, 2000.
TARRANT APPAREL GROUP dba
Fashion Resource, a California corporation
By: /s/ [ILLEGIBLE]
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
TAG MEX, INC.
By: /s/ [ILLEGIBLE]
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
GMAC COMMERCIAL CREDIT LLC, as
Agent, Lender, Issuer and Facto
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
FINOVA CAPITAL CORPORATION
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
SANWA BANK CALIFORNIA
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
59
Each of the parties has signed this Agreement as of the 21st day of
January, 2000.
TARRANT APPAREL GROUP dba
Fashion Resource, a California corporation
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
TAG MEX, INC.
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
GMAC COMMERCIAL CREDIT LLC, as
Agent, Lender, Issuer and Facto
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: SVP
----------------------------------------
--------------------------------------------
Address
FINOVA CAPITAL CORPORATION
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
SANWA BANK CALIFORNIA
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
59
Each of the parties has signed this Agreement as of the 21st day of
January, 2000.
TARRANT APPAREL GROUP dba
Fashion Resource, a California corporation
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
TAG MEX, INC.
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
GMAC COMMERCIAL CREDIT LLC, as
Agent, Lender, Issuer and Facto
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
FINOVA CAPITAL CORPORATION
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
SANWA BANK CALIFORNIA
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Vice President
----------------------------------------
000 Xx. Xxxxxxx Xx. 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
--------------------------------------------
Address
59
Each of the parties has signed this Agreement as of the 21st day of
January, 2000.
TARRANT APPAREL GROUP dba
Fashion Resource, a California corporation
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
TAG MEX, INC.
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
GMAC COMMERCIAL CREDIT LLC, as
Agent, Lender, Issuer and Facto
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
FINOVA CAPITAL CORPORATION
By: /s/ Xxxx X. Noosey
----------------------------------------
Its: Vice President
----------------------------------------
000 X. XXXXX XXX
XX XX 00000
--------------------------------------------
Address
SANWA BANK CALIFORNIA
By:
----------------------------------------
Its:
----------------------------------------
--------------------------------------------
Address
59
EXHIBIT A
LENDER COMMITMENT REVOLVING
------ ---------- ---------
AMOUNT PERCENTAGE
------ ----------
GMAC Commercial Credit $ 50,000,000 47.619%
LLC
Finova Capital $ 40,000,000 38.095%
Corporation
Sanwa Bank California $ 15,000,000 14.286%
------------ -------
TOTAL $105,000,000 100.000%
EXHIBIT B
REVOLVING NOTE
$ ______________________ ______________________, 2000
FOR VALUE RECEIVED, the undersigned, Tarrant Apparel Group dba Fashion
Resource, a California corporation, and Tag Mex, Inc., a California corporation
(individually and collectively the "Borrower"), jointly and severally
unconditionally promise to pay to the order of _____________________________
__________________ (the "Lender") on January 31, 2005, the principal sum of
_____________________________ ($_____________________________) or, if less, the
aggregate unpaid principal amount of all Revolving Advances outstanding from
Lender pursuant to that certain Revolving Credit, Factoring and Security
Agreement, dated as of January ___, 2000, among Borrower, the various financial
institutions (including Lender) as are, or may become, parties thereto
(collectively, the "Lenders"), and GMAC Commercial Credit, LLC, as agent for
Lenders (in such capacity, the "Agent") as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time
(collectively, the "Credit Agreement").
Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from and including the date hereof until
maturity (whether by acceleration or otherwise) and, after maturity, until paid,
at the rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made without setoff or
counterclaim in lawful money of the United States of America in same day or
immediately available funds to the account designated by Agent pursuant to the
Credit Agreement.
This Note is one of the Revolving Notes referred to in, and evidences
Obligations incurred under, the Credit Agreement, to which reference is made for
a description of the security for this Note and for a statement of the terms and
conditions on which repayments of principal of the Obligations evidenced by this
Revolving Note and on which such Obligations may be declared to be or shall
automatically become immediately due and payable. Unless otherwise defined,
capitalized terms used herein have the meanings provided in the Credit
Agreement.
Borrower hereby authorizes Lender to make (or cause to be made)
appropriate notations on the grid attached to Lender's Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of, the outstanding principal of, and the interest rate
applicable to, the Revolving Advances evidenced hereby. Such notations shall be
rebuttably correct and binding
-1-
on Borrower in the absence of manifest error; provided, however, that the
failure of Lender to make any such notations shall not limit or otherwise affect
any Obligations of Borrower.
All parties hereto, whether as makers, endorsers, or otherwise, jointly
and severally waive presentment for payment, demand, protest and notice of
dishonor.
THIS REVOLVING NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
TARRANT APPAREL GROUP,
dba Fashion Resource,
a California corporation
By:____________________________________
Name:______________________________
Title:______________________________
TAG MEX, INC., a California corporation
By:____________________________________
Name:______________________________
Title:______________________________
-2-
REVOLVING ADVANCES AND PRINCIPAL PAYMENTS
====================================================================================================================================
Amount of Revolving Advance Made Amount of Principal Repaid Unpaid Principal Balance
------------------------------------------------------------------------------------------------- Notation
Date Base Rate LIBOR Rate Base Rate LIBOR Rate Base Rate LIBOR Rate Total Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
-3-
EXHIBIT C
REQUEST FOR ADVANCE
Date:__________
GMAC Commercial Credit LLC,
as Agent for the Lenders
as defined in the Revolving
Credit, Factoring and Security
Agreement referred to below
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: ____________________
Ladies and Gentlemen:
The undersigned refers to the Revolving Credit, Factoring and Security
Agreement dated as of ___________, 2000 (the "Credit Agreement," the terms
defined therein being used herein as therein defined or as defined in the Notes
issued pursuant to the Credit Agreement) by and among Tarrant Apparel Group, dba
Fashion Resource, a California corporation, and Tag Mex, Inc., a California
corporation (individually and collectively, "Borrower"), certain financial
institutions who are or who may later become a party thereto (collectively
"Lenders" and individually "Lender") and GMAC Commercial Credit LLC, as agent
for Lenders (in such capacity "Agent") under the Credit Agreement, and hereby
gives you notice pursuant to Section 2.3(c) of the Credit Agreement, that the
undersigned hereby requests an Advance under the Credit Agreement and the Notes,
and in that connection sets forth below the information relating to such Advance
as required in the Credit Agreement:
1. (a) [If applicable] The Business Day for a requested Base Rate
Advance is ________.
(b) [If applicable] The Business Day for a requested LIBOR Rate
Advance is _________.
2. The aggregate amount of the requested Advance is $ ______________.
3. The requested Advance is to be comprised of:
(__) A Base Rate Advance in the amount of $ ____________.
(__) A LIBOR Rate Advance in the amount of $____________.
4. (If applicable) Agent is directed to apply the requested Advance to
repay [the specified principal amount of the outstanding Advances set forth
below [, together with accrued interest thereon]] [accrued interest on the
outstanding Advances set forth below], and to remit the remainder (if any) of
the requested Advance to Borrower:
(a) [$ _________/all] of the outstanding principal amount of the
Base Rate Advances;
(b) [$ ______/all] of the outstanding principal amount of the
LIBOR Rate Advance maturing on _________.
5. Borrower certifies that (i) the representations and warranties
contained in the Credit Agreement are true, correct and complete in all material
respects on and as of the date hereof; (ii) no Event of Default or Prospective
Event of Default has occurred and is continuing under the Credit Agreement or
would exist after giving effect to the Advances requested hereunder; (iii)
Borrower has performed in all material respects all agreements and satisfied all
conditions under the Credit Agreement provided to be performed by it on or
before the date hereof; and (iv) after giving effect to the Advances requested
hereunder, the aggregate Advances outstanding under the Credit Agreement shall
not exceed the maximum advances permitted under Section 2.2 of the Credit
Agreement.
Date: ______________________________
BORROWER:
TARRANT APPAREL GROUP,
dba Fashion Resource
a California corporation
By: ____________________________________
Name:___________________________________
Title:__________________________________
TAG MEX, INC., a California corporation
By: ____________________________________
Name:___________________________________
Title:__________________________________
EXHIBIT D
FORM OF BORROWING BASE CERTIFICATE
GMAC
COMMERCIAL CREDIT LLC
Report
Number S-
-------------------------------------------------------------
Daily Status of
Obligations as of
------------------------------------------------------------------------------------------------------------------------------------
Client Maximum Line of Credit
------------------------------------------------------------------------------------------------------------------------------------
Accounts Receivable
We herewith report to you the full amount collected on accounts or -------------------------------------------------------------
other receivables assigned to you up to , 19 for which Inventory
we herewith remit. We have made no other collections nor issued or -------------------------------------------------------------
should have issued any other credits since our last report. Other
-------------------------------------------------------------
Signature Date Total
===================================================================== -------------------------------------------------------------
Loans Other Obligations Total Obligations
--------------------------------------------
1. Today's Request
a. Advance
---------------------------------------------------------------------------------------------------------------
b. Other
---------------------------------------------------------------------------------------------------------------
c.
---------------------------------------------------------------------------------------------------------------
d. Today's Total Request
---------------------------------------------------------------------------------------------------------------
--------------------------------------------=================
2. Less: Today's Reductions
a. Net Cash Collections (Report |_| Collection Report
No. R- ) as per attached
Cash Receipt
|_| Journal |_| Other
---------------------------------------------------------------------------------------------------------------
b. Other
---------------------------------------------------------------------------------------------------------------
c.
---------------------------------------------------------------------------------------------------------------
d. Today's Special Reductions
---------------------------------------------------------------------------------------------------------------=================
3. Net Change in Obligations - Today (Line 1d Less Line 2d)
---------------------------------------------------------------------------------------------------------------=================
4. Total Obligations (Prior Report No. S- )
---------------------------------------------------------------------------------------------------------------=================
5. New Stated Total Obligations - Today (Line 3 Less Line 4)
---------------------------------------------------------------------------------------------------------------=================
6. Less: Amortizing Line of Credit
a. $ Amortizes on
---------------------------------------------------------------------------------------------------------------
b. $ Amortizes on
---------------------------------------------------------------------------------------------------------------
c. $ Amortizes on
---------------------------------------------------------------------------------------------------------------
d. Total Amortizing Line of Credit
---------------------------------------------------------------------------------------------------------------=================
7. Total Non-Amortizing Obligations - Today (Line 5 Less Line 6)
---------------------------------------------------------------------------------------------------------------=================
8. Borrowing Availability
a. Accounts Receivable (Report No. R- )
---------------------------------------------------------------------------------------------------------------=================
b. Inventory (Report No. R- )
---------------------------------------------------------------------------------------------------------------=================
9. [ILLEGIBLE] Borrowing Availability (Line 8a Plus Line 8b)
---------------------------------------------------------------------------------------------------------------=================
10. Net availability (or Overage) (Line 9 Less Line 7)
---------------------------------------------------------------------------------------------------------------=================
Daily Submission and Reconciliation
GMAC
COMMERCIAL CREDIT LLC
Accounts Receivable transactions for Date
---------------------------------------------------------------------------------------------------------------------------------
Report No.
R. Client
---------------------------------------------------------------------------------------------------------------------------------
Invoices for New
1. Increases submitted today per attached listing Shipments Other Increases Total
---------------------------------------------------------------
A. Invoice Date
--------------------------------------------------------------------------------------------------------------
B.
--------------------------------------------------------------------------------------------------------------
C.
---------------------------------------------------------------------------------------------------------------------------------
D. Total today's increases submitted
---------------------------------------------------------------------------------------------------------------------------------
2. Total increases, month (period) to date per prior report (R )
--------------------------------------------------------------------------------------------------------------
3. Total increases submitted month (period) to date (lines (1) + 2)
--------------------------------------------------------------------------------------------------------------
4. Today's decreases submitted (per attached listing) Cash Collections Other Decreases
--------------------------------------------
A. Date Description
--------------------------------------------------------------------------------------------------------------
B.
--------------------------------------------------------------------------------------------------------------
C. ALL CREDITS
--------------------------------------------------------------------------------------------------------------
D. Less: Returned checks
---------------------------------------------------------------------------------------------------------------------------------
E. Total today's decreases submitted
---------------------------------------------------------------------------------------------------------------------------------
5. Total decreases, month (period) to date, per prior report (R )
--------------------------------------------------------------------------------------------------------------
6. Total decreases, month (period) to date (lines 4E + 5)
---------------------------------------------------------------------------------------------------------------------------------
7. Today's net change in accounts receivables (line 1D - less 4E)
----------------------------------------------------------------------------- -------------------
8. Total accounts receivable per prior report (R )
----------------------------------------------------------------------------- -------------------
9. Today's new stated accounts receivable (line 7 + 8)
---------------------------------------------------------------------------------------------------------------------------------
Today's calculation of accounts receivable and
inventory lines of credit Accounts Receivable Inventory
---------------------------------------------------------------
10. Total collateral (line 9 for receivables)
--------------------------------------------------------------------------------------------------------------------------------
11. Less ineligible collateral prior report
--------------------------------------------------------------------------------------------------------------------------------
Changes in ineligible
A.
--------------------------------------------------------------------------------------------------------------------------------
B.
--------------------------------------------------------------------------------------------------------------------------------
C. New ineligible
--------------------------------------------------------------------------------------------------------------------------------
12. Today's new stated Eligible collateral (lines 10-11 or 11C)
--------------------------------------------------------------------------------------------------------------------------------
13. Less: Formula reserve % %
--------------------------------------------------------------------------------------------------------------------------------
14. Available under formula
--------------------------------------------------------------------------------------------------------------------------------
15. Maximum line of credit
================================================================================================================================
This report is submitted pursuant to our Accounts Receivable - Financing
Agreement with you currently in effect ("Agreement"). The invoices and accounts
receivable referred to in this report constitute "receivables," (as defined in
the Agreement) assigned to you, and in which you have been granted a security
interest pursuant to the Agreement. We confirm that, expect as noted, none of
the receivables referred to in this report fall within the ineligible or
prohibited categories as noted in said Agreement. We further confirm said
assignment and grant of security interest to you.
By:______________________________________ Date:_____________________
EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
Dated:_______________, _______
TO: GMAC Commercial Credit LLC
as Agent for the Lenders
under the Revolving Credit, Factoring and
Security Agreement referred to below
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: ____________________
Ladies and Gentlemen:
The undersigned hereby certifies to you pursuant to the Revolving Credit,
Factoring and Security Agreement dated as of ________________, 2000,
("Agreement") between Tarrant Apparel Group dba Fashion Resource, a California
corporation ("TAG"), and Tag Mex, Inc., a California corporation (individually
and collectively, "Borrower"), certain financial institutions who are or later
become a party thereto ("Lenders") and GMAC Commercial Credit LLC, as agent for
Lenders ("Agent"), as follows:
As of _________________, no Event of Default or Prospective Event of
Default has occurred [except: (Specify nature and extent of such Event of
Default and/or Prospective Event of Default)_____________________________].
If applicable, the corrective action taken or proposed to be taken to
prevent or cure such Event of Default or Prospective Event of Default is as
follows:_____________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
As of __________________________, TAG maintains on a consolidated basis
the following financial covenants pursuant to Section 7.5 of the Agreement:
a) Tangible Net Worth of $ _________________________
Minimum required $116,500,000
b) Fixed Charge Coverage Ratio of ______: 1.0
Minimum required ratio 1.5:1.0
c) An Interest Coverage Ratio of ______: 1.0
Minimum required ratio 5.0:1.0
d) A Total Leverage Ratio of _________: 1.0
Maximum permitted ratio 1.8:1.0 during fiscal year 2000 and
1.5:1.0 thereafter.
The financial statements and/or reports submitted as of this date are
true, complete, correct and consistent with GAAP.
Any and all capitalized terms set forth in this certificate without
definition shall have the respective meanings ascribed thereto in the Agreement.
TARRANT APPAREL GROUP,
dba Fashion Resource,
a California corporation
By:_______________________________
Name: ____________________________
Title:____________________________
EXHIBIT F
LENDER ASSIGNMENT AGREEMENT
This Lender Assignment Agreement ("Agreement") is made as of this ____ day
of ________________, 20___, by and among ______________________________________
(hereinafter referred to as "Assignor"), and ________________________________
(hereinafter referred to as "Assignee").
W I T N E S S E T H:
WHEREAS, Tarrant Apparel Group dba Fashion Resource, a California
corporation, and Tag Mex, Inc., a California corporation (individually and
collectively "Borrower"), certain Lenders, including Assignor, and GMAC
Commercial Credit LLC, as agent for Lenders ("Agent"), are parties to a certain
Revolving Credit, Factoring and Security Agreement dated as of _______________,
2000 ("Credit Agreement").
WHEREAS, pursuant to the Credit Agreement, Agent and Lenders have provided
a line of credit to Borrower in the principal sum of $105,000,000 ("Credit") and
the commitment of Assignor under the Credit is $________________.
WHEREAS, Assignee has advised Agent, Assignor and Borrower of its desire
to become a Lender under the Credit Agreement and to assume a percentage
interest of the Credit in the amount of $________________ on the terms herein
provided.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants hereinafter set forth and intending to be legally bound hereby agree
as follows:
AGREEMENT
1. Definitions. Except as otherwise provided herein, capitalized terms
-----------
defined in the Credit Agreement are used herein with the meanings set forth
therein. As used in this Agreement, the following capitalized terms shall have
the meanings set forth below:
"Assigned Commitment Percentage" means the percentage of the
aggregate Credit of Assignee under the Credit Agreement and the corresponding
dollar amount with respect to the aggregate Credit under the Credit Agreement as
set forth below:
Percentage: ____________%
1-
Dollar Amount: $____________
"Pro Rata" means a Pro Rata sharing among Lenders, based on the
ratio that a party's interest in the Credit bears to the outstanding principal
amount of the Advances made by such party at the time in question.
"Effective Date" means ____________________________________________.
2. Representations and Warranties of Assignor. Assignor represents and
------------------------------------------
warrants to Assignee as follows:
a. As of the date hereof, Assignor has a ratable share of the Credit
equal to $____________ or ___________%.
b. As of the date hereof, there is [no] [$________] outstanding
principal balance of Advances made under the Credit Agreement.
Assignor makes no representation or warranty nor assumes any
responsibility with respect to the financial condition of Borrower or the
performance of Borrower of the Advances, and Assignor assumes no responsibility
with respect to any statements, warranties or representations made under or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other documents under the Credit Agreement, other than as expressly set forth
above.
3. Representations and Warranties of Assignee. Assignee hereby
------------------------------------------
represents and warrants to Agent and Assignor as follows:
a. Assignee has full power and authority, and has taken all action
necessary to execute and deliver this Agreement, and any and all other documents
required or permitted to be executed or delivered by it in connection with this
Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement, and no governmental authorizations
or other authorizations are required in connection therewith;
b. This Agreement constitutes the legal, valid and binding
obligation of Assignee;
c. Assignee has independently and without reliance upon Agent or
Assignee and based on such information as Assignee has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement and become a
Lender under the Credit Agreement. Assignee will, independently and without
reliance upon Agent or any Lender, and based upon such documents and information
as it shall deem appropriate at the time, continue to make its
2-
own credit decisions in taking or not taking action under the Credit Agreement;
and
d. If Assignee is organized under the laws of a jurisdiction outside
the United States of America, attached hereto are forms certifying Assignee's
exemption from United States withholding taxes with respect to all payments to
be made to Assignee under the Credit Agreement.
4. Assignment. On the terms set forth herein, Assignor, as of the
----------
Effective Date, hereby irrevocably sells, assigns and transfers to Assignee all
of the rights and obligation of Assignor under the Credit Agreement, its Note,
and the Advances owing to Assignor under the Credit Agreement, in each case to
the extent of the Assigned Commitment Percentage, and Assignee irrevocably
accepts such assignment of rights and assumes such obligations from Assignor on
such terms and effective as of the Effective Date. As of the Effective Date,
Assignee shall have the rights and obligations of a "Lender" under the Credit
Agreement and the Note. Assignee hereby appoints and authorizes Agent to
exercise such powers under the Credit Agreement as are delegated to the Agent by
Article XIII of the Credit Agreement.
5. Payment. On the Effective Date, Assignee shall pay to Assignor, in
-------
immediately available funds, an amount equal to the purchase price of the
Assigned Commitment Percentage, as agreed between Assignor and Assignee pursuant
to a letter agreement of even date herewith.
Assignor and Assignee hereby agree that if either receives any
payment of interest, principal, fees or any other amount under the Credit
Agreement, their respective Notes or any other documents under the Credit
Agreement which is for the account of the other, it shall hold the same in trust
for such party to the extent of such party's interest therein and shall promptly
pay the same to such party.
6. Notes. Agent shall make appropriate arrangements with Borrower
-----
concurrently with the execution and delivery hereof so that a new Note is issued
to Assignee and a replacement Note is issued to Assignor, in each case in
principal amounts reflecting their respective Revolving Percentage interests
under the Credit Agreement.
7. Further Assurances. Concurrently with the execution of this
------------------
Agreement, Agent shall register Assignee as a Lender under the Credit Agreement
and revise Exhibit "A" to the Credit Agreement to reflect the Assigned
Commitment Percentage.
8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL
-------------
OBLIGATION UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA. ASSIGNEE HEREBY AGREES TO
THE PROVISIONS OF SECTION 14.3 OF THE CREDIT AGREEMENT.
3-
9. Notices. All communications among the parties or notices in connection
-------
herewith must be in writing and must be mailed, telegraphed, telecopied,
delivered or sent by telex or cable, addressed to the appropriate party at its
address set forth on the signature pages hereof. All communications and notices
shall, if sent by telegraph, telex or telecopy, be deemed to have been given
when received by the Person to whom addressed; if sent by overnight courier
service, be deemed to have been given one day after the date when set; and if
sent by mail, be given to have been given three days after the date when sent by
registered or certificate mail, postage prepaid.
10. Attorneys' Fees. In the event of any action at law or any suit in
---------------
equity with respect to this Agreement, or any documents executed pursuant
hereto, whether in federal court, state court, administrative proceedings,
arbitration proceeding (if agreed upon by the parties hereto) or insolvency
proceedings, the prevailing party, in addition to all other sums to which it may
be entitled by law, shall be entitled to a reasonable sum for attorneys' fees
and costs incurred.
11. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties and their respective successors and assigns.
12. Interpretation. The headings of the various sections hereof are for
--------------
convenience of reference only and shall not affect the meaning or construction
of any provision hereof.
4-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers, as of the date first above
written.
"Assignor"
______________________________________,
BY: ____________________________________
NAME: __________________________________
TITLE: _________________________________
"Assignee"
______________________________________,
BY: ____________________________________
NAME: __________________________________
TITLE: _________________________________
Acknowledged:
GMAC Commercial Credit LLC,
as Agent
By: _______________________________
Name: _____________________________
Title: ____________________________
5-
EXHIBIT G
RECORDING REQUESTED BY:
GMAC Commercial Credit LLC, as Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
======================================================
TRADEMARK SECURITY AGREEMENT
----------------------------
THIS TRADEMARK SECURITY AGREEMENT ("Agreement") dated as of ____________
2000, made by Tarrant Apparel Group dba Fashion Resource, a California
corporation, and Tag Mex, Inc., a California corporation (collectively
"Grantor"), in favor of GMAC Commercial Credit LLC, a New York limited liability
company, in its capacity as agent for certain Lenders (including the Issuer and
the Factor) parties to that certain Loan Agreement defined below ("Agent")
located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
R E C I T A L S:
A. Grantor is indebted to the Agent and the Lenders parties to the
Revolving Credit, Factoring and Security Agreement dated January ___, 2000
("Loan Agreement"), which provides for certain credit facilities in the
aggregate principal sum not exceeding $105,000,000.
B. The obligations of Grantor to Agent for and on behalf of the Secured
Parties are secured by all of Grantor's right, title and interest in accounts,
certain general intangibles and certain inventory as provided under the Loan
Agreement.
C. As a condition to Secured Parties extending credit to Grantor, Grantor
has agreed to give to Agent a security interest in and to all trademarks owned
by Grantor, consisting of the trademarks "No!", "No! Jeans", "GET", "No! Femmes"
and "Chazzz."
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Grantor agrees as follows:
1. Defined Terms. Capitalized terms used herein without definition shall
-------------
have the meaning set forth in the Loan Agreement. The following terms have the
following meanings
1
(such meanings being equally applicable to both the singular and plural forms of
the terms defined):
"Agreement" means this Trademark Security Agreement, as the
---------
same may from time to time be amended, modified or supplemented.
"Intellectual Property Collateral" has the meaning assigned to
--------------------------------
such term in Section 2 of this Agreement.
"Trademarks" means trademarks (including service marks and
----------
trade names, whether registered or at common law), registrations and
applications therefor and any and all (i) renewals thereof, (ii) income,
royalties, damages and payments now and hereafter due or payable or both with
respect thereto including, without limitation, damages and payments for past or
future infringements thereof, (iii) rights to xxx for past, present and future
infringements thereof, and (iv) rights corresponding thereto throughout the
world.
The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole, including the Exhibits and
Schedules hereto, and not to any particular section, subsection or clause
contained in this Agreement.
2. Grant of Security Interest in Trademarks. In order to secure the
----------------------------------------
complete and due and punctual payment of all of the Obligations of Grantor to
the Agent and the Secured Parties, Grantor hereby grants and conveys to the
Agent, on behalf of the Secured Parties, as collateral security, a continuing
security interest in all of Grantor's entire right, title and interest in and to
intellectual property rights now owned or existing and hereafter acquired or
arising in the following assets (all of which being hereinafter referred to as
the "Intellectual Property Collateral") all Trademarks of Grantor including,
without limitation, the Trademarks listed on Schedule A hereto, and the entire
goodwill of Grantor's business connected with the use of and symbolized by the
Trademarks;
provided, however, that nothing hereunder constitutes or shall be
-------- -------
deemed to constitute the grant of a security interest in favor of the Agent with
respect to any Intellectual Property Collateral to the extent prohibited by
applicable law.
3. Representations and Warranties; New Intellectual Property. (a)
---------------------------------------------------------
Grantor represents and warrants that it has the full right and power to grant
the security interests provided for in this Agreement (subject to the exceptions
contained herein) in the Trademarks made hereby; that it has made no previous
assignment, transfer or agreements in conflict herewith or constituting an
assignment of, a transfer of or an encumbrance on any of the Trademarks. Grantor
further represents and warrants that Schedule A lists all Trademarks owned or
used by
2
Grantor and which are material to any portion of its business or any of
Grantor's subsidiaries or affiliates and (ii) the Intellectual Property
Collateral does not infringe upon any rights owned or possessed by any entity
not a party to this Agreement.
(b) In the event, prior to the time the Obligations of Grantor to
the Agent and the Secured Parties have been indefeasibly paid in full, Grantor
shall (i) obtain any rights to or interests in any new trademarks, trade names,
service marks, and applications therefor, or licenses, or (ii) become entitled
to the benefit of any trademark application, trademark, trademark registration,
the provisions of this Agreement shall automatically apply thereto and anything
enumerated in clauses (i) or (ii) shall constitute Intellectual Property
Collateral. Grantor shall give to the Agent prompt written notice thereof.
Grantor agrees, promptly following the written request by the Agent, to amend
this Agreement by amending Schedule A, to include any such future trademarks,
trademark registrations, trademark applications, trade names and service marks
which would be Intellectual Property Collateral.
4. Rights and Remedies; Application of Monies.
------------------------------------------
(a) Upon the occurrence and during the continuation of a
default of any or all of Grantor's Obligations to the Agent and the Secured
Parties, and assuming the obligations are accelerated, the Agent may, to the
fullest extent permitted by applicable law and without advertisement, hearing or
process of law of any kind, (i) exercise any and all rights as beneficial and
legal owner of the Intellectual Property Collateral, including, without
limitation, any and all consensual rights and powers with respect to the
Intellectual Property Collateral and (ii) sell or assign or grant a license or
franchise to use, or cause to be sold or assigned or grant a license or
franchise to use any or all of the Intellectual Property Collateral, in each
case, free of all rights and claims of Grantor therein and thereto. Upon the
occurrence and during the continuation of a default of any or all of Grantor's
Obligations to the Agent or any of the Secured Parties, the Agent may, subject
to any limitations under the Uniform Commercial Code or other applicable law,
(i) sell or assign the Intellectual Property Collateral, or any part thereof,
for cash or upon credit as the Agent may deem appropriate or (ii) grant licenses
or franchises or both to use the Intellectual Property Collateral on such terms
and conditions that the Agent shall determine. In connection therewith, the
Agent shall have the right to impose such limitations and restrictions on the
sale or assignment of the Intellectual Property Collateral as the Agent may deem
to be necessary or appropriate to comply with any law, rule or regulation
(federal, state or local) having applicability to any such sale and requirements
for any necessary governmental approvals.
(b) Except as provided in this Section 4, Grantor hereby
expressly waives, to the fullest extent permitted by applicable law, any and all
notices, advertisements, hearings or process of law in connection with the
exercise by the Agent of any of its rights and remedies hereunder. The Agent
shall not be liable to any person for any incorrect or improper
3
payment made pursuant to this Section 4, in the absence of gross negligence or
willful misconduct.
(c) Notwithstanding any provisions of this Agreement to the
contrary, if, after giving effect to any sale, transfer, assignment or other
disposition of any or all of the Intellectual Property Collateral pursuant
hereto and after the application of the proceeds hereunder to the Obligations of
Grantor to the Agent, any said Obligations remain unpaid or unsatisfied, Grantor
shall remain liable for the unpaid and unsatisfied amount of such remaining
obligations.
(d) This Agreement is made to provide for and secure repayment of
the obligations of Grantor to the Agent and the Secured Parties.
5. Termination of Security Interest. This Agreement and the security
--------------------------------
interests created or granted hereby or thereby, shall terminate when the later
of the following shall have occurred: (a) the date that all of the obligations
of Grantor to the Agent and the Secured Parties shall have been fully and
indefeasibly paid and satisfied and (b) the date as of which the last of the
commitments and related documents and instruments have terminated with respect
to the Loan Agreement. After such termination, the Agent (without recourse upon,
or any warranty whatsoever by, the Agent), shall execute and deliver to Grantor
for filing in each office in which any security agreement, notice or other
filing, or any part thereof, shall have been filed, an instrument releasing the
Agent's security interest in the Intellectual Property Collateral, and such
other documents and instruments to terminate any security interest of the Agent
granted hereby as the Grantor may reasonably request, all without recourse upon,
or warranty whatsoever by, the Agent (except that the same shall be free and
clear of any claims, liens or encumbrances created by or in respect of the
Agent) and all at the cost and expense of Grantor.
6. Use and Protection of Intellectual Property Collateral.
------------------------------------------------------
Notwithstanding anything to the contrary contained herein, unless an Event of
Default has occurred and is continuing, Grantor may continue to exploit,
license, franchise, use, enjoy and protect (whether in the United States of
America or any foreign jurisdiction) the Intellectual Property Collateral in the
ordinary course of business and the Agent shall from time to time execute and
deliver, upon written request of Grantor and at Grantor's sole cost and expense,
any and all instruments, certificates or other documents, in the form so
requested, necessary or appropriate in the judgment of Grantor to enable Grantor
to do so.
7. Duties of Grantor. Grantor shall have the duty to preserve and
-----------------
maintain all rights in the Intellectual Property Collateral in respect of which
a failure to be able to continue to use the same would have a material adverse
effect on the ownership, operation or maintenance of its business and
operations, in a manner substantially consistent with its present practices and
shall take all action reasonably requested by the Agent to register, record
and/or perfect the Agent's right hereunder.
4
8. The Agent's Right to Xxx. Whenever Grantor shall have defaulted
------------------------
in any or all of its Obligations to the Agent and any of the Secured Parties,
the Agent shall have the right, but shall in no way be obligated, to bring suit
in its own name to enforce the Trademarks, and, if the Agent shall commence any
such suit, Grantor shall, at the request of the Agent, do any and all lawful
acts and execute any and all proper documents required by the Agent in aid of
such enforcement.
9. No Waiver; Cumulative Remedies. No failure on the part of the
------------------------------
Agent to exercise, and no delay on the part of the Agent in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy by the Agent
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies that may be available to the Agent whether at
law, in equity or otherwise.
10. Notices, etc. All notices or other communications hereunder
------------
shall be given to the Agent as follows:
GMAC Commercial Credit LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Notices to the Grantor should be addressed to:
Tarrant Apparel Group
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Tag Mex, Inc.
0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
11. Expenses of Collection. Grantor hereby agrees to pay all
----------------------
expenses of the Agent, including reasonable attorneys' fees, incurred with
respect to the collection of any of the Intellectual Property Collateral and the
enforcement of the rights of the Agent hereunder which expenses together with
interest thereon at the rate provided in the Loan Agreement shall constitute
obligations of Grantor to the Agent thereunder and, therefore, secured hereby.
5
12. Attorney-in-Fact. Grantor hereby irrevocably constitutes and
----------------
appoints the Agent and any officer or agent thereof, with full power of
substitution, as Grantor's true and lawful attorney-in-fact, for the purpose of
taking such action and executing agreements, instruments and other documents, in
the name of Grantor or otherwise, not inconsistent with the express provisions
of this Agreement, as the Agent may deem necessary or advisable to accomplish
the purposes hereof, which appointment is an agency coupled with an interest and
is irrevocable until payment in full of all obligations of Grantor to the Agent.
The Agent agrees that except upon the occurrence and during the
continuation of an Event of Default, it will forbear from exercising the power
of attorney or any rights granted to the Agent pursuant to this Section 12.
13. Agreement Governing Law; Binding Character; Assignment. This
------------------------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without regard to principles of conflicts of law. This
Agreement shall be binding upon Grantor and the Agent and their respective
successors and assigns and shall inure to the benefit of Grantor and the Agent,
and their respective successors and assigns; provided, however, that Grantor may
not assign its rights or obligations hereunder or in connection herewith or any
interest herein (voluntarily, by operation of law or otherwise) without the
prior written consent of the Agent. No other person (including, without
limitation, any other creditor of Grantor) shall have any interest herein or any
right or benefit with respect hereto and this Agreement shall not be construed
so as to confer any right or benefit upon any person other than the parties to
this Agreement and each of their respective successors and assigns.
14. Further Indemnification. Grantor agrees to pay, and save the
-----------------------
Agent harmless from, any and all liabilities with respect to, or resulting from
any delay in paying (other than a delay caused by the willful misconduct of the
Agent), any and all excise, sales or other similar taxes which may be payable
with respect to the Intellectual Property Collateral or in connection with any
of the transactions contemplated by this Agreement.
15. WAIVER OF JURY TRIAL. GRANTOR WAIVES ALL RIGHT TO TRIAL BY JURY
--------------------
IN ANY ACTION, SUIT PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO THIS AGREEMENT, THE LOAN AGREEMENT OR ANY OF THE OTHER DOCUMENTS
RELATED TO THE LOAN AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS OR
COUNTERCLAIMS GROUNDED IN CONTRACT OR TORT.
16. Severability of Provisions. Any provision of this Agreement
--------------------------
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
6
17. Headings. Paragraph and section headings used in this Agreement
--------
are for convenience of reference only and shall not affect the construction of
this Agreement.
18. Execution in Counterparts. This Agreement may be executed in any
-------------------------
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TARRANT APPAREL GROUP,
dba Fashion Resource
a California corporation
By: ____________________________________
Name: ______________________________
Its: _______________________________
TAG MEX, INC., a California corporation
By: ____________________________________
Name: ______________________________
Its: _______________________________
7
SCHEDULE A
to the
Trademark Security Agreement
Trademarks
--------------------------------------------------------------------------------
XXXX SERIAL/REGISTRATION OWNER
NUMBER
--------------------------------------------------------------------------------
No ! 1 461979 TAG
--------------------------------------------------------------------------------
No ! Jeans 1 462893 TAG
--------------------------------------------------------------------------------
GET 368528
--------------------------------------------------------------------------------
No ! Femmes 2222377 TAG
--------------------------------------------------------------------------------
Chazzz
--------------------------------------------------------------------------------
8
SCHEDULE 1.2
OUTSTANDING LIENS
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. File No. of Orig. 1A. Date of Filing of 1B. Date of Orig. 1C. Date of Orig.
Financing Statement Orig. Financing Statement Financing Statement Financing Statement
9927760555 9/29/99 Secretary of State
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (Last Name First) 2A. Social Security No..
Tarrant Apparel Group Federal Tax No.
---------------------------------------------------------------------------------------- ----------------------------
2B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Xxx Code
0000 X. Xxxxxxxxxx Xxxx Xxx Xxxxxxx, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (If Any) (Last Name First) 3A. Social Security No..
Federal Tax No.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Zip Code
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY THE CIT GROUP/ COMMERCIAL SERVICES, INC. 4A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS 000 X. Xxxxx Xxx., 0xx Xxxxx Transit and X.X.X. Xx.
XXXX Xxx Xxxxxxx XXXXX XX XXX XXXX 00000
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (If Any) 5A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS Transit and A.B.A. No.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |_| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |X| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
Collateral is amended to include: X. X. Penney,and Marshalls, Inc.
TJ Maxx
--------------------------------------------------------------------------------
8. (Date) 11-24 1999
------- ----
Tarrant Apparel Group
___________________________________________________________________
By: /s/ [ILLEGIBLE] VP/CFO
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
THE CIT GROUP/COMMERCIAL SERVICES, INC.
-------------------------------------------------------------------
By: /s/ Xxxxxx Xxxxxxx VP
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME Del Xxxx/Xxx Xxxxx
ADDRESS The CIT Group/ Commercial Services, Inc.
CITY AND 000 X. Xxxxx Xxx., 0xx Xx
XXXXX Xxx Xxxxxxx, XX 00000
UNIFORM COMMERCIAL CODE-FORM UCC-2
(2) ACKNOWLEDGEMENT Printed by UCC Control - LibraSoft, Inc.
Approved by the Secretary of State 000 Xxxxxxx Xx., Xxxxx X, Xxxxx Xx, XX 00000
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. File No. of Orig. 1A. Date of Filing of 1B. Date of Orig. 1C. Date of Orig.
Financing Statement Orig. Financing Statement Financing Statement Financing Statement
9927760555 9/29/99 Secretary of State
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (Last Name First) 2A. Social Security No..
Tarrant Apparel Group Federal Tax No.
---------------------------------------------------------------------------------------- ----------------------------
2B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Xxx Code
0000 X. Xxxxxxxxxx Xxxx Xxx Xxxxxxx, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (If Any) (Last Name First) 3A. Social Security No..
Federal Tax No.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Zip Code
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY THE CIT GROUP/ COMMERCIAL SERVICES, INC. 4A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS 000 X. Xxxxx Xxx., 0xx Xxxxx Transit and X.X.X. Xx.
XXXX Xxx Xxxxxxx XXXXX XX XXX XXXX 00000
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (If Any) 5A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS Transit and A.B.A. No.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |_| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |X| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
Collateral is amended to include: Xxxx Stores, Inc.
--------------------------------------------------------------------------------
8. (Date) _______ 19__
Tarrant Apparel Group
___________________________________________________________________
By: /s/ [ILLEGIBLE] VP/CFO
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
THE CIT GROUP/COMMERCIAL SERVICES, INC.
-------------------------------------------------------------------
By: /s/ Xxxxxx Xxxxxxx VP
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME Del Xxxx/Xxx Xxxxx
ADDRESS The CIT Group/ Commercial Services, Inc.
CITY AND 000 X. Xxxxx Xxx., 0xx Xx
XXXXX Xxx Xxxxxxx, XX 00000
UNIFORM COMMERCIAL CODE-FORM UCC-2
(2) ACKNOWLEDGEMENT Printed by UCC Control - LibraSoft, Inc.
Approved by the Secretary of State 000 Xxxxxxx Xx., Xxxxx X, Xxxxx Xx, XX 00000
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. File No. of Orig. 1A. Date of Filing of 1B. Date of Orig. 1C. Date of Orig.
Financing Statement Orig. Financing Statement Financing Statement Financing Statement
9927760555 9/29/99 Secretary of State
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (Last Name First) 2A. Social Security No..
Tarrant Apparel Group Federal Tax No.
---------------------------------------------------------------------------------------- ----------------------------
2B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Xxx Code
0000 X. Xxxxxxxxxx Xxxx Xxx Xxxxxxx, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (If Any) (Last Name First) 3A. Social Security No..
Federal Tax No.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Zip Code
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY THE CIT GROUP/ COMMERCIAL SERVICES, INC. 4A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS 000 X. Xxxxx Xxx., 0xx Xxxxx Transit and X.X.X. Xx.
XXXX Xxx Xxxxxxx XXXXX XX XXX XXXX 00000
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (If Any) 5A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS Transit and A.B.A. No.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |_| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |X| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
Collateral is amended to include: Xxxx Stores, Inc.
--------------------------------------------------------------------------------
8. (Date) _______ 19__
Tarrant Apparel Group
___________________________________________________________________
By: /s/ [ILLEGIBLE] VP/CFO
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
THE CIT GROUP/COMMERCIAL SERVICES, INC.
-------------------------------------------------------------------
By: /s/ Xxxxxx Xxxxxxx VP
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME Del Xxxx/Xxx Xxxxx
ADDRESS The CIT Group/ Commercial Services, Inc.
CITY AND 000 X. Xxxxx Xxx., 0xx Xx
XXXXX Xxx Xxxxxxx, XX 00000
UNIFORM COMMERCIAL CODE-FORM UCC-2
(2) ACKNOWLEDGEMENT Printed by UCC Control - LibraSoft, Inc.
Approved by the Secretary of State 000 Xxxxxxx Xx., Xxxxx X, Xxxxx Xx, XX 00000
[CIT GROUP LETTERHEAD]
December 15, 1999
TARRANT APPAREL GROUP
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Gentlemen:
Reference is made to the Accounts Receivable Financing Agreement between us,
dated June 13, 1997, as supplemented and amended (herein the "Agreement").
Pursuant to mutual understanding, effective immediately, Paragraph 1.2 and 1.6
of the Agreement shall be amended to include the following customer:
Xxxx Stores, Inc.
Except as herein specifically provided, the Agreement remains in full force and
effect in accordance with its terms, and no other changes in the terms or
provisions of the Agreement are intended or implied. If you are in agreement
with the foregoing, please indicate by signing and returning the enclosed
duplicate of this letter.
Sincerely,
THE CIT GROUP/
COMMERCIAL SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx, Vice President
Read and Agreed to:
TARRANT APPAREL GROUP
By: /s/ [ILLEGIBLE]
-----------------------------------
Name:
Title:
[CIT GROUP LETTERHEAD]
December 15, 1999
TARRANT APPAREL GROUP
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Gentlemen:
Reference is made to the Accounts Receivable Financing Agreement between us,
dated June 13, 1997, as supplemented and amended (herein the "Agreement").
Pursuant to mutual understanding, effective immediately, Paragraph 1.2 and 1.6
of the Agreement shall be amended to include the following customer:
Xxxx Stores, Inc.
Except as herein specifically provided, the Agreement remains in full force and
effect in accordance with its terms, and no other changes in the terms or
provisions of the Agreement are intended or implied. If you are in agreement
with the foregoing, please indicate by signing and returning the enclosed
duplicate of this letter.
Sincerely,
THE CIT GROUP/
COMMERCIAL SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx, Vice President
Read and Agreed to:
TARRANT APPAREL GROUP
By: /s/ [ILLEGIBLE]
-----------------------------------
Name:
Title:
FINANCING STATEMENT is presented for filing and will remain effective with
certain exceptions for a period of five years from the date of filing pursuant
to section 9403 of the California Uniform Commercial Code.
---------------------------------------------------------------------------------------- -------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO
TARRANT APPAREL GROUP dba FASHION RESOURCE
------------------------------------------------------------------- -------------------- -------------------------------------
1B. XXXXXXX XXXXXXX 0X. Xxxx, Xxxxx 0X. Zip Code
------------------------------------------------------------------- -------------------- -------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO
------------------------------------------------------------------- -------------------- -------------------------------------
2B. XXXXXXX XXXXXXX 0X. Xxxx, Xxxxx 0X. Zip Code
---------------------------------------------------------------------------------------- -------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
======================================================================================== =====================================
4. SECURED PARTY 4A. Social Security No..
NAME THE CIT GROUP/COMMERCIAL SERVICES, INC. Federal Tax No. or Bank
MAILING ADDRESS 000 X. Xxxxx Xxx. 0xx Xxxxx Transit and X.X.X. Xx.
XXXX Xxx Xxxxxxx, XX 00000 00-000000-0
---------------------------------------------------------------------------------------- -------------------------------------
5. ASSIGNEE OF SECURED PARTY (If Any) 5A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS Transit and A.B.A. No.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
See attached Schedule A
---------------- ------------------------------- -------------------------------
7. CHECK |_| 7A. |X| PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT
IF APPLICABLE ARE ALSO COVERED REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a)
ITEM:
|_|(1) |_|(2) |_|(3) |_|(4)
----------------- ------------------------------ -------------------------------
8. CHECK |_| |_| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC
IF APPLICABLE ss. 9105(1)(n)
--------------------------------------------------------------------------------
9. DATE: 6/13/97
By: /s/ [ILLEGIBLE]
SIGNATURE OF DEBTOR Title: V.P.
--------------------------------------------------------------------------------
TYPE OR PRINT NAME OF DEBTOR Tarrant Apparel Group
--------------------------------------------------------------------------------
By: /s/ [ILLEGIBLE]
Title: VP
SIGNATURE OF SECURED PARTY
--------------------------------------------------------------------------------
TYPE OR PRINT NAME(S) OF SECURED PARTY The CIT Group/Commercial Services, Inc.
================================================================================
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER
AND FILING OFFICER)
================================================================================
11. Return Copy to;
NAME The CIT Group/Commercial Services, Inc.
ADDRESS 000 X. Xxxxx Xxx. 0xx Xx
CITY AND Xxx Xxxxxxx, XX 00000
STATE Attn: Documentation Dept.
ZIP CODE
================================================================================
FORM UCC - 1--
Approved by the Secretary of State
================================================================================
[ILLEGIBLE] (1) FILING OFFICER COPY FILING OFFICE: SECRETARY OF STATE
Prepared with UCC Master Software - [ILLEGIBLE] Software, Inc. 0
Xxxxxx Xxxxx, Xxx Xxxxxxx, XX 00000 - 000-000-0000
SCHEDULE A TO THAT CERTAIN UCC-1
FINANCING STATEMENT BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR,
AND THE CIT GROUP/COMMERCIAL SERVICES. INC., AS SECURED PARTY
-------------------------------------------------------------
Collateral shall mean and include: (a) all of Debtor's present and future
accounts and accounts receivable created by or arising from its sales of goods
or rendition of services to Xxxxxx New York, a division of The Limited
Corporation and Target Stores, a division of Xxxxxx Xxxxxx Corporation
(including, without limitation, all accounts and accounts receivable under any
of its trade names or styles, or through any of its divisions), and all
instruments, documents, contract rights, chattel paper, general intangibles
arising out of such sale of goods or rendition of services (collectively the
"Accounts"); (b) all of Debtor's present and future deposits, balances, sums and
credits in Secured Party's possession or control relating to the Accounts; (c)
all Debtor's present and future monies, securities and other property now or
hereafter held or received by or in transit to Secured Party from or for
Debtor's account, whether for safekeeping, pledge, custody, transmission,
collection or otherwise relating to the Accounts; (d) all of Debtor's present
and future liens, security interests, rights, remedies, title and interest in,
and in respect of the Accounts, including, without limitation: (i) rights and
remedies under or relating to guaranties, contracts or suretyship, letter of
credit, credit insurance, or other types of credit enhancements, (ii) rights of
stoppage in transit, rescission, replevin, repossession, reclamation and other
rights and remedies of an unpaid vendor, lien or secured party, (iii) goods
described in invoices, documents, contracts or instruments with respect to, or
otherwise representing or evidencing accounts or other collateral, including,
without limitation, returned, repossessed and reclaimed goods, and (iv) deposits
by and property of customers or other persons securing the obligations of
customers; (e) all of Debtor's books of account of every kind of nature,
purchase and sale agreements, invoices, ledger cards, computer programs, bills
of lading and other shipping evidence, statements correspondence, memoranda,
bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Accounts, together with
the file cabinets or containers in which the foregoing are stored; and (f) all
proceeds and products of the foregoing, in any form, including, without
limitation, insurance proceeds and any claims against third parties for loss or
damage to or destruction of any or all of the foregoing.
TARRANT APPAREL GROUP THE CIT GROUP/
(Debtor) COMMERCIAL SERVICES, INC.
(Secured Party)
By: /s/ Xxxx X. Xxxxxxx By: /s/ [ILLEGIBLE]
------------------------ ------------------------
Name: Xxxx X. Xxxxxxx Name:
Title: V.P. Title:
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. File No. of Orig. 1A. Date of Filing of 1B. Date of Orig. 1C. Place of Filing Orig.
Financing Statement Orig. Financing Statement Financing Statement Financing Statement
9719161257 7/9/97 Secretary of State
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (Last Name First) 2A. Social Security No..
Tarrant Apparel Group Federal Tax No.
---------------------------------------------------------------------------------------- ----------------------------
2B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Xxx Code
0000 X. Xxxxxxxxxx Xxxx Xxx Xxxxxxx, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (If Any) (Last Name First) 3A. Social Security No..
Federal Tax No.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. Xxxxxxx Xxxxxxx 0X. Xxxx, Xxxxx 0X. Zip Code
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY THE CIT GROUP/COMMERCIAL SERVICES, INC. 4A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS 000 X. Xxxxx Xxx., 0xx Xxxxx Transit and X.X.X. Xx.
XXXX XXX XXXXXXX XXXXX XX XXX XXXX 00000 00-0000000
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS Transit and A.B.A. No.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |_| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |X| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
7. See attached
Copy
--------------------------------------------------------------------------------
8. (Date) 2/17 1995
------- --
Tarrant Apparel Group
___________________________________________________________________
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
THE CIT GROUP/COMMERCIAL SERVICES, INC.
-------------------------------------------------------------------
By: /s/ [ILLEGIBLE]
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
99064C0147
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
FILED
SACRAMENTO, CA
MAR 02, [ILLEGIBLE] AT 8911
XXXX XXXXX
SECRETARY OF STATE
--------------------------------------------------------------------------------
10. Return Copy to
NAME LEXIS Document Services
ADDRESS 000 00xx Xxxxxx
XXXX XXX Xxxxx X
XXXXX Xxxxxxxxxx, XX 00000
UNIFORM COMMERCIAL CODE-FORM UCC-2
(*) ACKNOWLEDGEMENT COPY Printed by UCC Control - [ILLEGIBLE], Inc.
Approved by the Secretary of State 000 Xxxxxxx Xx., Xxxxx X. Xxxxx Xx, XX 00000
EXTENSION SHEET FOR UNIFORM COMMERCIAL CODE FINANCING STATEMENTS
--------------------------------------------------------------------------------
STATE OF California TOTAL NUMBER OF SHEETS 2
--------------------------------------------------------------------------------
Schedule A shall be amended to include the following customers:
Guess? Inc.
Structure, Inc., a subsidiary of The Limited Inc.
Sentence (a) of Schedule A shall be amended to read as follows:
"(a) all of Debtor's present and future accounts and accounts receivable created
by or arising from its sales of goods or rendition of services to Xxxxxx New
------
York, a division of The Limited Corporation, Target Stores, a division of
Xxxxxx Xxxxxx Corporation, Guess? Inc. and Structure, Inc., a subsidiary of The
---------
Limited Inc. (including, without limitation, all accounts and accounts
receivable under any of its trade names or styles, or through any of its
divisions), and all instruments, documents, contract rights, chattel paper,
general intangibles arising out of such sale of goods or rendition of services
collectively the "Accounts");
Tarrant Apparel Group The CIT Group/Commercial Services,
/s/ Xxxx X. Xxxxxxx Inc. /s/ [ILLEGIBLE] 2
--------------------- ----------------------------------- -----------------
DEBTOR SECURED PARTY SHEET NO.
FORM UCC-E Printed by UCC Control - LibraSoft, Inc.
000 Xxxxxxx Xx., Xxxxx X, Xxxxx Xx, XX 00000
FINANCING STATEMENT is presented for filing and will remain effective with
certain exceptions for a period of five years from the date of filing pursuant
to section 9403 of the California Uniform Commercial Code.
---------------------------------------------------------------------------------------- -------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO.
Tarrant Apparel Group
---------------------------------------------------------- ----------------------------- -------------------------------------
1B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
0000 X. Xxxxxxxxxx Xxxx. Xxx Xxxxxxx, Xxxxxxxxxx 00000
---------------------------------------------------------------------------------------- -------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO
---------------------------------------------------------- ----------------------------- -------------------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
======================================================================================== =====================================
4. SECURED PARTY 4A. SOCIAL SECURITY OR
NAME THE CIT GROUP/COMMERCIAL SERVICES, INC. FEDERAL TAX NO. OR BANK
MAILING ADDRESS 000 X. Xxxxx Xxx. 0xx Xxxxx TRANSIT AND X.X.X. XX.
XXXX Xxx Xxxxxxx, XX 00000 00-000000-0
---------------------------------------------------------------------------------------- -------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY OR
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
See attached Schedule A
---------------- ------------------------------- -------------------------------
7. CHECK |_| 7A. |X| PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT
IF APPLICABLE ARE ALSO COVERED REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a)
ITEM:
|_|(1) |_|(2) |_|(3) |_|(4)
----------------- ------------------------------ -------------------------------
8. CHECK |_| |_| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC
IF APPLICABLE ss. 9105(1)(n)
--------------------------------------------------------------------------------
9. DATE: 6/13/97
By: /s/ Xxxx X. Xxxxxxx
SIGNATURE(S) OF DEBTOR Title: V.P.
--------------------------------------------------------------------------------
TYPE OR PRINT NAMES OF DEBTOR Tarrant Apparel Group
--------------------------------------------------------------------------------
By: /s/ [ILLEGIBLE]
Title: AVP
SIGNATURES OF SECURED PARTY
--------------------------------------------------------------------------------
TYPE OR PRINT NAME(S) OF SECURED PARTY The CIT Group/Commercial Services, Inc.
================================================================================
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER
AND FILING OFFICER)
9719161257
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
FILED
SACRAMENTO, CA
JUL 09, 1997 AT 0000
XXXX XXXXX
XXXXXXXXX XX XXXXX
================================================================================
11. Return Copy to
NAME LEXIS Document Services ACKNOWLEDGEMENT
ADDRESS 000 00xx Xxxxxx XXXX
XXXX XXX Xxxxx X
XXXXX Xxxxxxxxxx, XX 00000
ZIP CODE
================================================================================
FORM UCC - 1--
Approved by the Secretary of State
================================================================================
[ILLEGIBLE] (1) FILING OFFICER COPY FILING OFFICE: SECRETARY OF STATE
Prepared with UCC Master Software - [ILLEGIBLE] Software, Inc. 0
Xxxxxx Xxxxx, Xxx Xxxxxxx, XX 00000 - 000-000-0000
SCHEDULE A TO THAT CERTAIN UCC-1
FINANCING STATEMENT BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR,
AND THE CIT GROUP/COMMERCIAL SERVICES. INC., AS SECURED PARTY
-------------------------------------------------------------
Collateral shall mean and include: (a) all of Debtor's present and future
accounts and accounts receivable created by or arising from its sales of goods
or rendition of services to Xxxxxx New York, a division of The Limited
Corporation and Target Stores, a division of Xxxxxx Xxxxxx Corporation
(including, without limitation, all accounts and accounts receivable under any
of its trade names or styles, or through any of its divisions), and all
instruments, documents, contract rights, chattel paper, general intangibles
arising out of such sale of goods or rendition of services (collectively the
"Accounts"); (b) all of Debtor's present and future deposits, balances, sums and
credits in Secured Party's possession or control relating to the Accounts; (c)
all Debtor's present and future monies, securities and other property now or
hereafter held or received by or in transit to Secured Party from or for
Debtor's account, whether for safekeeping, pledge, custody, transmission,
collection or otherwise relating to the Accounts; (d) all of Debtor's present
and future liens, security interests, rights, remedies, title and interest in,
and in respect of the Accounts, including, without limitation: (i) rights and
remedies under or relating to guaranties, contracts or suretyship, letter of
credit, credit insurance, or other types of credit enhancements, (ii) rights of
stoppage in transit, rescission, replevin, repossession, reclamation and other
rights and remedies of an unpaid vendor, lien or secured party, (iii) goods
described in invoices, documents, contracts or instruments with respect to, or
otherwise representing or evidencing accounts or other collateral, including,
without limitation, returned, repossessed and reclaimed goods, and (iv) deposits
by and property of customers or other persons securing the obligations of
customers; (e) all of Debtor's books of account of every kind of nature,
purchase and sale agreements, invoices, ledger cards, computer programs, bills
of lading and other shipping evidence, statements correspondence, memoranda,
bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Accounts, together with
the file cabinets or containers in which the foregoing are stored; and (f) all
proceeds and products of the foregoing, in any form, including, without
limitation, insurance proceeds and any claims against third parties for loss or
damage to or destruction of any or all of the foregoing.
TARRANT APPAREL GROUP THE CIT GROUP/
(Debtor) COMMERCIAL SERVICES, INC.
(Secured Party)
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx Xxxxxx
------------------------ ------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxx Xxxxxx
Title: V.P. Title: AVP
This FINANCING STATEMENT is presented for filing and will remain effective with
certain exceptions for a period of five years from the date of filing pursuant
to section 9403 of the California Uniform Commercial Code.
---------------------------------------------------------------------------------------- -------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO.
TARRANT APPAREL GROUP dba FASHION RESOURCE 00-0000000
---------------------------------------------------------- ----------------------------- -------------------------------------
1B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXXXXXXX XXX XXXXXXX, XX 00000
---------------------------------------------------------------------------------------- -------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO
---------------------------------------------------------- ----------------------------- -------------------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
======================================================================================== =====================================
4. SECURED PARTY THE HONGKONG AND SHANGHAI BANKING CORPORATION 4A. SOCIAL SECURITY NO.
NAME LIMITED TEXTILES AND GARMENT DIVISION FEDERAL TAX NO. OR BANK
MAILING ADDRESS 0 XXXXXX XXXX XXXXXXX TRANSIT AND A.B.A. NO.
CITY HONGKONG STATE HONGKONG ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
5. ASSIGNEE OF SECURED PARTY (If Any) 5A. SOCIAL SECURITY NO.
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
SEE ATTACHED
EXHIBIT A
---------------- ------------------------------- -------------------------------
7. CHECK |X| 7A. |_| PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT
IF APPLICABLE ARE ALSO COVERED REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a)
ITEM:
|_|(1) |_|(2) |_|(3) |_|(4)
----------------- ------------------------------ -------------------------------
8. CHECK |X| |_| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC
IF APPLICABLE ss. 9105(1)(n)
--------------------------------------------------------------------------------
9. DATE:
SIGNATURE(S) OF DEBTOR(S) SECRETARY, TREASURER
--------------------------------------------------------------------------------
TARRANT APPAREL GROUP DBA
FASHION RESOURCE
TYPE OR PRINT NAME(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
[ILLEGIBLE]
SIGNATURE OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
================================================================================
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER
AND FILING OFFICER)
================================================================================
11. Return Copy to,
NAME XXXXXX XXXX
ADDRESS THE HONGKONG AND SHANGHAI BANKING
CITY AND CORPORATION LIMITED
STATE TEXTILES AND GARMENT DIVISION
ZIP CODE 0 XXXXXX XXXX XXXXXXX
XXXXXXXX
================================================================================
FORM UCC - 1--
Approved by the Secretary of State
================================================================================
"EXHIBIT A"
TO UCC-1 FINANCING STATEMENT
This Financing Statement is pari passu with another financing statement
between Debtor and Secured Party filed on even date herewith which also covers
the following types or items of property. The undersigned, FASHION RESOURCE, A
CALIFORNIA CORPORATION ("Debtor"), hereby grants THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED ("Bank") a security interest in the following:
All funds (monies) now or hereafter payable to Debtor by NationsBanc
Commercial Corporation ("NationsBanc"), that are assigned to Bank by NationsBanc
and Debtor pursuant to the Tripartite Agreement between NationsBanc, Debtor and
Bank dated ________________, 1995.
FINANCING STATEMENT is presented for filing and will remain effective with
certain exceptions for a period of five years from the date of filing pursuant
to section 9403 of the California Uniform Commercial Code.
---------------------------------------------------------------------------------------- -------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO
TARRANT APPAREL GROUP dba FASHION RESOURCE 00-0000000
---------------------------------------------------------- ----------------------------- -------------------------------------
1B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXXXXXXX XXX XXXXXXX, XX 00000
---------------------------------------------------------------------------------------- -------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO
---------------------------------------------------------- ----------------------------- -------------------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
======================================================================================== =====================================
4. SECURED PARTY THE HONGKONG AND SHANGHAI BANKING CORPORATION 4A. SOCIAL SECURITY NO..
NAME LIMITED TEXTILES AND GARMENT DIVISION FEDERAL TAX NO. OR BANK
MAILING ADDRESS 0 XXXXXX XXXX XXXXXXX TRANSIT AND A.B.A. NO.
CITY HONGKONG STATE HONGKONG ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO..
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
SEE ATTACHED
EXHIBIT A
---------------- ------------------------------- -------------------------------
7. CHECK |X| 7A. |_| PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT
IF APPLICABLE ARE ALSO COVERED REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a)
ITEM:
|_|(1) |_|(2) |_|(3) |_|(4)
----------------- ------------------------------ -------------------------------
8. CHECK |X| |_| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC
IF APPLICABLE ss. 9105(1)(n)
--------------------------------------------------------------------------------
9. DATE:
SIGNATURE(S) OF DEBTOR(S) SECRETARY/TREASURER
--------------------------------------------------------------------------------
TARRANT APPAREL GROUP DBA
FASHION RESOURCE
TYPE OR PRINT NAME(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
[ILLEGIBLE]
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
================================================================================
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER
AND FILING OFFICER)
================================================================================
11. Return Copy to,
NAME XXXXXX XXXX
ADDRESS THE HONGKONG AND SHANGHAI BANKING
CITY AND CORPORATION LIMITED
STATE TEXTILES AND GARMENT DIVISION
ZIP CODE 0 XXXXXX XXXX XXXXXXX
XXXXXXXX
================================================================================
FORM UCC - 1--
Approved by the Secretary of State
================================================================================
"EXHIBIT A"
TO UCC-1 FINANCING STATEMENT
This Financing Statement is pari passu with another financing statement
between Debtor and Secured Party filed on even date herewith which also covers
the following types or items of property. The undersigned, FASHION RESOURCE, A
CALIFORNIA CORPORATION ("Debtor"), hereby grants THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED ("Bank") a security interest in the following:
All inventory now owned or hereafter acquired by the Debtor including, but
not limited to, all raw materials, work in process, finished goods, merchandise,
parts and supplies of every kind and description, including inventory
temporarily out of the Debtor's custody or possession, together with all returns
on accounts, now acquired or to be acquired by Debtor, from Tarrant Co. Ltd., or
its affiliates (the "Inventory").
All now existing or hereafter made, compiled or acquired books and
records, including electronic data, relating to the foregoing Inventory and
information storage devices and media containing such books and records ("Books
and Records").
THIS FINANCING STATEMENT is presented for filing and will remain effective, with
certain exceptions for a period of five years from the date of filing, pursuant
to section 9403 of the California Uniform Commercial Code.
---------------------------------------------------------------------------------------- -------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO
TARRANT APPAREL GROUP dba FASHION RESOURCE 00-0000000
---------------------------------------------------------- ----------------------------- -------------------------------------
1B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXXXXXXX XXX XXXXXXX, XX 00000
---------------------------------------------------------------------------------------- -------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO
---------------------------------------------------------- ----------------------------- -------------------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
======================================================================================== =====================================
4. SECURED PARTY THE HONGKONG AND SHANGHAI BANKING CORPORATION 4A. SOCIAL SECURITY NO..
NAME LIMITED TEXTILES AND GARMENT DIVISION FEDERAL TAX NO. OR BANK
MAILING ADDRESS 0 XXXXXX XXXX XXXXXXX TRANSIT AND A.B.A. NO.
CITY HONGKONG STATE HONGKONG ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO..
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
SEE ATTACHED
EXHIBIT A
---------------- ------------------------------- -------------------------------
7. CHECK |X| 7A. |_| PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT
IF APPLICABLE ARE ALSO COVERED REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a)
ITEM:
|_|(1) |_|(2) |_|(3) |_|(4)
----------------- ------------------------------ -------------------------------
8. CHECK |X| |_| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC
IF APPLICABLE ss. 9105(1)(n)
--------------------------------------------------------------------------------
9. DATE:
SIGNATURE(S) OF DEBTOR(S) SECRETARY/TREASURER
--------------------------------------------------------------------------------
TARRANT APPAREL GROUP DBA
FASHION RESOURCE
TYPE OR PRINT NAME(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
[ILLEGIBLE]
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
THE HONGKONG AND SHANGHAI BANKING
CORPORATION LIMITED
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
================================================================================
11. Return Copy to,
NAME XXXXXX XXXX
ADDRESS THE HONGKONG AND SHANGHAI BANKING
CITY AND CORPORATION LIMITED
STATE TEXTILES AND GARMENT DIVISION
ZIP CODE 0 XXXXXX XXXX XXXXXXX
XXXXXXXX
================================================================================
FORM UCC - 1--
Approved by the Secretary of State
================================================================================
"EXHIBIT A"
TO UCC-1 FINANCING STATEMENT
This Financing Statement is pari passu with another financing statement
between Debtor and Secured Party filed on even date herewith which also covers
the following types or items of property. The undersigned, FASHION RESOURCE, A
CALIFORNIA CORPORATION ("Debtor"), hereby grants THE HONGKONG AND SHANGHAI
BANKING CORPORATION LIMITED ("Bank") a security interest in the following:
All inventory now owned or hereafter acquired by the Debtor including, but
not limited to, all raw materials, work in process, finished goods, merchandise,
parts and supplies of every kind and description, including inventory
temporarily out of the Debtor's custody or possession, together with all returns
on accounts, now acquired or to be acquired by Debtor, from Tarrant Co. Ltd., or
its affiliates (the "Inventory").
All now existing or hereafter made, compiled or acquired books and
records, including electronic data, relating to the foregoing Inventory and
information storage devices and media containing such books and records ("Books
and Records").
UNIFORM COMMERCIAL CODE FINANCING STATEMENT FORM UCC [ILLEGIBLE]
IMPORTANT--Read Instructions on back before completing form
--------------------------------------------------------------------------------
This FINANCING STATEMENT is presented for filing and will remain effective, with
certain exceptions, for a period of five years from the date of filing, pursuant
to Section 9403 of the California Uniform Commercial Code.
---------------------------------------------------------------------------------------- -------------------------------------
1. DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL) 1A. SOCIAL SECURITY OR FEDERAL TAX NO
TARRANT APPAREL GROUP DBA FASHION RESOURCE 00-0000000
---------------------------------------------------------- ----------------------------- -------------------------------------
1B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXXXXXXX XXX XXXXXXX, XX 00000
---------------------------------------------------------------------------------------- -------------------------------------
2. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO
---------------------------------------------------------- ----------------------------- -------------------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
======================================================================================== =====================================
4. SECURED PARTY STANDARD CHARTERED BANK 4A. SOCIAL SECURITY NO..
NAME CORPORATE BANKING GROUP FEDERAL TAX NO. OR BANK
MAILING ADDRESS XXXX 000-0, XXXXX 0, XXXXXX XXX XXX XXXXX TRANSIT AND A.B.A. NO.
CITY KOWLOON HONGKONG STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO..
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------- -------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record
when required by instruction 4).
SEE ATTACHED EXHIBIT A
---------------- ------------------------------- -------------------------------
7. CHECK |X| 7A. |_| PRODUCTS OF COLLATERAL 7B. DEBTOR(S) SIGNATURE NOT
IF APPLICABLE ARE ALSO COVERED REQUIRED IN ACCORDANCE
WITH INSTRUCTION 5(a)
ITEM:
|_|(1) |_|(2) |_|(3) |_|(4)
----------------- ------------------------------ -------------------------------
8. CHECK |X| |_| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC
IF APPLICABLE ss. 9105(1)(n)
--------------------------------------------------------------------------------
9. DATE: 12/19/96
/s/ Xxxxxxx Xxxxx
SIGNATURE(S) OF DEBTOR(S) SECRETARY/TREASURER
--------------------------------------------------------------------------------
TARRANT APPAREL GROUP DBA FASHION RESOURCE
TYPE OR PRINT NAME(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
[ILLEGIBLE]
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
STANDARD CHARTER BANK
TYPE OR PRINT NAME(S) OF SECURED PARTY
================================================================================
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER
AND FILING OFFICER)
================================================================================
11. Return Copy to
NAME STANDARD CHARTERED BANK
ADDRESS CORPORATE BANKING GROUP
CITY AND XXXX 000-0, XXXXX 0, XXXXXX XXX XXX
XXXXX 833 XXXXXX SHA WAN RD PLAZA
ZIP CODE KOWLOON HONG KONG
================================================================================
FORM UCC - 1--
(1) FILING OFFICER COPY Approved by the Secretary of State
================================================================================
"EXHIBIT A"
TO UCC-1 FINANCING STATEMENT
All inventory now owned or hereafter acquired by the Debtor from Tarrant
Co. Ltd., or its affiliates (the "Inventory") including, but not limited to, all
raw materials, work in process, finished goods, merchandise, parts and supplies
of every kind and description, including inventory temporarily out of the
Debtor's custody or possession, together with all returns on accounts, now
acquired or to be acquired by Debtor.
All now existing or hereafter made, compiled or acquired books and
records, including electronic data, relating to the foregoing Inventory and
information storage devices and media containing such books and records ("Books
and Records").
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT CHANGE - FORM UCC-2
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. FILE NO. OF ORIG. 1A. DATE OF FILING OF 1B. DATE OF ORIG. 1C. PLACE OF FILING ORIG.
FINANCING STATEMENT ORIG. FINANCING STATEMENT FINANCING STATEMENT FINANCING STATEMENT
[ILLEGIBLE]48385 07/21/94 06/10/94 CA SECRETARY OF STATE
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.
TARRANT APPAREL GROUP FEDERAL TAX NO.
00-0000000
---------------------------------------------------------------------------------------- ----------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXXXXXXX XXX XXXXXXX, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY NO..
FEDERAL TAX NO.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.
NAME NATIONSBANK OF GEORGIA, N.A. FEDERAL TAX NO. OR BANK
NATIONSBANC COMMERCIAL CORPORATION TRANSIT AND A.B.A. NO.
MAILING ADDRESS P.O. BOX 4095
CITY ATLANTA STATE GA ZIP CODE 30302-4095
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |X| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |_| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
================================================================================
7. Secured Party hereby releases all the collateral described in the Financing
Statement bearing the file number shown above EXCEPT the following:
All of Debtor's accounts, outstanding as of August 23, 1999 which were
created by or arose from its sales of goods or rendition of services to any of
the entities listed on Exhibit A attached hereto and incorporated herein by this
reference, and all instruments, contract rights, chattel paper, documents,
general intangibles relating to or arising out of such sales of goods or
rendition of services, and all returned, reclaimed or repossessed goods and all
books and records relating to or pertaining to any of the foregoing, and all
proceeds and products of the foregoing, in any form. THIS FINANCING STATEMENT IS
A PARTIAL RELEASE ONLY.
================================================================================
8. (Date) ______________
________________________________________________________________________________
By:
-----------------------------------------------------------------------------
SIGNATURE(S) OF SECURED DEBTOR(S) (TITLE)
See attached page for signature of Secured Party
--------------------------------------------------------------------------------
By:
-----------------------------------------------------------------------------
SIGNATURE(S) OF PARTY(IES) (TITLE)
================================================================================
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME BANK OF AMERICA, N.A.
ADDRESS 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
CITY AND Los Angeles, California 90071-2901
STATE Attn: Xxxxxx Xxxxxx
(1) FILING OFFICER COPY UNIFORM COMMERCIAL CODE-FORM UCC-2
STANDARD FORM - FILING FEE
Approved by the Secretary of State
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT CHANGE - FORM UCC-2
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. FILE NO. OF ORIG. 1A. DATE OF FILING OF 1B. DATE OF ORIG. 1C. PLACE OF FILING ORIG.
FINANCING STATEMENT ORIG. FINANCING STATEMENT FINANCING STATEMENT FINANCING STATEMENT
[ILLEGIBLE]48385 07/21/94 06/10/94 CA SECRETARY OF STATE
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.
TARRANT APPAREL GROUP FEDERAL TAX NO.
00-0000000
---------------------------------------------------------------------------------------- ----------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXXXXXXX XXX XXXXXXX, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY NO.
FEDERAL TAX NO.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY 4A. SOCIAL SECURITY NO.
NAME NATIONSBANK OF GEORGIA, N.A. FEDERAL TAX NO. OR BANK
NATIONSBANC COMMERCIAL CORPORATION TRANSIT AND A.B.A. NO.
MAILING ADDRESS P.O. BOX 4095
CITY ATLANTA STATE GA ZIP CODE 30302-4095
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |X| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |_| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
================================================================================
7. Secured Party hereby releases all the collateral described in the Financing
Statement bearing the file number shown above EXCEPT the following:
All of Debtor's accounts, outstanding as of August 23, 1999 which were
created by or arose from its sales of goods or rendition of services to any of
the entities listed on Exhibit A attached hereto and incorporated herein by this
reference, and all instruments, contract rights, chattel paper, documents,
general intangibles relating to or arising out of such sales of goods or
rendition of services, and all returned, reclaimed or repossessed goods and all
books and records relating to or pertaining to any of the foregoing, and all
proceeds and products of the foregoing, in any form. THIS FINANCING STATEMENT IS
A PARTIAL RELEASE ONLY.
================================================================================
8. (Date) ______________
________________________________________________________________________________
By:
-----------------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
See attached page for signature of Secured Party
--------------------------------------------------------------------------------
By:
-----------------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
================================================================================
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME BANK OF AMERICA, N.A.
ADDRESS 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
CITY AND Los Angeles, California 90071-2901
STATE Attn: Xxxxxx Xxxxxx
(2) ACKNOWLEDGEMENT COPY UNIFORM COMMERCIAL CODE-FORM UCC-2
STANDARD FORM - FILING FEE
Approved by the Secretary of State
SIGNATURE PAGE TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANK OF GEORGIA, N.A. AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
Bank of America, N.A., f/k/a Bank of America National Trust and Savings
Association, successor by merger to Bank of America, N.A., f/k/a NationsBank,
N.A., successor by merger to NationsBank of Georgia, N.A. and NationsBanc
Commercial Corporation.
By: /s/ [ILLEGIBLE] 8/31/99
-------------------------
Its: S.V.P.
------------------------
SIGNATURE PAGE TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANK OF GEORGIA, N.A. AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
Bank of America, N.A., f/k/a Bank of America National Trust and Savings
Association, succesSor by merger to Bank of America, N.A., f/k/a NationsBank,
N.A., successor by merger to NationsBank of Georgia, N.A. and NationsBanc
Commercial Corporation.
By: /s/ [ILLEGIBLE] 8/31/99
-------------------------
Its: S.V.P.
------------------------
EXHIBIT A TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANK OF GEORGIA, N.A. AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
CATO CORP
XXXXXX BUYING CORPORATION
MARSHALLS, INC.
XXXX STORES INC.
XXXXXX XXXXXXX LTD
CONCORD BUYING GROUP
DOTS STORE INC.
XXXXXX XXXXX INC.
PENNSYLVANIA FASHIONS
PREMIER DYE & FINISHING
XXXXX RIVER TRADERS
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE FINANCING STATEMENT CHANGE FORM UCC-2
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. FILE NO. OF ORIG. 1A. DATE OF FILING OF 1B. DATE OF ORIG. 1C. PLACE OF FILING ORIG.
FINANCING STATEMENT ORIG. FINANCING STATEMENT FINANCING STATEMENT FINANCING STATEMENT
9[ILLEGIBLE]1729 10/04/93 9/23/93 CA SECRETARY OF STATE
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO..
TARRANT APPAREL GROUP FEDERAL TAX NO. 00-0000000
---------------------------------------------------------------------------------------- ----------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXX XXX XXXXXXX, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY NO..
FEDERAL TAX NO.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY NATIONSBANC COMMERCIAL CORPORATION 4A. SOCIAL SECURITY NO..
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS P.O. BOX 4095 TRANSIT AND X.X.X. XX.
XXXX XXXXXXX XXXXX XX XXX XXXX 00000-0000
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO..
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |X| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |_| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
7. Secured Party hereby releases all the collateral described in the Financing
Statement bearing the file number shown above EXCEPT the following:
All of Debtor's present and future accounts created by or arising from its
sales of goods or rendition of services to any of the entities listed on Exhibit
A attached hereto and incorporated herein by this reference, and all
instruments, contract rights, chattel paper, documents, general intangibles
relating to or arising out of such sales of goods or rendition of services, and
all returned, reclaimed or repossessed goods and all books and records relating
to or pertaining to any of the foregoing, and all proceeds and products of the
foregoing, in any form. THIS FINANCING STATEMENT IS A PARTIAL RELEASE ONLY.
--------------------------------------------------------------------------------
8. (Date) 8-23 1999
___________________________________________________________________
By: /s/
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
See attached page for signature of Secured Party
-------------------------------------------------------------------
By: /s/
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME BANK OF AMERICA, N.A.
ADDRESS 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
CITY AND Los Angeles, CA 90071-2901
STATE Attn: Xxxxxx Xxxxxx
(1) FILING OFFICER COPY
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE-FORM UCC-2
Approved by the Secretary of State
SIGNATURE PAGE TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
Bank of America, N.A., f/k/a Bank of America National Trust and Savings
Association, successor by merger to Bank of America, N.A., f/k/a NationsBank,
N.A., successor by merger to NationsBanc Commercial Corporation
By: [Illegible Signature]
------------------------------
Its: Senior Vice-President 8/23/99
-----------------------------
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE FINANCING STATEMENT CHANGE FORM UCC-2
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. FILE NO. OF ORIG. 1A. DATE OF FILING OF 1B. DATE OF ORIG. 1C. PLACE OF FILING ORIG.
FINANCING STATEMENT ORIG. FINANCING STATEMENT FINANCING STATEMENT FINANCING STATEMENT
9[ILLEGIBLE]01729 10/04/93 9/23/93 CA SECRETARY OF STATE
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO.
TARRANT APPAREL GROUP FEDERAL TAX NO. 00-0000000
---------------------------------------------------------------------------------------- ----------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 X. XXXXXXXXXX XXXX XXX XXXXXXX, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY NO.
FEDERAL TAX NO.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY NATIONSBANC COMMERCIAL CORPORATION 4A. SOCIAL SECURITY NO.
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS P.O. BOX 4095 TRANSIT AND X.X.X. XX.
XXXX XXXXXXX XXXXX XX XXX XXXX 00000-0000
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO.
NAME FEDERAL TAX NO. OR BANK
MAILING ADDRESS TRANSIT AND A.B.A. NO.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |X| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |_| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
7. Secured Party hereby releases all the collateral described in the Financing
Statement bearing the file number shown above EXCEPT the following:
All of Debtor's present and future accounts created by or arising from its
sales of goods or rendition of services to any of the entities listed on Exhibit
A attached hereto and incorporated herein by this reference, and all
instruments, contract rights, chattel paper, documents, general intangibles
relating to or arising out of such sales of goods or rendition of services, and
all returned, reclaimed or repossessed goods and all books and records relating
to or pertaining to any of the foregoing, and all proceeds and products of the
foregoing, in any form. THIS FINANCING STATEMENT IS A PARTIAL RELEASE ONLY.
--------------------------------------------------------------------------------
8. (Date) 8-23 1999
___________________________________________________________________
By: /s/
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
See attached page for signature of Secured Party
-------------------------------------------------------------------
By: /s/
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME BANK OF AMERICA, N.A.
ADDRESS 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
CITY AND Los Angeles, CA 90071-2901
STATE Attn: Xxxxxx Xxxxxx
(2) ACKNOWLEDGMENT COPY
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE-FORM UCC-2
Approved by the Secretary of State
SIGNATURE PAGE TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
Bank of America, N.A., f/k/a Bank of America National Trust and Savings
Association, successor by merger to Bank of America, N.A., f/k/a NationsBank,
N.A., successor by merger to NationsBanc Commercial Corporation
By: [Illegible Signature]
-----------------------------
Its: Senior Vice-President 8/23/99
-----------------------------
EXHIBIT A TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
CATO CORP
XXXXXX BUYING CORPORATION
MARSHALLS, INC.
XXXX STORES INC.
XXXXXX XXXXXXX LTD
CONCORD BUYING GROUP
DOTS STORE INC.
XXXXXX XXXXX INC.
PENNSYLVANIA FASHIONS
PREMIER DYE & FINISHING
XXXXX RIVER TRADERS
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE FINANCING STATEMENT CHANGE FORM UCC FORM UCC-2
This STATEMENT is presented for filing pursuant to the California Uniform
Commercial Code
------------------------------ ---------------------------- ---------------------------- ----------------------------
1. FILE NO. OF ORIG. 1A. DATE OF FILING OF 1B. DATE OF ORIG. 1C. PLACE OF FILING ORIG.
FINANCING STATEMENT ORIG. FINANCING STATEMENT FINANCING STATEMENT FINANCING STATEMENT
9[ILLEGIBLE]8385 7/21/94 6/10/94 CA SECRETARY OF STATE
---------------------------------------------------------------------------------------- ----------------------------
2. DEBTOR (LAST NAME FIRST) 2A. SOCIAL SECURITY NO..
TARRANT APPAREL GROUP FEDERAL TAX NO.
00-0000000
---------------------------------------------------------------------------------------- ----------------------------
2B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. XXX CODE
0000 XXXX XXXXXXXXXX XXXX XXX XXXXXXX, XX 00000
----------------------------------------------------------- ---------------------------- ----------------------------
3. ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST) 3A. SOCIAL SECURITY NO..
FEDERAL TAX NO.
----------------------------------------------------------- ---------------------------- ----------------------------
3B. XXXXXXX XXXXXXX 0X. XXXX, XXXXX 0X. ZIP CODE
----------------------------------------------------------- ---------------------------- ----------------------------
4. SECURED PARTY NATIONSBANC OF GEORGIA, N.A. 4A. SOCIAL SECURITY NO..
NATIONSBANC COMMERCIAL CORPORATION FEDERAL TAX NO. OR BANK
NAME TRANSIT AND A.B.A. NO.
MAILING ADDRESS P.O. BOX 4095
CITY Atlanta STATE GA ZIP CODE 30302-4095
---------------------------------------------------------------------------------------- ----------------------------
5. ASSIGNEE OF SECURED PARTY (If Any) 5A. Social Security No..
NAME Federal Tax No. or Bank
MAILING ADDRESS Transit and A.B.A. No.
CITY STATE ZIP CODE
---------------------------------------------------------------------------------------------------------------------
6. A |_| CONTINUATION - The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and
date shown above is continued. If collateral is crops or timber,
check here |_| and insert description of real property on which
growing or to be grown in Item 7 below.
--------------------------------------------------------------------------------
B |X| RELEASE - From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party
releases the collateral described in item 7 below.
--------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured
Party has assigned to the Assignee above named, all the Secured
Party's rights under the Financing Statement bearing the file
number shown above in the collateral described in item 7 below.
--------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured
Party no longer claims a security interest under the Financing
Statement bearing the file number shown above.
--------------------------------------------------------------------------------
E |_| AMENDMENT - The Financing Statement bearing the file number
shown above is amended as set forth in item 7 below. (Signature of
Debtor required on all amendments.)
--------------------------------------------------------------------------------
F |_| OTHER
--------------------------------------------------------------------------------
7. Secured Party hereby releases all the collateral described in the Financing
Statement bearing the file number shown above EXCEPT the following:
All of Debtor's present and future accounts created by or arising from its
sales of goods or rendition of services to any of the entities listed on Exhibit
A attached hereto and incorporated herein by this reference, and all
instruments, contract rights, chattel paper, documents, general intangibles
relating to or arising out of such sales of goods or rendition of services, and
all returned, reclaimed or repossessed goods and all books and records relating
to or pertaining to any of the foregoing, and all proceeds and products of the
foregoing, in any form. THIS FINANCING STATEMENT IS A PARTIAL RELEASE ONLY.
--------------------------------------------------------------------------------
8. (Date) 8-23 1999
___________________________________________________________________
By: /s/
-------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S) (TITLE)
See attached page for signature of Secured Party
-------------------------------------------------------------------
By: /s/
-------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
--------------------------------------------------------------------------------
9. This Space for Use of Filing Officer
(Date, Time, Filing Office)
--------------------------------------------------------------------------------
10. Return Copy to
NAME BANK OF AMERICA, N.A.
ADDRESS 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
CITY AND Xxx Xxxxxxx, XX 00000-0000
STATE Attn: Xxxxxx Xxxxxx
(*) FILING OFFICER COPY
STANDARD FORM -- FILING FEE UNIFORM COMMERCIAL CODE-FORM UCC-2
Approved by the Secretary of State
SIGNATURE PAGE TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANC OF GEORGIA, N.A.
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
BANK OF AMERICA,, N.A., A/K/A/ BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, SUCCESSOR BY MERGER TO BANK OF AMERICA, N.A., F/K/A/ NATIONSBANK,
N.A., SUCCESSOR BY MERGER TO NATIONSBANK OF GEORGIA, N.A. AND NATIONSBANK
COMMERCIAL CORPORATION.
By: [Illegible Signature]
------------------------------
Its: Senior Vice-President 8/23/99
-----------------------------
STATE OF CALIFORNIA
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT CHANGE - FORM UCC-2
This STATEMENT is presented for filing pursuant to the California Uniform Commercial Code
===================================================================================================================
1 File NO OF ORIG FINANCING 1A DATE OF FILING OF ORIG 1B DATE OF FILING OF ORIG 1C PLACE OF FILING ORIG
STATEMENT FINANCING STATEMENT FINANCING STATEMENT FINANCING STATEMENT
[ILLEGIBLE] 48385 7/21/94 6/10/94 CA Secretary of State
===================================================================================================================
2 DEBTOR LAST NAME FIRST, 2A SOCIAL SECURITY NO
FEDERAL TAX NO
TARRANT APPAREL GROUP 00-0000000
-------------------------------------------------------------------------------------------------------------------
2B XXXXXXX XXXXXXX 0X XXXX XXXXX 2D ZIP CODE
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx Xxx Xxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------------------
3 ADDITIONAL DEBTOR IF ANY LAST NAME FIRST 3A SOCIAL SECURITY NO
FEDERAL TAX NO
-------------------------------------------------------------------------------------------------------------------
3B MAILING ADDRESS 3C CITY STATE 3D ZIP CODE
===================================================================================================================
4 SECURED PARTY 4A SOCIAL SECURITY NO
FEDERAL TAX NO OR BANK
TRANSIT AND A.B.A. NO
NAME NATIONSBANK OF GEORGIA, N.A.
NATIONSBANC COMMERCIAL CORPORATION
MAILING XXXXXXX X.X. Xxx 000
XXXX Xxxxxxx XXXXX XX ZIP CODE 30302-4095
===================================================================================================================
5 ASSIGNEE OF SECURED PARTY (IF ANY) 5A SOCIAL SECURITY NO
FEDERAL TAX NO OR BANK
TRANSIT AND A.B.A. NO
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
===================================================================================================================
6 A |_| CONTINUATION - The original Financing Statement between the foregoing Debtor and Secured Party bearing
the file number and date shown above is continued. If collateral is crops or timber, check here |_|
and insert description of real property on which growing or to be grown in item 7 below.
-------------------------------------------------------------------------------------------------------------
B |X| RELEASE - From the collateral described in the Financing Statement bearing the file number shown above,
the Secured Party releases the collateral described in item 7 below.
-------------------------------------------------------------------------------------------------------------
C |_| ASSIGNMENT - The Secured Party certifies that the Secured Party has assigned to the Assignee above
named, all the Secured Party's rights under the Financing Statement bearing the file number shown above
in the collateral described in item 7 below.
-------------------------------------------------------------------------------------------------------------
D |_| TERMINATION - The Secured Party certifies that the Secured Party no longer claims a security interest
under the Financing Statement bearing the file number shown above.
-------------------------------------------------------------------------------------------------------------
|_| AMENDMENT - The Financing Statement bearing the file number shown above is amended as set forth in item
7 below. (Signature of Debtor required on all amendments.)
-------------------------------------------------------------------------------------------------------------
F |_| OTHER
===================================================================================================================
7 Secured Party hereby releases all the collateral described in the Financing Statement bearing the file number
shown above EXCEPT the following:
All of Debtor's present and future accounts created by or arising from its sales of goods or rendition of
services to any of the entities listed on Exhibit A attached hereto and incorporated herein by this reference,
and all instruments, contract rights, chattel paper, documents, general intangibles relating to or arising out
of such sales of goods or rendition of services, and all returned, reclaimed or repossessed goods and all books
and records relating to or pertaining to any of the foregoing, and all proceeds and products of the foregoing, in
any form. THIS FINANCING STATEMENT IS A PARTIAL RELEASE ONLY.
===================================================================================================================
8 (Date) 8-23-99 | 9. This Space for Use of
---------------------------- | Filing Officer
| (Date, Time, Filing
| Officer)
--
--------------------------------------------------------------------------------
1
By
----------------------------------------------------------------------------- 2
SIGNATURE OF DEBTOR(S) (TITLE)
3
See attached page for signature of Secured Party
-------------------------------------------------------------------------------- 4
5
By
----------------------------------------------------------------------------- 6
SIGNATURE(S) OF SECURED PARTY(IES) (TITLE)
================================================================================ 7
Return Copy to
8
------------------------------------
NAME BANK OF AMERICA, N.A. 9
ADDRESS 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
CITY AND Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
STATE
Attn: Xxxxxx Xxxxxx
------------------------------------
(2) ACKNOWLEDGEMENT COPY
STANDARD FORM - FILING FEE Uniform Commercial Code - Form UCC-2
Approved by Secretary of State
SIGNATURE PAGE TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANK OF GEORGIA, N.A. AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
Bank of America, NA., f/k/a Bank of America National Trust and Savings
Association, successor by merger to Bank of America, N.A., f/k/a NationsBank,
N.A., successor by merger to NationsBank of Georgia, N.A. and NationsBanc
Commercial Corporation
By: /s/ [ILLEGIBLE]
-----------------------------
Its: SR. VICE PRES. 8/23/99
----------------------------
EXHIBIT A TO UCC FINANCING STATEMENT PARTIAL RELEASE
BETWEEN
TARRANT APPAREL GROUP, AS DEBTOR
AND
NATIONSBANK OF GEORGIA, N.A. AND
NATIONSBANC COMMERCIAL CORPORATION, AS SECURED PARTY
CATO CORP
XXXXXX BUYING CORPORATION
MARSHALLS, INC.
XXXX STORES INC.
XXXXXX XXXXXXX LTD
CONCORD BUYING GROUP
DOTS STORE INC.
XXXXXX XXXXX INC.
PENNSYLVANIA FASHIONS
PREMIER DYE & FINISHING
XXXXX RIVER TRADERS
This FINANCING STATEMENT is presented for filing and will remain
effective with certain exceptions for a period
of five years from the date of filing pursuant to section 9403 of the
California Uniform Commercial Code.
=============================================================================================================
1 DEBTOR (LAST NAME FIRST IF AN INDIVIDUAL) 1A SOCIAL SECURITY OR
FEDERAL TAX NO
Tarrant Apparel Group
1B MAILING ADDRESS 1C CITY STATE 1D ZIP CODE
0000 X. Xxxxxxxxxx Xxxx. Xxx Xxxxxxx, XX 00000
=============================================================================================================
2 ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST-IF AN INDIVIDUAL) 2A SOCIAL SECURITY OR
FEDERAL XXX XX
0X XXXXXXX XXXXXXX 0X XXXX XXXXX 2D ZIP CODE
=============================================================================================================
3 DEBTOR'S TRADE NAME OR STYLES (IF ANY) 3A FEDERAL TAX NUMBER
=============================================================================================================
4 SECURED PARTY 4A SOCIAL SECURITY NO
FEDERAL TAX NO OR BANK
TRANSIT AND A.B.A. NO
NAME THE CIT GROUP/COMMERCIAL SERVICES, INC.
MAILING ADDRESS 000 X. Xxxxx Xxx., 0xx Xxxxx
XXXX Xxx Xxxxxxx XXXXX XX ZIP CODE 90072
=============================================================================================================
5 ASSIGNEE OF SECURED PARTY (IF ANY) 5A SOCIAL SECURITY NO
FEDERAL TAX NO OR BANK
TRANSIT AND A.B.A. NO
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
=============================================================================================================
6 This FINANCING STATEMENT covers the following types or items of property (include description of real
property on which located and owner of record when required by instruction 4).
See attached page 2
=============================================================================================================
7 CHECK |X| 7A PRODUCTS OF COLLATERAL 7B DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
IF APPLICABLE ARE ALSO COVERED INSTRUCTION 5(a) ITEM:
(1) (2) (3) (4)
=============================================================================================================
8. CHECK |X| DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC ss. 9105 (n)
IF APPLICABLE
=============================================================================================================
9 Date C | 10. THIS SPACE FOR USE
O | OF FILING OFFICER
SIGNATURE(S) OF DEBTOR(S) /s/ [ILLEGIBLE] 9/28/99 D | (DATE, TIME, FILING
-------------------------------------------------------------------------------- E | NUMBER AND FILING
| OFFICER)
Tarrant Apparel Group 1 |
|
TYPE OR PRINT NAME(S) OF DEBTOR(S) 2 |
-------------------------------------------------------------------------------- |
3 |
|
SIGNATURE(S) OF SECURED PARTY(IES) 4 |
-------------------------------------------------------------------------------- |
5 |
|
6 |
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES) |
================================================================================ 7 |
11. Return Copy to: |
8 |
|
NAME Del Xxxx/Xxx Xxxxxxxx 9 |
ADDRESS The CIT Group/Commercial Services, Inc. |
CITY AND 000 X. Xxxxx Xxx., 0xx Xx0000-0000 |
XXXXX Xxx Xxxxxxx, XX 00000 |
================================================================================ |
FORM UCC1. |
Approved by the Secretary of State |
|========================
[ILLEGIBLE] Printed by UCC Control -
Xxxx S[ILLEGIBLE]
229 [ILLEGIBLE] Suite C
Santa Fe [ILLEGIBLE]
================================================================================
1 Name and Address if Debtor 2 SECURED PARTY (Last Name
(Last Name First if a Person) First if a Person)
Tarrant Apparel Group THE CIT GROUP/COMMERCIAL SERVICES, INC.
0000 X. Xxxxxxxxxx Xxxx. 000 X. Xxxxx Xxx., 0xx Xxxxx
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Social Security Tax ID# Social Security Tax ID#
================================================================================
1A Name and Address of Debtor 2 SECURED PARTY (Last Name
(Last Name First of a Person) First if a Person)
Social Security Tax ID# Social Security Tax ID#
================================================================================
5 This Additional Sheet covers the following Additional types (or items) of
Property
Collateral shall mean and include: (a) all of Debtors's present and future
accounts and accounts receivable created by or arising from its sales of goods
or rendition of services to Express, LLC, Lane Xxxxxx, Inc., The Limited, Inc.,
Sears Xxxxxxx and Company and Wal-Mart Stores, Inc., including, without
limitation, all accounts and accounts receivables under any of its trade names
or styles, or through any if its divisions), and all instruments, documents,
contract rights, chattel paper, general intangibles arising out on such sale of
goods or rendition of services (collectively the "Accounts"); (b) all of
Debtor's present and future deposits, balances, sums and credits in Secured
Party's possession or control relating to the Accounts; (c) all Debtors present
and future monies, securities and other property now or hereafter held or
received by or in transit to Secured Party from or for Debtor's account, whether
for safekeeping, pledge, custody, transmission, collection or otherwise relating
to the Accounts; (b) all of Debtors's present and future liens, security
interests, rights, remedies, title and interest in, and in respect of the
Accounts, including, without limitation: (i) rights and remedies under or
relating to guaranties, contracts or suretyship, letter of credit, credit
insurance, or other types of credit enhancements, (ii) rights of stoppage in
transit, rescission, replevin, repossession, reclamation and other rights and
remedies of an unpaid vendor, lien or secured Party, (iii) goods described in
invoices, documents, contracts or instruments with respect to, or otherwise
representing or evidencing accounts or other collateral, including, without
limitation, returned, repossessed and reclaimed goods, and (iv) deposits by and
property of customers or other persons securing the obligations of customers;
(e) all of Debtors's books of account of every kind of nature, purchase and sale
agreements, invoices, ledger cards, computer programs, bills of lading and other
shipping evidence, statements, correspondence, memoranda, credit files and other
data relating to the Accounts, together with the file cabinets or containers in
which the foregoing are stored; and (f) all proceeds and products of the
foregoing, in any form, including, without limitation, insurance proceeds and
any claims against third parties for loss or damage to or destruction of any or
all of the foregoing.
================================================================================
/s/ [ILLEGIBLE]
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies) or Assignee
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies) or Assignee
Tarrant Apparel Group THE CIT GROUP/COMMERCIAL SERVICES, INC.
Type Name of Individual or Type Name of Individual or Business
Business
================================================================================
Printed by UCC Control - Xxxx [ILLEGIBLE]
000 Xxxxxxxx Xx. Xxxxx X Xxxxx Xx [ILLEGIBLE]
This FINANCING STATEMENT is presented for filing and will remain
effective with certain exceptions for a period
of five years from the date of filing pursuant to section 9403 of the
California Uniform Commercial Code.
=============================================================================================================
1 DEBTOR (LAST NAME FIRST IF AN INDIVIDUAL) 1A SOCIAL SECURITY OR
FEDERAL TAX NO
Tarrant Apparel Group
-------------------------------------------------------------------------------------------------------------
1B XXXXXXX XXXXXXX 0X XXXX XXXXX 1D ZIP CODE
0000 X. Xxxxxxxxxx Xxxx. Xxx Xxxxxxx, XX 00000
=============================================================================================================
2 ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST-IF AN INDIVIDUAL) 2A SOCIAL SECURITY OR
FEDERAL TAX NO
-------------------------------------------------------------------------------------------------------------
2B MAILING ADDRESS 2C CITY STATE 2D ZIP CODE
=============================================================================================================
3 DEBTOR TRADE NAME OR STYLES (IF ANY) 3A FEDERAL TAX NUMBER
=============================================================================================================
4 SECURED PARTY 4A SOCIAL SECURITY NO
FEDERAL TAX NO OR BANK
TRANSIT AND A.B.A. NO
NAME THE CIT GROUP/COMMERCIAL SERVICES, INC.
MAILING ADDRESS 000 X. Xxxxx Xxx., 0xx Xxxxx
XXXX Xxx Xxxxxxx XXXXX XX ZIP CODE 90072
=============================================================================================================
5 ASSIGNEE OF SECURED PARTY (IF ANY) 5A SOCIAL SECURITY NO
FEDERAL TAX NO OR BANK
TRANSIT AND A.B.A. NO
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
=============================================================================================================
6 This FINANCING STATEMENT covers the following types or items of property (include description of real
property on which located and owner of record when required by instruction 4).
See attached page 2
=============================================================================================================
7 CHECK |X| 7A PRODUCTS OF COLLATERAL 7B DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
IF APPLICABLE ARE ALSO COVERED INSTRUCTION 5(a) ITEM:
|_| |_| (1) |_| (2) |_| (3) |_| (4)
=============================================================================================================
8. CHECK |X| |_| DEBTOR IS A TRANSMITTING UTILITY IN ACCORDANCE WITH UCC ss. 9105 (n)
IF APPLICABLE
=============================================================================================================
9 Date C | 10. THIS SPACE FOR USE
O | OF FILING OFFICER
SIGNATURE(S) OF DEBTOR(S) D | (DATE, TIME, FILING
-------------------------------------------------------------------------------- E | NUMBER AND FILING
| OFFICER)
Tarrant Apparel Group 1 |
|
TYPE OR PRINT NAME(S) OF DEBTOR(S) 2 |
-------------------------------------------------------------------------------- |
3 |
|
SIGNATURE(S) OF SECURED PARTY(IES) /S/ [ILLEGIBLE] 4 |
-------------------------------------------------------------------------------- |
5 |
THE CIT GROUP/COMMERCIAL SERVICES, INC. |
6 |
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES) |
================================================================================ 7 |
11. Return Copy to: |
8 |
|
NAME Del Xxxx/Xxx Xxxxxxxx 9 |
ADDRESS The CIT Group/Commercial Services, Inc. |
CITY AND 000 X. Xxxxx Xxx., 0xx Xx0000-0000 |
XXXXX Xxx Xxxxxxx, XX 00000 |
|
================================================================================ |
FORM UCC1. |
Approved by the Secretary of State |
=============================================================================================================
[ILLEGIBLE] Printed by UCC Control -
Xxxx S[ILLEGIBLE]
229 [ILLEGIBLE] Suite C
Santa Fe [ILLEGIBLE]
================================================================================
1 Name and Address of Debtor 2 SECURED PARTY (Last Name
(Last Name First of a Person) First of a Person)
Tarrant Apparel Group THE CIT GROUP/COMMERCIAL SERVICES, INC.
0000 X. Xxxxxxxxxx Xxxx. 000 X. Xxxxx Xxx., 0xx Xxxxx
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Social Security Tax ID# Social Security Tax ID#
------------ ----------------
================================================================================
1A Name and Address of Debtor 2 SECURED PARTY (Last Name
(Last Name First of a Person) First of a Person)
Social Security Tax ID# Social Security Tax ID#
------------ ----------------
================================================================================
5 This Additional Sheet covers the following Additional types (or items) of
Property
Collateral shall mean and include: (a) all of Debtors's present and future
accounts and accounts receivable created by or arising from its sales of goods
or rendition of services to Express, LLC, Lane Xxxxxx, Inc., The Limited, Inc.,
Sears Xxxxxxx and Company and Wal-Mart Stores, Inc., including, without
limitation, all accounts and accounts receivables under any of its trade names
or styles, or through any if its division), and all instruments, documents,
contract rights, chattel paper, general intangibles arising out on such sale of
goods or rendition or services (collectively the "Accounts"); (b) all of
Debtor's present and future deposits, balances, sums and credits in Secured
Party's possession or control relating to the Accounts; (c) all Debtor's present
and future monies, securities and other property now or hereafter held or
received by or in transit to Secured Party from or for Debtor's account; whether
for safekeeping, pledge, custody, transmission, collection or otherwise relating
to the Accounts; (b) all of Debtors's present and future liens, security
interests, rights, remedies, title and interest in, and in respect of the
Accounts, including, without limitation: (i) rights and remedies under or
relating to guaranties, contracts or suretyship, letter of credit, credit
insurance, or other types of credit enhancements, (ii) rights of stoppage in
transit, rescission, replevin, repossession, reclamation and other rights and
remedies of an unpaid vendor, lien or secured Party, (iii) goods described in
invoices, documents, contracts or instruments with respect to, or otherwise
representing or evidencing accounts or other collateral, including, without
limitation, returned, repossessed and reclaimed goods, and (iv) deposits by and
property of customers or other persons securing the obligations of customers;
(e) all of Debtors's books of account of every kind of nature, purchase and sale
agreements, invoices, ledger cards, computer programs, bills of lading and other
shipping evidence, statements, correspondence, memoranda, credit files and other
data relating to the Accounts, together with the file cabinets or containers in
which the foregoing are stored; and (f) all proceeds and products of the
foregoing, in any form, including, without limitation, insurance proceeds and
any claims against third parties for loss or damage to or destruction of any or
all of the foregoing.
================================================================================
------------------------------- ----------------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies) or Assignee
------------------------------- ----------------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies) or Assignee
Tarrant Apparel Group THE CIT GROUP/COMMERCIAL SERVICES, INC.
------------------------------- ----------------------------------------------
Type Name of Individual or Type Name of Individual or Business
Business
================================================================================
Printed by UCC Control - Xxxx [ILLEGIBLE]
000 Xxxxxxxx Xx. Xxxxx X Xxxxx Xx [ILLEGIBLE]
0090838000627001 Sent for filing on 5/26/99
FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code and will remain effective, with certain exceptions, for 5
years from date of filing.
--------------------------------------------------------------------------------
A. NAME & TEL. # OF CONTACT AT FILER B. FILING OFFICE ACCT. #
(optional) (optional)
Xxxxxxx Xxxxxxx (000)000-0000
--------------------------------------------------------------------------------
C. RETURN COPY TO: (Name and Mailing Address)
Data File Services
X.X. Xxx 000
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION (if applicable) |_| LESSOR/LESSEE
|_| CONSIGNOR/CONSIGNEE
|_| NON-UCC FILING
------------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b) FILED WITH: CALIFORNIA
--------------------------------------------------------------------------------------------------------------------------------
1a. ENTITY'S NAME
TAG MEX, INC.
OR --------------------------------------------------------------------------------------------------------------------------------
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
------------------------------------------------------------------------------------------------------------------------------------
1c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx Xxx Xxxxxxx XX 00000
------------------------------------------------------------------------------------------------------------------------------------
1d. S.S OR TAX I.D.# OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY'S STATE 1g. ENTITY'S ORGANIZATIONAL I.D.# if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION |_| NONE
------------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
--------------------------------------------------------------------------------------------------------------------------------
2a. ENTITY'S NAME
CHAZZZ
OR --------------------------------------------------------------------------------------------------------------------------------
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
------------------------------------------------------------------------------------------------------------------------------------
2c. MAILING ADDRESS CITY STATE COUNTRY POSTAL CODE
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx Xxx Xxxxxxx XX 00000
------------------------------------------------------------------------------------------------------------------------------------
2d. S.S OR TAX I.D.# OPTIONAL 2e. TYPE OF ENTITY 2f. ENTITY'S STATE 2g. ENTITY'S ORGANIZATIONAL I.D.# if any
ADD'NL INFO RE OR COUNTRY OF
ENTITY DEBTOR ORGANIZATION |_| NONE
------------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY'S (ORIGINAL S/P OR ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME - insert only one secured party name (3a or 3b)
--------------------------------------------------------------------------------------------------------------------------------
3a. ENTITY'S NAME
FINOVA CAPITAL CORPORATION
OR --------------------------------------------------------------------------------------------------------------------------------
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
------------------------------------------------------------------------------------------------------------------------------------
3c. MAILING XXXXXXX XXXX XXXXX XXXXXXX XXXXXX XXXX
X.X. Xxx 0000, Attn: Law Department Xxxxxxx XX 00000-0000
------------------------------------------------------------------------------------------------------------------------------------
4. This FINANCING STATEMENT covers the following types or items of property:
Debtor hereby grants Secured Party a security interest in all of the following, whether now owned or hereafter acquired, and
wherever located, as collateral for the payment and performance of all present and future indebtedness, liabilities, guarantees
and obligations of Debtor and Secured Party: All present and future accounts and contrast rights and in any case, where an account
or contract right has arisen from sale of goods, the interest of the Debtor in such goods; and all books and records pertaining to
foregoing and all equipment containing said records; and all trade styles, trademarks, patents, security deposits, tax refunds,
customer lists, insurance claims, chooses in action pertaining to the foregoing, and all products and proceeds of any of the
foregoing.
------------------------------------------------------------------------------------------------------------------------------------
5. CHECK BOX (if applicable)
|_| This FINANCING STATEMENT is signed by the Secured Party instead of the Debtor to perfect a security interest
|_| (a) in collateral already subject to a security interest in another jurisdiction when it was brought into this state,
or when the debtor's location was changed to this state, or (b) in accordance with other statutory provisions (additional
data may be required)
------------------------------------------------------------------------------------------------------------------------------------
6. REQUIRED SIGNATURE(S)
TAG MEX, INC.
/s/ [ILLEGIBLE] V.P.
--------------------------------------------------------------------------------
FINOVA CAPITAL CORPORATION
/s/ Xxxx X. [ILLEGIBLE] V.P. 5/25/99
------------------------------------------------------------------------------------------------------------------------------------
7. If filed in Florida (check one)
|_| Documentary stamp tax paid
|_| Documentary stamp tax not applicable
------------------------------------------------------------------------------------------------------------------------------------
8. |_| This FINANCING STATEMENT is to be filed (for record) (or recorded) in the REAL ESTATE RECORDS
Attach Addendum (if applicable)
------------------------------------------------------------------------------------------------------------------------------------
9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s).
(ADDITIONAL FEE)
(optional) |_| All Debtors |_| Debtor 1 |_| Debtor 2
------------------------------------------------------------------------------------------------------------------------------------
(1) FILING OFFICER COPY NATIONAL FINANCING STATEMENT (FORM UCC 1) (TRANS) (REV. 12/18/95) Prepared by Data File Services Inc. X.X.
Xxx 000
Xxx Xxxx, XX 00000-0000 Tel (000) 000-0000
SCHEDULE 5.5
EQUIPMENT AND INVENTORY LOCATIONS
5.5 Equipment & Inventory
Locations
Equipment Locations:
-------------------
Tarrant Mexico, X.Xx X.X. De C.V.
Lote 5,6,7 Y 15 Xxxxx X, Xxxxxxx 0
Xxxxxx Xxxxxxxxxx, Xxxxxx 0000
Xxxxxx, C.P. 72220
Tarrant Mexico, S. De X.X. De C.V.
Lote 1, A.B.C. Fracc. San Diego Xocoyucan
Municipio de Ixtacuix, Tlaxcala
Mexico, C.P. 90700
Famian
Ajal Pan, Xxxxxxx Xxxxxxxx, 13 Oriente 326
Tehuacan, Puebla
Inventory Locations:
-------------------
FARO
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Retail Fulfillment Services, Inc.
000 Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Fashion Resource, Inc.
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Bruni International
0000 Xxx Xxxxxxx xx Xxxxx Xxxx
Xxxxxx, XX 00000-0000
SCHEDULE 6.2
QUALIFICATIONS TO DO BUSINESS
NOT APPLICABLE
SCHEDULE 6.6 (a)
CORPORATE NAME
As disclosed in Articles of Incorporation and By-Laws
SCHEDULE 6.6 (b)
ACQUISITIONS
Tarrant Apparel Group
Acquisitions
Project Amount
------- ------
Xxxxx Textile Mill $22,000,000 Cash + 1,724,000 Shares
Rocky Apparel $7,400,000 Cash + 81,000 Shares
Famian $12,000,000
CMG/Chazzz, Inc. $7,275,000 Cash + $1,500,000 if target met
Xxxxxxxx Xxxxxx, Inc. $6,000,000
SCHEDULE 6.8
PENDING LITIGATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
On October 2, 1999, summons were issued by the Hong Kong Special
Administrative Region Magistrate's Court to Tarrant Company Limited
("TCL"), a wholly owned Hong Kong subsidiary of the Company. The summons
allege that TCL exported apparel to the United States which it claimed was
of Hong Kong origin, using Hong Kong export licenses, when in fact the
goods were not of Hong Kong origin, in violation of Hong Kong's Import and
Export Ordinance. An initial hearing on this matter is scheduled for
December 28, 1999. TCL believes that any violations of Hong Kong law
resulted from actions of its non-related suppliers. Depending on the final
outcome of this legal proceeding, TCL's exports to the United States may
become subject to significantly increased Customs Service scrutiny, which
could cause delays in the entry of goods into the United States, or in a
worst case scenario, prohibit the entry of such goods into the United
States. TCL believes it has strong defenses to these charges, and will
vigorously defend itself against them. The Company is confident that the
policies and procedures are in place to provide maximum assurances that
our suppliers are in strict compliance with all international trade
regulations.
In September 1999, the Company was served with a complaint in an action
brought in the Supreme Court of the State of New York, New York County, by
DLLC and Direct Corp. LLC ("Direct"), as plaintiffs. The complaint alleges
that the Company and DLLC entered into a joint venture for the purpose of
producing and selling apparel products.
The complaint further alleges that the Company breached its obligations
under the joint venture. The complaint seeks monetary damages of
$50,000,000, plus interest, and further seeks permanent injunctive relief.
The Company has submitted its Answer to the Complaint which generally
denies the principal allegations therein, denies any liability to
plaintiffs and alleges a number of affirmative defenses to the claims made
by plaintiffs. No discovery has taken place in the action to date.
The Company believes that it has valid defenses to the claims set forth in
the plaintiff's complaint and intends to vigorously defend against said
claims.
A subsidiary of the Company has commenced a separate action against
plaintiffs in the Superior Court of the State of California, Los Angeles
County, seeking damages of $623,138.90 for goods sold and delivered to
plaintiffs.
Item 2. Change in Securities. None.
--------------------
Item 3. Default Upon Senior Securities. None.
------------------------------
Item 4. Submission of Matters to a Vote of Security Holders. None.
---------------------------------------------------
18
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
---------------------------------
DLLC and DIRECT CORP. LLC, Index No. 99/603439
Date Purchased: 7/19/99
Plaintiffs.
-against- COMPLAINT
---------
TARRANT APPAREL GROUP,
Defendant.
---------------------------------
Plaintiffs DLLC ("DLLC") and Direct Corp. LLC a/k/a Direct Sourcing LLC
("Direct"), by their attorneys Coudert Brothers, as and for their complaint
against defendant Tarrant Apparel Group ("TAG"), allege as follows.
Parties
-------
1. Plaintiff DLLC is a limited liability company duly organized and
existing under the laws of the State of New Jersey. DLLC maintains its principal
place of business at 0000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx.
2. Plaintiff Direct is a limited liability company duly organized and
existing under the laws of the State of Delaware. Direct maintains its principal
place of business at 0000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx.
3. Upon information and belief, defendant Tarrant Apparel Group is a
corporation organized and existing under the laws of the State of California.
TAG maintains its principal place of business at 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx.
Factual Background
------------------
4. Plaintiff DLLC is engaged, among other things, in the business of
sourcing apparel items for sale to wholesale companies and retail outlets
throughout the United States.
5. Defendant TAG is engaged in the business of fabric production,
manufacturing and/or sourcing of apparel items for sale to wholesale companies
and retail outlets.
The TAG/DLLC Partnership
------------------------
6. In or about March 1999, TAG contracted DLLC to induce DLLC to enter
into a joint venture for the purpose of producing and selling women's, men's and
children's clothing. TAG became aware that DLLC had very desirable customer
relationships. TAG wanted to supply DLLC customers with TAG-manufactured and
sourced goods to increase its customer base, volume, and ultimately its stock
price.
7. At the time TAG approached DLLC, DLLC had already been dealing with a
Mexican clothing manufacturer regarding a similar joint venture. Xxxxxx Xxxx,
the Chief Executive Officer of TAG, learned of DLLC's relationship with the
Mexican company and contacted Xxxxxxx Xxxxx, a member of DLLC, while Dayan was
in Mexico for meetings with the Mexican company.
8. Guez called DLLC's offices several times trying to contact Dayan before
DLLC finalized its deal in Mexico. Finally, Guez contacted Dayan and repeatedly
urged him to forego the partnership with the Mexican company and to meet with
TAG in Mexico to discuss the formation of a joint venture between DLLC and TAG.
2
9. DLLC agreed to and did meet with TAG at Guez's residence in Mexico. TAG
brought DLLC for a tour of TAG's new facility in Mexico to impress DLLC with its
production capabilities. TAG assured DLLC that its status as a public company
and its production facilities would serve as a great benefit to DLLC in the
joint venture. TAG also promised that all of the customers recruited by DLLC
would be for the benefit of the joint venture.
10. TAG said that it would accept the terms of the joint venture that DLLC
had already negotiated with the Mexican company, wherein TAG and DLLC would each
have a one-half interest in the joint venture. Finally, as an incentive to the
deal, TAG promised to sell 5% of TAG's shares to DLLC at a 40% discount.
11. Approximately one month after TAG made its initial contact with DLLC
in Mexico, in or about April 1999, TAG came to New York to meet with DLLC for
the purpose of finalizing the joint venture. TAG informed DLLC that for internal
reasons, the incentive offered would have to be changed.
12. The essential business terms were reduced to writing and signed by
Guez and provided that in addition to the one-half interest in the joint
venture, DLLC would be given 150,000 shares of TAG stock outright based upon
attaining certain minimum sales volumes (together with the right to borrow
against those shares) and an additional option to purchase 100,000 share lots of
TAG stock at 10% below market price.
13. DLLC accepted TAG's offer to participate in the joint venture (the
"Joint
3
Venture Agreement"). Despite the fact that formal documentation had not yet been
executed, at the time of the meetings in New York, both parties understood that
a partnership had been formed by virtue of the Joint Venture Agreement.
14. Dayan and Guez shook hands and DLLC immediately gave its orders over
to TAG to commence production.
15. Shortly thereafter, Xxxxxx Xxxx of TAG visited Xxxxxxx Xxxxx at
Dayan's home and confirmed again to Dayan that they "had a deal".
16. Guez asked Dayan to visit TAG's offices in Los Angeles to see the
facilities and urged DLLC to proceed with full speed to solicit orders so the
joint venture would not lose out on any business opportunities while the written
joint venture documentation was prepared.
17. Upon information and belief, TAG did not intend to fulfill its
obligations under the Joint Venture Agreement.
DLLC Performs Under the Agreement
---------------------------------
18. At this point, TAG gave to DLLC blueprints to TAG's production
facilities for the express purpose of showing them to DLLC customers to begin
obtaining orders for the joint venture.
19. In reliance upon its Joint Venture Agreement with TAG, DLLC formed
Direct, a Delaware LLC, as the joint venture vehicle for their partnership for
the purpose of acquiring and selling men's women's and children's apparel to
wholesale and retail customers.
20. Defendant TAG encouraged and induced DLLC to develop a customer base
for
4
the joint venture and to send orders to TAG to manufacture goods behalf of
Director.
21. In reliance on the Joint Venture Agreement with defendant and TAG's
assurance of its shared goals with DLLC, DLLC performed work for Direct,
including but not limited to obtaining customer orders and challenges.(1) In
addition, TAG urged DLLC to leverage its respected reputation and relationships
in the marketplace and to introduce many of DLLC's long--time customers to TAG.
Among the retailers that DLLC physically brought to Mexico to survey TAG's
facilities were: Xxxxxx'x Outpost, ShopKo, and JC Penney.
22. Also at the request of TAG, and in furtherance of the Joint Venture
Agreement, DLLC began contacting many customers and introducing them to the
joint venture, Direct. Such customers as K Mart, Mervyn's California, Kohl's,
Clothestime, The Buckle, Le Chateau, JC Penney, Sears Canada, Xxxxxxxxxx Xxxx,
Millers's Outpost, Kraft Foods, ShopKo and Charming Shops were visited and asked
to provide orders or challenges to the joint venture. these customers were shown
the blueprints of the TAG Mexican manufacturing facility, impressed with
production and distribution capabilities, and otherwise solicited for the joint
venture by DLLC.
23. As a direct result of DLLC's efforts on behalf of the joint venture,
orders and challenges began being sent to TAG for the production of garments on
behalf of the joint
----------
(1) In the fashion industry, a "challenge" is a devise whereby a buyer
provides a manufacturer with confidential product information and invites the
manufacturer to try to meet specific product requirements (e.g. price,
delivery), If these requirements are met by the manufacturer, the buyer
generally places on order with the manufacturer.
5
venture
TAG Breaches The Joint Venture Agreement and Misappropriate Plaintiff's Business
--------------------------------------------------------------------------------
24. After these initial efforts, Xxxxxxx Xxxxx of DLLC traveled to
California to complete the formalities in connection with the partnership.
25. When Xx. Xxxxx arrived at TAG's offices in California, TAG appeared
committed to its original agreement with DLLC. However, during the course of the
meetings, TAG suddenly remerged on its commitment to DLLC and tried to changed
the Joint Venture Agreement with DLLC.
26. DLLC refused to allow TAG to change the deal already reached between
the parties in New York. In reliance on the Joint Venture Agreement, DLLC had
acquired large numbers of customer orders for the partnership which had already
been passed on to TAG DLLC had already expended a significant amount of money
and effort in furtherance of the joint venture.
27. In particular, Guez explained that TAG had various internal reasons
for needing to amend the deal already struck and provided to Xx. Xxxxx three
"modifications" to the deal for DLLC to consider. These options were given to
DLLC in writing.
28. Convinced by Guez, and having expended much time and money to further
the joint venture, DLLC ultimately agreed to modify the original deal to provide
that DLLC would receive an opinion to purchase 150,000 shares in TAG
$4,000,000.00 in cash and a 3% royalty on sales.
6
29. Upon information and belief, the reasons given by TAG and Guez for
amending the terms of the deal were untrue and given only to induce DLLC to
continue to make customer introductions and to continue to obtain orders and
challenges. TAG had no intention of satisfying its obligations to DLLC and/or
Direct under the Joint Venture Agreement. TAG made these mispresentations to
misappropriate DLLC's and Direct's customer relationships and business.
30. After the agreement to modify the Joint Venture Agreement was reached,
TAG began discouraging DLLC from pursuing business of behalf of Direct by
qouting DLLC inflated prices far in excess of what had been agreed to in
writing, by giving them misinformation and/or withholding information about
production, and being generally uncooperative. TAG began to fail to fulfill
certain orders and did not pay Direct for its services rendered as agreed. TAG
also delivered incorrect samples after long delays and billed Direct at prices
substantially above those quoted by TAG.
31. At around this time, TAG kept suggesting changes to drafts of the
formal documentation for the joint venture, thereby delaying the execution of
the documents.
TAG Agrees Not To Contact DLLC's Customer Directly
--------------------------------------------------
32. At around the same time, and although TAG contributed nothing to the
endeavor of locating customers for Direct, TAG insisted upon seeing customer
information.
33. Before providing the customer information relating to Kmart to TAG and
to protect its interests in maintaining the primary relationship with Kmart, a
long-time customer of DLLC. DLLC insisted that TAG sign an agreement preventing
TAG from approaching Kmart
7
directly until the formal joint venture documentation was finalized. TAG agreed
and signed.
34. Despite the Joint Venture Agreement, TAG began marking direct contact
with various customers of the joint venture and began dealing directly with them
rather than through DLLC and/or Direct.
35. TAG's direct dealing with these customers effectively pushed DLLC and
Direct out of the transaction and nullified the purpose of the joint venture. As
a result, DLLC and Direct suffered significant financial damage as well as
DLLC's reputation in the industry. DLLC also lost the benefit of its bargain
with TAG, including its grants and purchase options of TAG shares as agreed.
36. Plaintiffs expended substantial effort and money to create a customer
base for Direct. TAG never contributed to this effort or reimbursed plaintiffs
for their work. Due to plaintiffs' efforts, numerous customer orders and
sourcing programs were obtained for Direct, only to be misappropriated by TAG.
37. TAG's breach of the Joint Venture Agreement, failure to reimburse DLLC
for the work it performed on behalf of Direct, and its misappropriation of
plaintiffs' customers, caused plaintiffs substantial losses.
First Cause of Action
---------------------
(Breach of Contract)
38. Plaintiffs repeat and reallege each and every allegation contained in
paragraph 1 through 37 above with the same force and effect as if fully set
forth herein.
39. DLLC and defendant agreed to form a joint venture for the purpose of
producing
8
and selling women's, men's and children's clothing.
40. Defendant failed to satisfy its obligations to Direct and DLLC
pursuant to the Joint Venture Agreement with DLLC by excluding plaintiffs from
the business of joint venture, quoting plaintiffs inflated prices, giving
plaintiffs misinformation about production, delivering incorrect samples after
long delays and misappropriating the business opportunities of the joint venture
to itself.
41. Accordingly, defendant has materially breached the terms and
conditions of the Joint Venture Agreement between the parties.
42. In aid of a determination of the legal damages suffered by plaintiffs,
plaintiffs demand that TAG be ordered to account for the business and profits
it misappropriated from the plaintiffs and the joint venture.
43. As a result of defendant's wrongful breach of its duties and
obligations under its agreement with plaintiffs, plaintiffs have been injured in
an amount to be determined at trial, but not less than $50,000,000.00, plus
interest.
Second Cause of Action
----------------------
(Breach of Fiduciary Duty)
44. Plaintiff's repeat and realleges each and every allegation contained
in paragraphs 1 through 43 with the same force and effect as if fully set forth
herein.
45. As a result entering into the Joint Venture Agreement for the purpose
of producing and selling womens's, men's and children's clothing, a confidential
and fiduciary relationship arose between TAG and plaintiffs.
9
46. By virtue of the confidential and fiduciary relationship between TAG
and plaintiffs, TAG owes plaintiffs obligation of utmost good faith, integrity
and fair dealing in connection with the affairs of the joint venture.
47. By excluding plaintiffs from the business of the joint venture,
quoting plaintiffs inflated prices, giving plaintiffs misinformation about
production, delivering incorrect samples after long delays and misappopriating
the business opportunities of the joint venture to itself, TAG has breached its
fiduciary duty to plaintiffs.
48. As a result of TAG's breach of its fiduciary duty to plaintiffs,
plaintiffs have been damaged in an amount to be determined at trial, but not
less than $50,000,000.00, plus interest.
49. The acts constituting TAG's breach of its fiduciary duty to
plaintiffs, were willful, oppressive and fraudulent. Accordingly, TAG is liable
to plaintiffs for exemplary and punitive damages in an amount not less than
$100,000,000.00.
Third Cause of Action
---------------------
(Tortious Interference with Business Relations)
50. Plaintiffs repeat and reallege each and every allegation contained in
paragraphs 1 through 49 with the same force and effect as if fully set forth
herein.
51. Plaintiffs enjoyed a profitable economic relationship with their
customers.
52. Defendant interfered with the existing and prospective relations of
plaintiffs and with its customers, including but not limited to, JC Penney,
Kmart, ShopKo and Xxxxxx'x Outpost,
10
by excluding plaintiffs from business conducted with plaintiffs' customers.
53. Defendant knew of the existing and prospective relationship between
plaintiffs and their customers, and that plaintiffs were relying on these
relationships in their business. Nonetheless, defendant intentionally interfered
with said business relationships.
54. Defendant's actions were intended to disrupt the relationship between
plaintiffs and its customers and were done with conscious disregard of the
strong probability that its actions would disrupt the existing and prospective
business relationships between plaintiffs and these customers.
55. As a result of the acts alleged herein, the existing and prospective
business relationships between plaintiffs and their customers were and will
continue to be seriously disrupted, causing plaintiffs damage to their business
and business reputation is an amount to be determined at trial, but not less
than $50,000,000.00, plus interest.
56. In addition, TAG, by reason of its willful and egregious behaviour, is
liable to plaintiffs for exemplary and punitive damages in an amount not less
than $100,000,000.00.
Fourth Cause of Action
----------------------
(Fraud)
57. Plaintiffs repeat and reallege each and every allegation contained in
paragraph 1 through 56 above with the same force and effect as if fully set
forth herein.
58. Defendant TAG, through its statements and acts as described above in
this Complaint, made false representations regarding its intention and ability
to perform under the Joint Venture Agreement with DLLC and failed to state
material facts necessary to make the
11
representations made, in light of the circumstances under which they were made,
not misleading.
59. At the time of these representations and omissions, defendant TAG
knew the representations and acts were false and misleading or made them
recklessly without regard to their truth or falsity.
60. Specifically, TAG never had any intention of performing its
obligations under the Joint Venture Agreement, and only made the
misrepresentations of its intentions to induced plaintiffs to make introductions
and to obtain orders, so that TAG could then refuse to abide by the Joint
Venture Agreement and misappropriate plaintiffs' customer relationships for its
own uses.
61. Defendant TAG made the representations with the intent to deceive and
defraud plaintiffs and to induce plaintiffs to rely thereon, and, among other
things, to cause plaintiffs to make customer introductions and to obtain
customer orders based upon the representations.
62. Plaintiffs were ignorant of the falsity or material omissions of the
representations and acts and believed them to be true, and could not reasonably
have ascertained their falsity.
63. Plaintiffs reasonably relied on defendant's representations to their
damage and detriment.
64. As a result of defendant's fraudulent and culpable conduct, plaintiffs
have been damaged in an amount to be determined at trial, but not less than
$50,000,000.00, plus interest.
65. In addition, TAG, by reason of its willful, fraudulent and culpable
behavior, is liable to plaintiffs for exemplary and punitive damages in an
amount not less than
12
$100,000,000.00.
Fifth Cause of Action
---------------------
(Preliminary and Permanent Injunction)
66. Plaintiffs repeat and reallege each and every allegation contained in
paragraph 1 through 65 above with the same force and effect as if fully set
forth herein.
67. Defendant's actions and conduct, as set forth above, constitute breach
of contract, tortious interference with business relations and common law fraud.
Furthermore, TAG has no right to continue to use the misappropriated customer
relationships for its own benefit.
68. The continuance of defendant's relationship with plaintiffs'
customers, including but not limited to, JC Penney, Kmart, ShopKo and Xxxxxx'x
Outpost will cause irrepertable and immeasurable injury to plaintiffs and to
their business.
69. Plaintiffs have no adequate remedy at law.
70. Accordingly, Plaintiffs are entitled to a preliminary and a permanent
injunction (i) restraining defendant TAG during the pendency of this action from
contacting or doing business with plaintiff's customers; and (ii) restraining
defendant from making any future attempts to contact and conduct business with
plaintiff's customers.
13
CONCLUSION
----------
WHEREFORE, Plaintiffs pray for relief as follows:
(1) On the First Cause of Action, for judgment against defendant TAG in
an amount to be determined at trial, but not less than $50,000,000.00, plus
interest; and
(2) On the Second Cause of Action, for judgment against defendant TAG in
an amount to be determined at trial, but not less than $50,000,000.00, plus
interest; and punitive damages in an amount not less than $100,000,000.00; and
(3) On the Third Cause of Action, for judgment against defendant TAG, in
an amount to be determined at trial, but not less than $50,000,000.00, plus
interest, and punitive damages in an amount not less than $100,000,000.00; and
(4) On the Fourth Cause of Action, for judgment against defendant TAG, in
an amount to be determined at trial, but not less than $50,000,000.00, plus
interest; and punitive damages in an amount not less than $100,000,000.00; and
(5) On the Fifth Cause of Action, for a preliminary and a permanent
injunction (i) restraining defendant during the pendency of this action from
contacting or doing business with plaintiffs' customers; and (ii) restraining
defendant from making any future attempts to contact and conduct business with
plaintiffs' customers; and
(6) For such other and further relief as the Court deems proper.
14
Dated: September 27, 0000
Xxx Xxxx, Xxx Xxxx
Yours, etc.,
COUDERT BROTHERS
By: /s/ Xxxxxxx X. Xx Xxxxx
---------------------------------
Xxxxxxx X. Xx Xxxxx
Xxxxx X. Xxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
TO: Xxxxxxxx Xxxx, Esq. Attorneys for Plaintiffs
Xxxxxxxx, Hertan & Ives DLLC and Direct Corp. LLC
000 Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Attorneys for Defendant
Tarrant Apparel Group
15
XXXXXXX X. XXXXX, CAL. BAR NO. 110430
SHEPPARD, MULLIN, XXXXXXX & HAMPTON LLP
A Limited Liability Partnership
Including Professional Corporations
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone (000) 000-0000
Attorneys for Plaintiff
TAG MEX, Inc.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT
TAG MEX, INC., a California corporation ) Case No.
)
Plaintiff, ) COMPLAINT FOR:
)
v. ) 1) BREACH OF CONTRACT
)
DIRECT CORP., a corporation; DLLC, ) 2) GOODS SOLD AND DELIVERED;
)
a corporation; and Does 1-50, inclusive ) 3) OPEN BOOK ACCOUNT.
)
Defendants )
--------------------------------------
Plaintiff Tag Mex, Inc., for its causes of action against defendants
Direct Corp,. DLLC, and Does 1 through 50, alleges as follows:
-1-
--------------------------------------------------------------------------------
COMPLAINT FOR BREACH OF CONTRACT:
GOODS SOLD AND DELIVERED; AND OPEN
BOOK ACCOUNT.
FIRST CAUSE OF ACTION
---------------------
(For Breach Of Contract Against All Defendants)
1. Plaintiff Tag Mex, Inc. ("TAG") is, and at all times herein
mentioned was, a distributor and reseller of clothing, authorized to conduct and
conducting business in the County of Los Angeles, State of California.
2. Defendant Direct Corp. is, and at all times herein mentioned was,
on information and belief, the alter ego of defendant DLLC, conducting business
in the County of Los Angeles, State of California.
3. Defendant DLLC is, and at all time herein mentioned was, on
information and belief, authorized to conduct and conducting business in the
County of Los Angeles, State of California.
4. TAG is unaware of the true names and capacities of defendants
sued herein as DOES 1 through 50, inclusive, and therefore sues those defendants
by such fictitious names. TAG will amend this complaint to allege their true
names and capacities when ascertained. TAG is informed and believes, and on that
basis alleges, that each of the fictitiously named defendants is indebted to TAG
as hereinafter alleged, and that TAG's rights against such fictitiously named
defendants arise from such indebtedness.
5. TAG is informed and believes, and on that basis alleges, that at
all times herein concerned the defendants, and each of them, were the agents,
employees, co-partners, joint venturers, and/or alter egos of each of their
co-defendants and that each of them was
-2-
--------------------------------------------------------------------------------
COMPLAINT FOR BREACH OF CONTRACT:
GOODS SOLD AND DELIVERED; AND OPEN
BOOK ACCOUNT
acting within the course and scope of such capacities with the knowledge and
consent of their co-defendants.
6. TAG is informed and believes and based upon such information and
belief alleges that defendants Direct Corp. and Does 1 through 10 are each, and
at all times herein mentioned were each, mere shells, instrumentalities, and
conduits through which defendants DLLC and Does 11 through 50 conducted their
businesses, exercising such complete dominance and control over defendants
Direct Corp. and Does 1 through 10 that any individuality or separateness of
defendants Direct Corp. and Does 1 through 10, on the one hand, and defendants
DLLC and Does 11 through 50, on the other hand, does not and at all times herein
mentioned did not exist.
7. Plaintiff is informed and believes and based upon such
information and belief alleges that adherence to the fiction of the separate
existence between defendants Direct Corp. and Does 1 through 10, on the one
hand, and defendants DLLC and Does 11 through 50, on the other hand, and each of
them, would sanction fraud and promote unfairness in that defendants DLLC and
Does 11 through 50 have each personally committed the acts alleged herein to the
detriment and damage of plaintiff TAG while attempting to shield themselves from
personal liability by the use of corporate fictions which on information and
belief hold insufficient assets to compensate TAG for the damages so caused.
8. In or about April, 1999, TAG and defendants entered into an
agreement whereby TAG agreed to sell, and defendants agreed to purchase, certain
finished garments at prices agreed upon between the parties. TAG and defendants
agreed that TAG would furnish such garments to defendants upon their order and
request. The agreement was
-3-
--------------------------------------------------------------------------------
COMPLAINT FOR BREACH OF CONTRACT:
GOODS SOLD AND DELIVERED; AND OPEN
BOOK ACCOUNT
confirmed by five subsequent purchase invoices and other written memoranda. The
cumulative invoice price for the goods was $623,138.90. Copies of the purchase
invoices are attached hereto at Exhibit A.
9. TAG has performed all conditions, covenants and promises required
on its part to be performed under the agreement.
10. Defendants have breached the agreement by retaining the goods
and by failing to pay TAG for the delivered goods, despite TAG's demands for
payment.
11. TAG has been damaged as a result of defendants' breach in the
amount of $623,138.90 plus interest, costs and fees.
SECOND CAUSE OF ACTION
----------------------
[Goods Sold And Delivered Against All Defendants]
12. TAG realleges and incorporates herein by reference paragraphs 1
through 11 of this Complaint.
13. Within the last six months, TAG invoiced defendants for various
goods supplied in the amount of $623,138.90, as reflected in Exhibit A. The
goods were sold and delivered to defendants, at defendants' request, and
defendants agreed to pay for the goods.
14. Neither the whole nor any part of the above sum has been paid,
although demand therefor has been made, and there is now due, owing, and unpaid
from defendants to TAG the sum of $623,138.90, together with interest, costs and
fees.
-4-
--------------------------------------------------------------------------------
COMPLAINT FOR BREACH OF CONTRACT:
GOODS SOLD AND DELIVERED; AND OPEN
BOOK ACCOUNT
THIRD CAUSE OF ACTION
---------------------
[Open Book Account Against All Defendants]
15. TAG realleges and incorporates herein by reference paragraphs 1
through 14 of this Complaint.
16. Within the last six months, defendants became indebted to TAG
for goods sold and delivered by TAG to defendants, for which defendants agreed
to pay TAG the sum of $623,138.90.
17. Neither the whole nor any part of the above sum has been paid,
although demand therefor has been made, and there is now due, owning, and unpaid
from defendants to TAG the sum of $623,138.90, together with interest, costs and
fees.
-5-
--------------------------------------------------------------------------------
COMPLAINT FOR BREACH OF CONTRACT:
GOODS SOLD AND DELIVERED; AND OPEN
BOOK ACCOUNT
PRAYER
------
WHEREFORE, Plaintiff TAG prays for judgment against defendants as
follows:
1. For damages in the amount of $623,138.90;
2. For prejudgment interest thereon as provided by law;
3. For costs of suit incurred;
4. For reasonable attorneys' fees;
5. For such other and further relief as this Court may deem just and
proper.
Dated: November 5, 1999
SHEPPARD, MULLIN, XXXXXXX & HAMPTION LLP
XXXXXXX X. XXXXX
By
-------------------------------------------
XXXXXXX X. XXXXX
Attorneys for Plaintiff
TAG MEX, INC.
-6-
--------------------------------------------------------------------------------
COMPLAINT FOR BREACH OF CONTRACT:
GOODS SOLD AND DELIVERED; AND OPEN
BOOK ACCOUNT
SCHEDULE 6.9 (a)
TRADEMARKS
ASSIGNMENT OF TRADEMARKS AND THE
UNITED STATES REGISTRATION THEREOF
This assignment is made by and between Tarrant Company Limited, a
Hong Kong corporation, organized and existing under the laws of Hong Kong,
having a principal place of business at 13/F Lladro Center, 00 Xxx Xxxx Xxxx,
Xxxx Xxxx, Xxxxxxx, Xxxx Xxxx (hereinafter "Assignor") and Tarrant Apparel
Group, doing business as Fashion Resource, a California corporation, having its
principal place of business at 0000 X. Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (hereinafter "Assignee").
WHEREAS, Assignor adopted and uses, and thereby, owns all rights,
title and interest in and to the trademarks and United States Registrations
thereof identified below (hereinafter the "Marks" and "Registrations",
respectively), along with the goodwill of the business appurtenant to said
Marks:
Trademark Registration No. Registration Date Class
--------- ---------------- ----------------- -----
NO! JEANS 1,462,893 October 27, 1987 25
NO! 1,461,979 October 20, 1987 25
WHEREAS, Assignee desires to obtain all right, title, and interest
in the Marks and the Registrations, including the goodwill associated with the
Marks and any and all claims, demands, and cause of action for infringement, of
the Marks, past, present, and future, and all of the proceeds from the
foregoing.
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt of which is hereby acknowledged, Assignor hereby assigns to Assignee
all right, title and interest in and to the Marks and the Registrations,
together with the goodwill of the business symbolized by the Marks and any and
all claims, demands, and causes of action for infringement, of the Marks, past,
present, and future, and all of the proceeds from the foregoing.
Signed at Los Angeles, California, this 24th day of June, 1998.
TARRANT COMPANY LIMITED
/s/ Xxxx Xxxxx
---------------------------
Xxxx Xxxxx
Chief Operating Officer
State of California }
ss:
County of LOS ANGELES }
On this 24th day of JUNE 1998, before me Xxxxxx X. Xxxxxxxxx, a
Notary Public, personally appeared Xxxx Xxxxx,
|_| personally known to me, or
|X| proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument
and acknowledged to me that she executed the same in her authorized capacity and
that by her signature on the instrument the entity upon behalf of which the
person acted, executed the instrument. WITNESS my hand and official seal.
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Notary Public
[SEAL] XXXXXX X. XXXXXXXX
Commission #1131492
Notary Public -- California
Los Angeles County
My Comm. Expires Mar 26, 2001
[LOGO] STATE OF CALIFORNIA
SECRETARY OF STATE
Trademark Reg. No. 102163 Class No. Int. 25
CERTIFICATE OF REGISTRATION OF TRADEMARK
I, XXXX XXXXX, Secretary of State of the State of California, hereby certify:
That in accordance with the application filed in this office the TRADEMARK
described below has been duly registered in this office on behalf of:
Name of Applicant: Tarrant Company, Ltd.
Business Address: 00X, Xxxxxx Xxxxxx, 00 Xxx Xxxx Road, Xxxx Xxxx
Kowloon, Hong Kong
Date first used in California: July 17, 1986
Date first used anywhere: July 17, 1986
Description of Trademark: NO! JEANS
Description of Goods on which the Trademark is used: Clothing
A copy, specimen, facsimile, counterpart or a reproduction of the xxxx is
attached
Date of Registration: January 24, 1997
Term of Registration Extends to and Includes: January 24, 2007
[SEAL] IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of the
State of California this 30th day of
January, 1997.
/s/ Xxxx Xxxxx
XXXX XXXXX
Secretary of State
We the People
[SEAL] Xx. 0000000
XXX XXXXXX XXXXXX OF AMERICA
CERTIFICATE OF REGISTRATION
This is to certify that the records of the Patent and Trademark Office
show that an application was filed in said Office for registration of the Xxxx
shown herein, a copy of said Xxxx and pertinent data from the Application being
annexed hereto and made a part hereof.
And there having been due compliance with the requirements of the law and
with the regulations prescribed by the Commissioner of Patents and Trademarks.
Upon examination, it appeared that the applicant was entitled to have and
Xxxx registered, under the Trademark Act of 1946, and the said Xxxx has been
duly registered this day in the Patent and Trademark Office on the
PRINCIPAL REGISTER
to the registrant named herein
This registration shall remain in force for Twenty years unless sooner
terminated as provided by law.
[SEAL] In Testimony Whereof I have hereunto set my
hand and caused the seal of the Patent and
Trademark Office to be affixed this twenty-
seventh day of October, 1987.
/s/ Xxxxxx X. [ILLEGIBLE]
Commissioner of Patents and Trademarks
Int. Cl.: 25
Prior U.S. Cl.: 39
Reg. No. 1,462,893
United States Patent and Trademark Office Registered Oct. 27, 1987
--------------------------------------------------------------------------------
TRADEMARK
PRINCIPAL REGISTER
NO! JEANS
TARRANT COMPANY, LTD. (HONG KONG CORPORATION)
13/F XXXX XXXX INC. XXXXXXXX 00 XXXX XXX XXXX
XXXXXXX, XXXX XXXX
FOR: MEN'S, WOMEN'S, BOYS' AND GIRLS' CLOTHING, NAMELY JEANS, SHORTS,
SWEAT PANTS, JUMPSUITS, SWEATERS, BLOUSES, TOPS, JACKETS, AND SKIRTS, IN CLASS
25 (U.S. CL. 39).
FIRST USE 7-17-1986; IN COMMERCE 7-17-1986.
NO CLAIM IS MADE TO THE EXCLUSIVE RIGHT TO USE "JEANS", APART FROM THE
XXXX AS SHOWN.
SER. NO. 616,442, FILED 8-25-1986.
XXXXXXX X. XXXXXX, EXAMINING ATTORNEY
[TRADEMARK]
We the People
[SEAL] Xx. 0000000
XXX XXXXXX XXXXXX OF AMERICA
CERTIFICATE OF REGISTRATION
This is to certify that the records of the Patent and Trademark Office
show that an application was filed in said Office for registration of the xxxx
shown herein, a copy of said Xxxx and pertinent data from the Application being
annexed hereto and made a part hereof.
And there having been due compliance with the requirements of the law and
with the regulations prescribed by the Commissioner of Patents and Trademarks.
Upon examination, it appeared that the applicant was entitled to have and
Xxxx registered under the Trademark Act of 1946, and the said Xxxx has been
duly registered this day in the Patent and Trademark Office on the
PRINCIPAL REGISTER
to the registrant named herein
This registration shall remain in force for Twenty years unless sooner
terminated as provided by law.
[SEAL] In Testimony Whereof I have hereunto set my
hand and caused the seal of the Patent and
Trademark Office to be affixed this
twentieth day of October, 1987.
/s/ Xxxxxx X. [ILLEGIBLE]
Commissioner of Patents and Trademarks.
Int. Cl.: 25
Prior U.S. Cl.: 39
Reg. No. 1,461,979
United States Patent and Trademark Office Registered Oct. 20, 1987
TRADEMARK
PRINCIPAL REGISTER
NO!
TARRANT COMPANY, LTD. (HONG KONG CORPORATION)
13/F XXXX XXXX IND. XXXX.
00 XXXX XXX XXXX
XXXXXXX, XXXX XXXX
FOR: MEN'S WOMEN'S, BOYS' AND GIRLS' CLOTHING, NAMELY JEANS, SHORTS, SWEAT
PANTS, JUMPSUITS, SWEATERS, BLOUSES, TOPS, JACKETS AND SKIRTS, IN CLASS 25
(U.S. CL. 39).
FIRST USE 9-3-1985 IN COMMERCE 9-3-1985.
SER. NO. 616,427, FILED 8-25-1986.
XXXXXXX X. XXXXXX, EXAMINING ATTORNEY
[GRAPHIC OMITTED]
A COPY, SPECIMEN, FACSIMILE, COUNTERPART OR REPRODUCTION OF TRADEMARK REG.
NO.________________
WE ARE SURVIVORS, ADVENTURE SEEKERS
THAT DARE AND CHALLENGE.
THE CHALLENGE IS DARE TO SAY
YOURS "NO!"
NO! JEANS
CONTEMPORARY CLOTHING
Design by Xxxxxx Xxxxxx
FASHION EXPRESSIONS OF THE 80'S
QUALITY FABRICS STYLISH AND FUN
AND CONSTRUCTION CLOTHING FOR ALL
NO! [ILLEGIBLE]
NO! JEANS
[GRAPHIC OMITTED]
[LETTERHEAD OF MOFFAT & CO.]
June 11, 1999
Xx. Xxxx Xxxxx
Get
X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
Dear Xxxx:
Re: Trade-xxxx: GET!
Appln. No. 613,895
Applicant: Get
Our File: 575-103
--------------------------------------------------------------------------------
This is further to our letter date January 3, 1990 in respect of the above
application.
We are pleased to report that this application has issued to registration
and we are pleased to enclose the Certificate of Registration which issued on
May 11, 1990 under Registration No. 368,528. This registration will expire
unless it is renewed by May 11, 2005.
We have reviewed the Certificate of Registration and checked it for
accuracy. It appears to us that there are no errors in the Certificate of
Registration, however, I would ask that you double check to be certain that
there are no errors or omissions.
The Trade-marks Office is required to send a Notice of Renewal to the
registered owner of the trade-xxxx within four months of the renewal date. At
that time, if you wish to have this trade-xxxx registration renewed, we would be
pleased to take the necessary steps upon receipt of your instructions.
Yours very truly,
/s/ MOFFAT & CO.
MOFFAT & CO.
Per: /s/ [ILLEGIBLE]
PBK/jmg
Encls.
State of California
OFFICE OF THE SECRETARY OF STATE
Trademark
Reg. No. 82594
CERTIFICATE OF REGISTRATION OF TRADEMARK
I, MARCH XXXX EU, Secretary of State of the State of California, hereby
certify:
That in accordance with the application filed in this office the TRADEMARK
described below had been duly registered in this office on behalf of:
Name of Applicant: Tarrant Company, Limited., a Hong Kong corporation
Business Address 13/F Xxxx Xxxx Ind. Xxxx.
00 Xxxx Xxx Xxxx, Xxxxxxx
Date First Used in California September 3, 1985
Date First Used Anywhere September 3, 1985
Description of Trademark the word "NO!"
Class No 39
Description of Goods on Which the Trademark is Used
men's, women's, boys' and girls' clothing; namely, jeans, shorts, sweat
pants, jumpsuits, sweaters, blouses, tops, jackets and skirts
A copy, specimen, facsimile, counterpart or a reproduction of the xxxx is
attached.
Date of Registration September 3, 1986
Term of Registration Extends to and Includes September 3, 1996
[SEAL] IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of the
State of California this
3rd day of September, 1986
/s/ March Xxxx Eu
March Xxxx Eu
Secretary of State
State of California
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF REGISTRATION OF TRADEMARK
I, MARCH XXXX EU, Secretary of State of the State of California, hereby
certify:
That in accordance with the application filed in this office the TRADEMARK
described below had been duly registered in this office on behalf of:
Name of Applicant: Tarrant Company, Limited., a Hong Kong corporation
Business Address 13/F Xxxx Xxxx Ind. Xxxx.
00 Xxxx Xxx Xxxx, Xxxxxxx
Date First Used in California September 3, 1985
Date First Used Anywhere September 3, 1985
Description of Trademark the word "NO!"
Class No 39
Description of Goods on Which the Trademark is Used
men's, women's, boys' and girls' clothing; namely jeans, shorts, sweat
pants, jumpsuits, sweaters, blouses, tops, jackets and skirts
A copy, specimen, facsimile, counterpart or a reproduction of the xxxx is
attached.
Date of Registration September 3, 1986
Term of Registration Extends to and Includes September 3, 1996
[SEAL] IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of the
State of California this
3rd day of September, 1986
/s/ March Xxxx Eu
March Xxxx Eu
Secretary of State
A COPY, SPECIMEN, FACSIMILE, COUNTERPART OR REPRODUCTION OF TRADEMARK REG.
NO.______________________
[GRAPHIC OMITTED]
[LOGO] NO!
[GRAPHIC OMITTED]
Consumer and Corporate Consommation
Affairs Canada et Corporations Canada
Trade-Marks Marques de commerce
Certificat
Certificate of Registration d'enregistrement
368528
I hereby certify that the trade-xxxx identified in the attached extract from the
register of trade-marks has been registered as appears therefrom, and that the
said extract is a true copy of the record of its registration.
In accordance with the provisions of the Trade-Marks Act, this trade-xxxx is
subject to renewal every 15 years from the registration date shown on the
attached extract.
In testimony whereof I have hereunto set my hand and caused the seal of the
Trade-Marks Office to be affixed at the city of Hull, Canada.
Je certifie par les persentes que la marque de commerce identifee dans
l'extrait ci-joint, tire du registre des marques de commerce, a ete enregistree
ainsi qu'il en xxxxxx, et que ledit extrait est une copie conforme de
l'inscription de son enregistrement.
Conformement aux dispositions de la Loi sur les marques de commerce, cette
marque de commerce, est renouvelable tous les quinze ans a compter de la date
d'enregistrement indiquee sur l'extrait ci-joint.
En foi de quoi j'ai appose aux presentes mon seing et fait apposer le sceau du
Burearu des marques de commerce, en la cite xx Xxxx, Canada.
[SEAL] May 11 199[ILLEGIBLE]
Date
/s/ [ILLEGIBLE]
Register of Trade-Marks
Le registraire des marques de commerce
/s/ [ILLEGIBLE]
Attesting Officer
[GRAPHIC OMITTED] Certificateur
Canada
APPL,N/DEM. NO 613 895 REGISTRATION/ENREGISTREMENT NO TMA 368,528
FILING DATE/DATE DE PRODUCTION: 25 AUG/AOUT 1988
REGISTRATION DATE/DATE D'ENREGISTREMENT: 11 MAY/MAI 1990
PRIORITY FILING DATE/ DATE DE PRIORITE DE PRODUCTION: 24 MAR/MARS 1988
REGISTRANT/PROPRIETAIRE ORIGINAL:
GET,
000 XXXX 0XX XXXXXX,
XXX XXXXXXX, XXXXXXXXXX, 00000,
Xxxxxx Xxxxxx of America
REP FOR SERVICE/REP POUR SIGNIFICATION:
MOFFAT & CO.,
00 XXXXXXXX XXXXXX,
X.X. XXX 0000, XXXXXXX X,
XXXXXX,
Xxxxxxx X0X 0X0
TRADEMARK/MARQUE DE COMMERCE:
GET!
WARES/MARCHANDISES:
(1) Clothing, namely shirts, tops, t-shirts, vest, jackets, coats, sweaters,
jeans, pants, shorts, swimwear, sleepwear, jumpsuits, skirts, dresses, shoes,
hoisery, belts and hats.
Used in United States of America on wares.
Registered in United States of America on 18 OCT/OCT 1998 under No. 1,509,348 in
respect of wares.
Declaration of use filed 05 FEB/FEV 1990 on wares.
[SEAL] Xx. 0000000
XXX XXXXXX XXXXXX OF AMERICA
CERTIFICATE OF REGISTRATION
This is to certify that the records of the Patent and Trademark Office
show that an application was filed in said Office for registration of the Xxxx
shown herein, a copy of said Xxxx and pertinent data from the Application being
annexed hereto and made a part hereof.
And there having been due compliance with the requirements of the law and
with the regulations prescribed by the Commissioner of Patents and Trademarks.
Upon examination, it appeared that the applicant was entitled to have and
Xxxx registered, under the Trademark Act of 1946, and the said Xxxx was been
duly registered this day in the Patent and Trademark Office on the
PRINCIPAL REGISTER
to the registrant named herein.
This registration shall remain in force for Twenty years unless sooner
terminated as provided by law.
[SEAL] In Testimony Whereof I have hereunto set my
hand and caused the seal of the Patent and
Trademark Office to be affixed this
eighteenth day of October, 1988.
/s/ Xxxxxx X. [ILLEGIBLE]
Commissioner of Patents and Trademarks
Int. Cl.: 25
Prior U.S. Cl.: 39
Reg. No. 1,509,348
United States Patent and Trademark Office Registered Oct. 18, 1988
TRADEMARK
PRINCIPAL REGISTER
GET!
GET (CALIFORNIA CORPORATION)
000 XXXX 0XX XXXXXX
XXX XXXXXXX, XX, 00000
FOR: CLOTHING, NAMELY SHIRTS, TOPS, T-SHIRTS, VESTS, JACKETS, COATS,
SWEATERS, JEANS, PANTS, SHORTS, SWIMWEAR, SLEEPWEAR, JUMPSUITS, SKIRTS, DRESSES,
SHOES, HOISERY, BELTS AND HATS, IN CLASS 25 (U.S. CL. 39).
FIRST USE 1-7-1988; IN COMMERCE 3-27-1988.
SER. NO. 718,393, FILED 3-24-1988.
XXXXX XXXXXXX, EXAMINING ATTORNEY
SCHEDULE 6.9(B)
TRADEMARK DISPUTES
NOT APPLICABLE
SCHEDULE 6.10
LICENSES/PERMITS
Registrant Number
25225
--------------
Effective Date
June 25, 1999
--------------
Expiration Date
June 24, 2000
--------------
[SEAL]
STATE OF CALIFORNIA DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LICENSING AND REGISTRATION
X.X. XXX 000000, XXX XXXXXXXXX, XX 00000
CERTIFICATE OF REGISTRATION
CALIFORNIA GARMENT MANUFACTURING INDUSTRY
Pursuant to Section 2675 of the California Labor Code, this Certificate of
Registration in the California Garment Manufacturing Industry is issued to:
(COR) W.C.I.
01/01/2000
This Certificate of Registration is valid only for one year and must be renewed
on or before the expiration date shown above.
TARRANT APPAREL GROUP This certificate shall not be transferred or assigned.
DBA: FASHION RESOURCE It is valid only for the addresses(es) shown.
0000 X. XXXXXXXXXX XXXX.
XXX XXXXXXX, XX 00000 STATE LABOR COMMISSIONER
STATE LABOR COMMISSIONER
/s/ Xxxx X. Xxxxxxxx
In addition to the above address, this Certificate of Registration also is valid
for the following address(es):
1. 000 X 0XX XXXXXX, #00000
XXX XXXXXXX, XX 00000
2. 0000 X. XXX XXXXXXX XXXXXX
XXX XXXXXXX, XX 00000
3. 0000 XXXXXXXXX XXXX.,
XXXXX XXXX, XX 00000
PLEASE POST IN A
CONSPICUOUS PLACES
0017242
--------------------------------------------------------------------------------
[SEAL OF STATE BOARD OF EQUALIZATION STATE OF CALIFORNIA]
CALIFORNIA STATE BOARD OF EQUALIZATION
SELLER'S PERMIT
ACCOUNT NUMBER
THIS PERMIT DOES NOT 10/1/1998 SR AA 18727134
AUTHORIZE THE HOLDER TO FASHION RESOURCE INC.
ENGAGE IN ANY BUSINESS 0000 X. XXXXXXXXXX XXXXXXXXX #0
CONTRARY TO LAWS REGULATING XXX XXXXXXX, XX 00000
THAT BUSINESS OR TO POSSESS
OR OPERATE ANY ILLEGAL IS HEREBY AUTHORIZED PURSUANT TO SALES AND
DEVICE. USE TAX LAW TO ENGAGE IN THE BUSINESS OF
SELLING TANGIBLE PERSONAL PROPERTY AT THE
ABOVE LOCATION
Not valid at any other address
THIS PERMIT IS VALID UNTIL REVOKED OR
CANCELLED BUT IS NOT TRANSFERABLE. IF YOU
SELL YOUR BUSINESS, OR DROP OUT OF A
PARTNERSHIP, NOTIFY US OR YOU COULD BE
RESPONSIBLE FOR SALES AND USE TAXES OWED BY
THE NEW OPERATOR OF THE BUSINESS.
BT-442-R-LZ REV. 10(6-92)
--------------------------------------------------------------------------------
DISPLAY CONSPICUOUSLY AT PLACE OF BUSINESS FOR WHICH ISSUED
NOTICE TO TAXPAYERS
INFORMATION FURNISHED TO THE BOARD OF EQUALIZTION
The information Practices Act of 1977 requires this agency to provide the
following notice to individual taxpayers who are asked by the State Board of
Equalization to supply information:
The principal purpose for which the requested information will be used is to
administer the California Sales and Use Tax Laws, Special (Excise) Tax Laws, or
the Timber Yield Tax Law. This includes the determination and collection of the
correct amount of tax.
As an individual taxpayer, you have the right of access to personal information
about you in records maintained by the State Board of Equalization. The official
responsible for maintaining Sales and Use Tax information is the Deputy
Director, Sales and Use Tax Department, 0000 X. Xxxxxx, Xxxxxxxxxx, XX, 00000;
please contact your local Board office listed in the white pages for assistance,
or telephone (000) 000-0000. The official responsible for maintaining Excise Tax
and Environmental Fee Tax information is the Deputy Director, Special Taxes and
Operations Department, 0000 X. Xxxxxx, Xxxxxxxxxx, XX 00000; telephone (916)
000-0000. The official responsible for maintaining Timber Tax information is the
Timber Tax Division Chief, Property Xxxxx Xxxxxxxxxx 0000-00xx Xxxxxx,
Xxxxxxxxxx, XX 00000, telephone (000) 000-0000. If the local Board office is
unable to provide the information sought, you may also contact the information
Security Office in Sacramento, telephone (000) 000-0000.
The California Revenue and Taxation Code, Parts 1, 1.5 and 1.6 (State Sales and
Use Tax), 2 (Motor Vehicle Fuel Tax), 3(Use Fuel Tax), 7 (Tax on Insurers),
13(Cigarette and Tobacco Products Tax), 14(Alcoholic Beverage Tax), 18.5(Timber
Yield Tax), 19(Energy Resources Surcharge), 20(Emergency Telephone Users
Surcharge), 22(Hazardous Substances Tax Law), 23(Solid Waste Disposal Site
Cleanup Maintenance Fee Law), 24(Oil Spill Responses, Prevention and
Administration Fees), 26(Underground Storage Tanks Maintenance Fee Law),
Government Code, Title 7.3, Chapter 6 (Tire Recycling Fee), Public Resources
Code, Div. 30, Part 7, Chapter 4(Oil Recycling Fee), Health and Safety Code,
Div. 1, Part 1, Chapter 2, Article 4.6 (Childhood Lead Poisoning Prevention
Fee), and Chapter 1 of the Public Utilities Code (Hazardous Spill Prevention
Fee) requires persons meeting certain requirements to file applications for
registration, applications for permits or licenses, and tax returns or reports
in such form as prescribed by the State Board of Equalization.
It is mandatory that you furnish all the required information requested by
applications for registration, applications for permit or licenses, tax returns
and other related date, except that the furnishing of social security numbers by
applicants for Consumer Use Tax Accounts, Certificates of Registration -- Use
Tax and Timber Yield Tax Accounts is voluntary. Failure to provide all the
required information requested by an application for a permit or license could
result in your not being issued a permit or license. In addition, the law
provides penalties for failure to file a return, failure to furnish specific
information required, failure to supply information required by law or
regulations, or for furnishing fraudulent information.
Pursuant to California law, the information appearing on the face of any permit
or license issued by the Board is a public record. Information you furnish to
this agency may also be given to federal, state and local government agencies as
authorized by law.
SCHEDULE 6.14
LABOR DISPUTES
NOT APPLICABLE
SCHEDULE 8.3
OUTSTANDING GUARANTEES
GUARANTY
1. The Guaranty. For valuable consideration, the undersigned ("Guarantor")
------------
hereby unconditionally guarantees and promises to pay to TRANSIT HOLDING, INC.,
a subsidiary of Banc of America Leasing & Capital LLC ("Lessor"), or order, on
demand, in lawful money of the United States, any and all payment and
performance obligations, whether now existing or hereafter arising or matured or
contingent (the "Obligations") of TAG MEX, INC. ("Lessee") to Lessor under or in
respect of that certain Lease intended as Security executed by Lessee and Lessor
dated August 23, 1999 (together with all schedules, appendices and other
attachments thereto, and any renewals, modifications, or extensions thereof, the
"Lease") providing for the lease or financing of equipment or other personal or
real property ("Leased Property") by Lessor to Lessee. The obligations of
Guarantor hereunder are independent of the Obligations and exclusive of and in
addition to liability under any other guaranty executed by Guarantor for the
benefit of Lessor or any company related to Lessor, and a separate action or
actions may be brought and prosecuted against Guarantor whether action is
brought against Lessee or whether Lessee is joined in any such action or
actions.
2. Authorization of Renewals, Etc. Guarantor authorizes Lessor, without
------------------------------
notice or demand and without affecting its liability hereunder, from time to
time to:
(a) renew, compromise, extend, accelerate, or otherwise change the
time for or amount of any payment, or substitute or exchange Leased Property, or
otherwise change the terms of the Lease or the Obligations or any other
obligations of Lessee to Lessor ("Other Obligations");
(b) receive and hold security for the payment of this Guaranty or
the Obligations or any Other Obligations, and exchange, enforce, waive, release,
fail to perfect, sell, or otherwise dispose of, any such security;
(c) apply such security and direct the order or manner of sale
thereof as Lessor in its discretion may determine; and
(d) release or substitute any one or more of any endorsers or
guarantors of the Obligations.
3. Waiver of Certain Rights. Guarantor waives any right to require Lessor
------------------------
to:
(a) proceed against Lessee;
(b) proceed against or exhaust any security for the Obligations or
any other Obligations, or repossess, dispossess or remarket Leased Property, or
otherwise mitigate damages; or
(c) exercise or pursue any other right or remedy in Lessor's power
whatsoever.
4. Waiver of Certain Defenses. Guarantor waives any defense arising by
--------------------------
reason of any disability or other defense of Lessee, or the cessation from any
cause whatsoever of the liability of Lessee, or any claim that Guarantor's
obligations exceed or are more burdensome than those of Lessee, including any of
the foregoing arising by virtue of any provision of the U.S. Bankruptcy Code
(Title 11, U.S. Code) (the "Bankruptcy Code").
5. Waiver of Subrogation and Other Rights and Defenses.
---------------------------------------------------
(a) Until the Obligations and any Other Obligations are paid in
full, Guarantor waives (i) any right of subrogation, reimbursement,
indemnification and contribution (contractual, statutory, or otherwise),
including any claim or right of subrogation under the Bankruptcy Code, arising
from the existence or performance of this Guaranty, (ii) any right to enforce
any remedy Lessor now has or may hereafter have against Lessee and (iii) any
benefit of, and any right to participate in, any security now or hereafter held
by Lessor. After the Obligations and any Other Obligations are paid in full, to
the extent there is any value in the security or other collateral securing the
Obligations or Other Obligations, Lessor agrees to execute and deliver such
further documents as Guarantor may reasonably request to vest title to such
security or other collateral in Guarantor.
(b) Guarantor understands and acknowledges that if Lessor
forecloses, either by judicial foreclosure or by exercise of power of sale, any
deed of trust securing the Obligations, that foreclosure could impair or destroy
any ability Guarantor may have to seek reimbursement, contribution, or
indemnification from Lessee or others based on any right Guarantor may have of
subrogation, reimbursement, contribution or indemnification for any amounts paid
by Guarantor under this Guaranty. Guarantor further understands and acknowledges
that in the absence of this paragraph, such potential impairment or destruction
of Guarantor's rights, if any, may entitle Guarantor to assert a defense to this
Guaranty based on Section 580d of the California Code of Civil Procedure ("CCP")
as interpreted in
1
Union Bank x. Xxxxxxx, 265 Cal. App. 2d. 40 (1968). By executing this Guaranty,
---------------------
Guarantor freely, irrevocably, and unconditionally: (i) waives and relinquishes
that defense and agrees that Guarantor will be fully liable under this Guaranty
even though Lessor may foreclose, either by judicial foreclosure or by exercise
of power of sale, any deed of trust securing the Obligations; (ii) agrees that
Guarantor will not assert that defense in any action or proceeding Lessor may
commence to enforce this Guaranty; (iii) acknowledges and agrees that the rights
and defenses waived by Guarantor in this Guaranty include any right or defense
Guarantor may have or be entitled to assert based upon or arising out of any one
or more of CCP ss.ss.580a, 580b, 580d, or 726 of Section 2848 of the California
Civil Code ("CC") and (iv) acknowledges and agrees that Lessor is relying on
this waiver in creating the Obligations, and that this waiver is a material part
of the consideration therefor.
(c) Guarantor waives any rights and defenses that are or may become
available to Guarantor under CC ss.ss.2787 to 2855, inclusive.
(d) Guarantor waives the benefit of any statute of limitations
affecting its liability hereunder.
6. Waiver of Presentments, Etc. Guarantor waives all presentments, demands
---------------------------
for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor, and notices of acceptance of this Guaranty and of the
existence, creation, or incurring of new or additional Obligations or any Other
Obligations.
7. Information Relating to Lessee. Guarantor acknowledges and agrees that
------------------------------
it has sole responsibility for obtaining from Lessee such information concerning
Lessee's financial condition or business operations or the Leased Property as
Guarantor may require, and that Lessor has no duty at any time to disclose to
Guarantor any information relating to the business operations or financial
condition of Lessee or the Leased Property.
8. Financial Information. Guarantor shall keep its books and records in
---------------------
accordance with generally accepted accounting principles and practices
consistently applied and shall deliver to Lessor (i) annual CPA audited
financial statements within 120 days of its fiscal year end, (ii) quarterly
company-prepared financial statements upon Lessor's request, and (iii) such
financial statements as Lessor may reasonably request. Credit information
relating to Guarantor may be disseminated among Lessor and any of its affiliates
and any of their respective successors and assigns.
9. Security. To secure all of Guarantor's obligations hereunder, Guarantor
--------
assigns and grants to Lessor a security interest in all moneys, securities and
other property of Guarantor now or hereafter in the possession of Lessor, all
deposit accounts of Guarantor maintained with Lessor or any affiliate of Lessor
(including Bank of America National Trust and Savings Association), and all
proceeds thereof. Upon default or breach of any of Guarantor's obligations to
Lessor hereunder, Lessor may apply any such deposit account to reduce the
Obligations, and may foreclose any collateral as provided in the Uniform
Commercial Code and in any security agreements between Lessor and Guarantor.
10. Subordination. Any obligations of Lessee to Guarantor, now or
-------------
hereafter existing, including any obligations to Guarantor as subrogee of Lessor
or resulting from Guarantor's performance under this Guaranty, are hereby
subordinated to the Obligations and any Other Obligations. Such obligations of
Lessee to Guarantor if Lessor so requests shall be enforced and performance
received by Guarantor as trustee for Lessor, and the proceeds thereof shall be
paid over to Lessor on account of the Obligations and all Other Obligations, but
without reducing or affecting in any manner the liability of Guarantor under the
other provisions of this Guaranty.
11. Lessee's Authorization. Where Lessee is a corporation, partnership, or
----------------------
limited liability company, it is not necessary for Lessor to inquire into the
powers of Lessee or of the officers, directors, partners, members, managers, or
agents acting or purporting to act on its behalf, and any Obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
12. Assignments. Lessor may, without notice to Guarantor and without
-----------
affecting Guarantee's obligations hereunder, sell, assign, grant participations
in, or otherwise transfer to any other person, firm, or corporation the Lease,
the Leased Property, the Obligations and this Guaranty, in whole or in part.
Guarantor agrees that Lessor may disclose to any such assignee or purchaser, or
any prospective assignee or purchaser, of all or part of the Lease or the
Obligations any information in Lessor's possession concerning Guarantor, this
Guaranty and any security for this Guaranty.
13. Reinstatement of Guaranty. If any payment or transfer of any interest
-------------------------
in property by Lessee to Lessor is rescinded or must be returned by Lessor to
Lessee, (a) this Guaranty shall be reinstated with respect to any such payment
or transfer, even if this Guaranty was previously returned or canceled, and (b)
Guarantor shall remain fully liable with respect to any such amount as if such
amount had not been paid by Lessee.
2
14. Costs and Expenses. Guarantor agrees to pay all reasonable attorneys'
------------------
fees, including allocated costs of Lessor's internal counsel, and all other
costs and expenses Lessor may incur (a) in the enforcement of this Guaranty or
(b) in the preservation, protection or enforcement of any rights of Lessor in
any case commenced by or against Guarantor under the Bankruptcy Code or any
similar statute.
15. Governing Law. This Guaranty shall be governed by and construed under
-------------
the laws of California, to the jurisdiction of which, and of the Federal courts
in California, Guarantor hereby submits.
16. Interpretation. No provision or waiver in this Guaranty shall be
--------------
construed as limiting the generality of any other waiver in this Guaranty. The
term "including" is not limiting and means "including without limitation".
Section headings are for convenience of reference only and do not affect the
interpretation of this Guaranty. The invalidity of any portion of this Guaranty
shall not affect the remaining provisions. Where more than one Guarantor
executes this Guaranty, all of the provisions hereof shall apply to each of such
persons singly, and the obligations of each such person shall be joint and
several.
Executed as of ______________________.
Guarantor:
/s/ Xxxxxx Xxxx
---------------------------
Tarrant Apparel Group
Print Name
Xxxxxx Xxxx
---------------------------
Address
Address for notices to Lessor: Address for notices to Guarantor
0000 Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000 ----------------------------------------
----------------------------------------
Guarantor:
/s/ Xxxxxxx Xxxxx
---------------------------
TARRANT APPAREL GROUP
Print Name
Xxxxxxx Xxxxx
---------------------------
Address
Address for notices to Guarantor
----------------------------------------
----------------------------------------
----------------------------------------
3
CONTINUING CORPORATE GUARANTY
In consideration of Standard Chartered Bank (the "Bank") purchasing one or more
trade drafts (collectively, the "Draft") drawn on and accepted by our
subsidiary, Tarrant Mexico, X.xx X.X. de C.V. (the "Buyer"), by Xxxxx Xxxxxxx
Cotton International N.V. (acting in its own name and through its affiliates,
Xxxxxxxxx Cotton Co. and/or ACC Mexico S.A. de C.V.), the undersigned hereby
guarantees to the Bank, its successors and assigns, the prompt payment at
maturity of the face amount of the Draft plus (i) interest thereon after the
maturity date at the following rate until payment in full; namely, 3.00% per
annum in excess of the Bank's cost of funds. Such interest rate to change with
each change in the Bank's cost of funds; and (ii) the cost of protest and all
reasonable legal expenses of or for collection, or for realization upon any
underlying collateral.
The aggregate face amount of all Drafts being guaranteed hereby shall not exceed
U.S.$7,000,000.00.
The undersigned further agrees that its payment obligation under this Guaranty
shall be in full force and effect regardless of any contractual, commercial or
product dispute between the Buyer and Xxxxx Xxxxxxx Cotton International N.V.,
Xxxxxxxxx Cotton Co. and/or ACC Mexico S.A. de C.V. with respect to the quality,
quantity or any other aspect of the goods underlying the Draft purchased by the
Bank. The undersigned specifically waives any objection or defense which it or
the Buyer may have against the Bank relating to the goods underlying the Draft.
Demand of payment, presentment, protest and notice of dishonor or non-payment
are hereby expressly waived, and if any of the obligations, debts and/or
liabilities hereby guaranteed are payable on demand, the Bank may, in its sole
and arbitrary discretion, determine the reasonableness of the period which may
elapse prior to the making of demand.
The undersigned hereby consents and agrees that, without notice to or further
assent from the undersigned, the time of payment of all or any of the
obligations, debts and/or liabilities hereby guaranteed, or any other provisions
of said obligations, debts and/or liabilities may be extended, changed or
modified, the parties thereto discharged, any or all collateral thereto released
without obtaining other collateral in substitution therefor, and any composition
or settlement consummated and accepted and that the undersigned will remain
bound upon this Guaranty notwithstanding one or more such extensions, changes,
modifications, discharges, releases,
-2-
compositions or settlements. The undersigned further consents and agrees that
this Guaranty shall not be impaired or otherwise affected by any failure to call
for, take, hold, protect or perfect, continue the perfection of or enforce any
security interest in or other lien upon, any collateral for the obligations,
debts and/or liabilities hereby guaranteed or by any failure to exercise, delay
in the exercise, waiver of, or forbearance or other indulgence with respect to,
any right or remedy available to the Bank.
The undersigned represents and warrants to the Bank that:
(i) it has all necessary power and authority to enter into, execute and
deliver this Guaranty and to exercise its rights and perform its
obligations hereunder and it has taken all necessary corporate and other
action (including, without limitation, obtaining any consent of
stockholders required by applicable law or its Certificate of
Incorporation or By-laws) to authorize the execution, delivery and
performance of this Guaranty;
(ii) this Guaranty is a legal, valid and binding obligation of the
undersigned, enforceable against the undersigned in accordance with its
terms;
(iii) the execution of this Guaranty, its delivery and compliance with its
terms will not contravene any provision of any statute, law, rule or
regulation to which the undersigned is subject and will not contravene or
result in the breach of any covenant of any other agreement to which the
undersigned is a party;
(iv) no authorization or governmental approval or notice to or filing or
registration with any governmental authority or regulatory body is
required in connection with the execution, delivery and performance by the
undersigned of this Guaranty;
(v) the person(s) executing the Guaranty on behalf of the undersigned here
been duly authorized by action at the undersigned's Board of Directors to
do so.
The Bank may also, at any time, in its discretion, and when the Bank may deem it
advisable, compromise, settle or extend time of payment of any of the demands or
obligations represented by any collateral now or hereafter held by it to secure
payment of the Draft hereby guaranteed, or it may sell, assign, transfer and
deliver the whole of such collateral, or any part thereof, or any substitutes
therefor, or any additions thereto, at public or
-3-
private sale, at any time or place selected by the Bank, at such prices as it
may deem best and either for cash or for credit or future delivery, at the
option of the Bank without either demand, advertisement or notice of any kind to
the undersigned, which are hereby expressly waived.
The undersigned further agrees that any money or property at any time in the
possession of the Bank belonging to the undersigned including any deposit
balances and all property or the proceeds thereof held by the Bank for any
purpose including safekeeping, custody, transmission, collection, or pledge,
may, at the option of the Bank, be held as collateral security for the payment
of any liability under this Guaranty and of any liabilities of the undersigned
to the Bank whether due or not, with full power and authority to apply any
deposit balances to the extinguishment of any such liabilities and to sell,
enforce collect or otherwise realize on said money or property in accordance
with applicable law.
The undersigned agrees that the Bank is not to be obligated in any manner to
inquire into the powers of the Buyer, or its successors, its or their directors,
officers, or agents, acting or purporting to act on its or their behalf.
The liability of the undersigned on this Guaranty shall be direct, immediate,
absolute, continuing, unconditional and unlimited and not conditional or
contingent upon the pursuit by the Bank of whatever remedies it may have against
the Buyer or the Buyer's successors, executors, administrators or assigns, or
the securities or liens it may possess, and this Guaranty shall be and shall be
construed as being and intended to be, a continuing Guaranty of the payment of
any and all obligations, debts or liabilities either made, endorsed, or
contracted by the Buyer, or any successor of the Buyer, and of all extensions or
renewals thereof in whole or in part.
The undersigned agrees that in the event that any of the obligations, debts
and/or liabilities hereby guaranteed are paid by the Buyer, the liability of the
undersigned as guarantor(s) shall continue and remain in full force and effect
in the event that all or any part of any such payments is recovered from the
Bank as a preference or fraudulent transfer under Title 11 of the United States
Code or any other applicable federal or state law. The undersigned agrees that
if the Bank gives to the undersigned written notice of the institution of any
action or proceeding, legal or otherwise, between the Bank and the Buyer, the
undersigned shall be conclusively bound by the adjudication in any such legal or
other proceeding, or by any judgment or award decree entered therein.
-4-
So long as any portion of the obligations, debts and/or liabilities hereby
guaranteed remains owing to the Bank by the Buyer, the undersigned shall not
exercise any right to recover the amount of any payment made by it to the Bank
by way of subrogation, reimbursement, contribution, indemnity or otherwise
arising by contract or operation of law and the undersigned shall not exercise
its right to recourse to or make any claim or enforce any security or other
right or claim against the Buyer in respect of any payment to the Bank pursuant
to this Guaranty. The exercise of all such rights are expressly deferred by the
undersigned for the aforesaid period.
The undersigned waives the right to trial by jury in all actions brought by or
against the Bank. The undersigned also waives the right to assert in any action
or proceeding upon this Guaranty any offsets or counterclaims which the
undersigned may have with respect thereto. This Guaranty shall be governed by
and construed and interpreted in accordance with the laws of the State of New
York. This Guaranty cannot be altered or discharged orally. Notice of the
acceptance of this Guaranty is hereby waived.
IN WITNESS WHEREOF, the undersigned has duly executed these presents as of this
6th day of July 1999.
The "undersigned": Tarrant Apparel Group Inc.
By: /s/ Xxxxxx Xxxx
------------------------------------
Title: Chairman & CEO
Date: 7-6-99
Address:
0000 X XXXXXXXXXX XXXX
----------------------------------------
Xxx Xxxxxxx XX 00000
----------------------------------------
----------------------------------------
-5-
SECRETARY'S CERTIFICATE
AND
CORPORATE RESOLUTION
I, Xxxxxxx Xxxxx, Secretary of Tarrant Apparel Group Inc., a California
corporation (the "Corporation") hereby certify that the following is a true
extract from the minutes of a meeting of the Corporation's Board of Directors
duly called and held on July 2, 1999 and is in full force and effect on the date
hereof:
"RESOLVED, that in consideration for Standard Chartered Bank (the
"Bank") purchasing one or more trade drafts drawn on and accepted by
Tarrant Mexico, X.xx X.X. de C.V., this Corporation, acting through
any one of its officers, is hereby authorized and directed to
execute and deliver to the BANK the Continuing Corporate Guaranty
dated as of July 6, 1999 in the form annexed hereto of all
obligations incurred by Tarrant Mexico, X.xx X.X. de C.V. to the
Bank which Guaranty is hereby approved in all respects by this
Corporation."
I also certify that the above-referenced Guaranty has been signed by
Xxxxxx Xxxx, a duly authorized officer of the Corporation.
IN WITNESS WHEREOF, I have signed my name and affixed the corporate seal
this 6th day of July, 1999.
[SEAL] /s/ Xxxxxxx Xxxxx
----------------------------------------
Secretary
MTB BANK
--------------------------------------------------------------------------------
Guarantee
MEANINGS OF CERTAIN TERMS
In this Guarantee:
"Guarantor" means TARRANT APPAREL GROUP, a California corporation. "MTB"
means MTB Bank and its successors arid assigns. "Customer" is the
individual or entity designated as such below. "Obligation(s)" means and
includes loans, overdrafts and any and every other kind of debt or
liability, including any that exist now and those which arise after this
Guarantee is signed, and any interest due on or fees with respect to such
debts and liabilities, including, without limitation, any and all
obligations incurred by Customer under that certain Credit Agreement dated
February 27, 1997, as amended to date, by and between Customer and MTB
(the "Credit Agreement"), together with any and all amendments,
modifications, supplements, refundings and renewals thereto and as such
loans, overdrafts, debts and liabilities may be sold, assigned or
transferred by MTB. It also includes costs, expenses and attorneys' fees
incurred by MTB in connection with any Obligation.
1. JOINT AND SEVERAL LIABILITY-If more than one person signs this Guarantee,
the term "Guarantor" refers to each and all such persons, and all signers
are responsible under this Guarantee jointly and individually.
2. GUARANTOR'S AGREEMENT-To induce MTB to continue to lend money or otherwise
extend credit to the Customer, the Guarantor irrevocably and
unconditionally guarantees payment of every and any of the Customer's
Obligations to MTB when they are due. No invalidity, irregularity or
unenforceability of all or any part of the Obligations or of any security
therefor shall affect, impair or be a defense to this Guarantee. This
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to the validity, regularity or
enforceability of the Credit Agreement, the Note, the Security Agreement
as such terms are defined in the Credit Agreement) or any of the other
Obligations or any collateral security therefor or guarantee thereof,
including, without limitation, this Guarantee, or rights of offset with
respect thereto and without regard to, and the Guarantor hereby waives,
any defense (including, without limitation, any defense based on
suretyship), offset or counterclaim which may at any time be available to
or be asserted by the Customer or the Guarantor against MTB, in bankruptcy
or in any other instance. The Guarantor has not relied on any
representation from MTB in deciding to execute and deliver this Guarantee
and there is nothing unknown to the Guarantor which would alter the
Guarantor's decision to execute and deliver this Guarantee.
3. AMOUNT OF GUARANTOR'S LIABILITY-Guarantor's liability is for the total
amount of all Customer's Obligations to MTB, plus all costs and expenses
(including reasonable attorneys' fees) of enforcement of MTB's rights and
remedies hereunder and of collection.
4. CUSTOMER-The Customer whose Obligations are guaranteed is:
Name of Customer: ROCKY APPAREL, L.P . a Delaware limited partnership
Address of Customer: 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
5. PERIOD OF GUARANTEE - If, at any time, all or part of any payment of the
Obligations made by Customer or the undersigned is rescinded or otherwise
must be returned by MTB for any reason whatsoever (including, but not
limited to, the insolvency, bankruptcy or reorganization of Customer),
this Guarantee shall remain in full force and effect, or shall be
reinstated, as the case may be, as to the Obligations which were satisfied
by the payment to be rescinded or returned, all as though such payment had
not been made.
6. ENFORCEMENT- This is a guarantee of payment and not of collection. If the
Customer fails to pay any Obligations to MTB when due, MTB may take action
against the Guarantor without first taking action against the Customer or
any other collateral for the Customer's Obligations. MTB shall not lose
any rights it has against the Guarantor and this Guarantee shall remain in
full force and effect even if MTB (a) partially or fully releases the
Customer or another Guarantor, or any other collateral for the Customer's
Obligations, (b) delays or waives enforcement of any of the Obligations or
of this Guarantee, or (c) modifies, amends, changes the manner, terms of,
extends the time of payment of, renews or alters any of the Obligations,
or if any agreement between the Customer and MTB is found to be invalid or
unenforceable. No failure on the part of MTB to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided herein are cumulative and not exclusive of any other
remedies whether provided by agreement or by law.
7. COLLATERAL-The following collateral is pledged and delivered to MTB to
secure the Guarantor's Obligations under this Guarantee: Guarantor hereby
grants to MTB a security interest in any property of Guarantor now or
hereafter coming into the possession of MTB. MTB shall have all rights as
a secured creditor under the Uniform Commercial Code of the State of New
York with respect to such collateral.
8. COLLATERAL-MTB'S RIGHTS AND OBLIGATIONS-If the Customer or the Guarantor
gives MTB a security interest in collateral, Guarantor agrees that: (a)
MTB may, but need not, perfect its security interest in any or all of the
collateral; (b) MTB may release any security interest in any such
collateral; (c) MTB may release and return to the Customer any collateral
given by the Customer, and (d) MTB may take or refrain from taking any
action permitted by law or by agreement with respect to the collateral,
including its sale. In such event, this Guarantee will remain effective
and the Guarantor shall remain responsible under this Guarantee to the
same extent as if any of the above enumerated circumstances did not occur.
9. DELIVERY OF NOTICES - If more than one Guarantor is guaranteeing the
Obligations, the Guarantor signing on the first signature line is hereby
appointed the agent and attorney-in-fact of all Guarantors for the purpose
of receiving notices hereunder. Any and all notices to which the
Guarantors may be entitled by law or under this Guarantee shall be deemed
given by MTB to all Guarantors by mailing one such notice by ordinary mail
to the agent Guarantor at the address listed below. All such notices shall
be deemed to have been delivered to all Guarantors when so mailed by MTB
or otherwise delivered to the agent Guarantor.
-2-
10. WAIVER OF RIGHT TO NOTICE - The Guarantor waives the right to receive
notice:
. of the failure of the Customer to meet any Obligation of the
Customer to MTB when due;
. of any default by the Customer under any agreement between the
Customer and MTB;
. of the breach by the Customer of any covenant, promise or warranty.
made by the Customer to MTB;
. of the dishonor of any instrument which evidences an Obligation of
the Customer to MTB;
. of protest regarding any dishonor of any instrument payable by the
Customer;
. that MTB has extended the time for the payment of any Obligations of
the Customer to MTB; and
. of new Obligations of the Customer to MTB as and when they arise, or
renewal by MTB of any existing Obligations.
11. PRIOR GUARANTEES - This Guarantee supersedes and replaces any prior
guarantee by the Guarantor(s) of any Obligation of the Customer to MTB.
12. CREDIT REPORTS - The Guarantor agrees that MTB may request and obtain
credit reports on Guarantor from any consumer reporting agency at any time
while this Guarantee is in effect. MTB will advise the Guarantor whether
or not such a report has been obtained and, if so, the name and address of
any agency that furnished any report.
13. AMENDMENTS - This Guarantee constitutes the entire agreement between MTB
and Guarantor, and cannot be amended or limited except in writing signed
by an officer of MTB.
14. WAIVER OF JURY TRIAL - GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTEE.
15. GOVERNING LAW - This Guarantee shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without
regard to principles of conflicts of law (or any other law the effect of
which would make the laws of any state or jurisdiction other than the
State of New York applicable hereto).
16. CONSENT TO JURISDICTION - GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTEE.
17. WAIVER OF SUBROGATION - Guarantor hereby irrevocably waives (a) any right
of subrogation Guarantor has or may have as against Customer with respect
to the Obligations, (b) any right to proceed against Customer, now or
hereafter, for contribution, indemnity, reimbursement, and any other
suretyship rights and claims, whether direct or indirect, liquidated or
contingent, whether arising under express or implied contract, or
operation of law, which Guarantor may now have or hereafter have as
against the Customer with respect to the Obligations, (c) any rights to
recourse to or with respect to the Obligations and (d) any rights to
recourse to or with respect to any asset of Customer.
18. CONSENT TO SALE, TRANSFER OR ASSIGNMENT - Guarantor hereby irrevocably
consents to the sale, transfer or assignment of any or all of the
Obligations which MTB may elect to make in the future
-3-
and agrees to waive any defense which may otherwise be available to
Guarantor based on such sale, transfer or assignment.
19. ASSIGNABILITY; BINDING EFFECT - This Guarantee shall be binding upon
Guarantor and Guarantor's heirs, legal representatives and assigns and
shall inure to the benefit of MTB and its successors and assigns;
provided, however, that Guarantor shall not be entitled to assign or
delegate any rights or obligations under this Guarantee without the prior
written consent of MTB, and any purported assignment in the absence of
such consent shall be void.
TARRANT APPAREL GROUP
By: /s/ Xxxx X. Xxxxxxx Date: August 7, 1998
--------------------------------
Print Name: Xxxx X. Xxxxxxx
Print Title: V.P.
Address of Guarantor: 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000
STATE OF NEW YORK)
: SS.:
COUNTY OF NEW YORK)
On the 11th day of Aug 1998 before me personally came Xxxx X. Xxxxxxx, to me
known who, being by me duly sworn, did depose and say that he resides at
______________________________; that he is the _________________________ of
TARRANT APPAREL GROUP, the corporation described in and which executed the above
instrument; and that he signed his name thereto by order of all of the Board of
Directors of said corporation.
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Notary Public Xxxxxx X. Xxxxxxxx
[SEAL] Commission # 1131492
Notary Public - California
Los Angeles County
My Comm. Expires Mar 26, 2001
-4-
To: Standard Chartered Bank
1. In consideration of STANDARD CHARTERED BANK (hereinafter called "the Bank",
which expression shall include and extend to its successors and assigns)
granting or continuing banking facilities or other accommodation for so long as
the Bank may think fit to Tarrant Co. Ltd. ______________________________
(hereinafter called the "Customer")
We Tarrant Apparel Group
------------------------------------------------------------------------------
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX00000, XXX
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
hereby unconditionally guarantee, undertake and agree on written demand by the
Bank:
(a) to pay and discharge the following (hereinafter called the "Liabilities"):
(i) all moneys now or hereafter advanced to or paid for or on account of
the Customer (whether alone or jointly with any other person) by the Bank;
and
(ii) all other liabilities of the Customer to the Bank whatsoever, whether
actual or contingent, present or future and including, without limitation,
liabilities incurred as a guarantor or surety together with all interest
thereon and commission, costs, charges and expenses chargeable by the Bank
to the Customer (including legal fees), from time to time remaining unpaid
and undischarged;
PROVIDED ALWAYS that (subject as mentioned in Clause 12) the amount for
which we shall be liable to the Bank under this sub-clause (and not
including any amounts due under sub-clauses (b) and (c) of this Clause)
shall not exceed United States Dollars Thirteen Million Only.
(USD13,000,000.- ) plus interest, commission, cost, charges and expenses
as aforesaid;
(b) to pay interest, in the currency in which such sums are denominated, in the
Bank's books on all sums due from us to the Bank under this Guarantee
(hereinafter called the "Guaranteed Sums") or the outstanding balance thereof
from time to time during the period from the date of demand by the Bank as
aforesaid or from the date of discontinuance of this Guarantee by us until the
date when the Guaranteed Sums are discharged in full (after as well as before
judgment) at a rate or rates per annum conclusively certified by the Bank to be
one and one half of one per cent, (1-1/2%) above the rate or rates at which the
Customer would have been liable to pay interest on the amounts demanded by the
Bank under the facilities or other accommodation extended by the Bank to the
Customer (and to the extent permitted by law the Bank shall be entitled to
compound such interest monthly);
(c) to pay all costs and expenses (on a full indemnity basis) arising out of or
in connection with the recovery or attempted recovery by the Bank of moneys due
to the Bank under this Guarantee.
2. This Guarantee shall extend to cover:
(a) in the case of the death, bankruptcy or liquidation of the Customer, all
sums which would have been owing to the Bank by the Customer if such death had
occurred or such bankruptcy or liquidation had commenced at the time when the
Bank received actual notice thereof and notwithstanding such death, bankruptcy
or liquidation;
(b) all moneys obtained from or liabilities incurred to the Bank notwithstanding
that the borrowing or the incurring of such liabilities may have been invalid
or in excess of the powers of the Customer or of any director, attorney, agent
or other person purporting to borrow or act on behalf of the Customer and
notwithstanding any other irregularity in the borrowing or the incurring of such
liabilities;
(c) in the event of the discontinuance by any means of this Guarantee, all
cheques, drafts, bills, notes and negotiable instruments drawn by or for the
account of the Customer on the Bank and purporting to be dated on or before the
date when such discontinuance became known to the Bank or (in the case of notice
to discontinue given hereunder) took effect although presented to or paid by the
Bank after that date and all liabilities of the Customer to the Bank at such
date whether actual or contingent and whether payable forthwith or at some
future time and also all credits then established by the Bank for the Customer.
3. We shall be deemed to be liable as the sole or principal debtor(s) for the
Liabilities and this Guarantee shall be binding on us notwithstanding that the
Customer is not so bound either because the Customer is an infant or under a
disability or is an unincorporated body which is under no liability to discharge
obligations undertaken or purported to be undertaken on its behalf or for any
other reason whatsoever.
4. If this Guarantee is given in respect of the Liabilities of a firm it shall
apply to all moneys borrowed and Liabilities incurred until receipt by the Bank
of actual notice of dissolution of the firm but if there shall be any other
change in the constitution of the firm this Guarantee shall continue and, in
addition to securing the debts and Liabilities of the firm as constituted before
the change shall apply to the debts and Liabilities of the firm as constituted
after such change.
5. The Bank may at all times without prejudice to this Guarantee and without
discharging or in any way affecting our liability hereunder.
(a) determine, vary or increase any credit to the Customer;
(b) grant to the Customer or to any other person any time or indulgence;
(c) renew any bills, notes or other negotiable instruments or securities;
(d) deal with, exchange, release, modify or abstain from perfecting or enforcing
any securities or other guarantees or rights which the Bank may now or hereafter
have from or against the Customer or any other person;
(e) compound with the Customer or with any other person or guarantor.
6. This Guarantee shall not be affected by any failure on the Bank's part to
take any security or by the invalidity of any security taken or by any existing
or future agreement by the Bank as to the application of any advances made or to
be made to the Customer. Our liability hereunder shall not be discharged or in
any way affected by any act or omission on the part of the Bank under or in
relation to this Guarantee or by any course of dealing between the Bank and us.
7. This Guarantee shall not be considered as satisfied or discharged by any
intermediate payment or satisfaction of the whole or any part of the Liabilities
or by any other matter or thing whatsoever but shall constitute and be a
continuing guarantee to the Bank and shall extend to cover the [ILLEGIBLE]
balance of the Liabilities and shall be binding upon us until the expiration of
one month after the receipt by the Bank from us of notice in writing to
[ILLEGIBLE]
charge, lien or otherwise which the Bank may now or at any time [ILLEGIBLE] the
Liabilities and on discharge by payment or otherwise shall remain the property
of the Bank.
9. In the event of this Guarantee being determined or ceasing from any cause to
be binding as a continuing guarantee on us:
(a) it shall be lawful for the Bank to continue to provide facilities (as
hereinbefore mentioned) to the Customer and to continue any account with the
Customer notwithstanding such event and our liability for the amount of the
Liabilities at the date this Guarantee is determined shall continue
notwithstanding any subsequent payment to or drawing upon or advance by the Bank
by or to or for or on behalf of the Customer; and
(b) [ILLEGIBLE] the Bank may forthwith without thereby affecting its rights
under this Guarantee open a new or separate account with the Customer and, if
the Bank does not open a new or separate account, the Bank shall nevertheless be
treated as if it had done so at the time (the "relevant time") that the Bank
received notice or became aware that this Guarantee had determined or ceased to
be binding as a continuing guarantee and as from the relevant time all moneys
paid by or on behalf of the Customer shall be credited or be treated as having
been credited to the new or separate account and shall on settlement of any
claim in respect of this Guarantee not operate to reduce the amount due from the
Customer at the relevant time or the interest thereon unless the person or
persons paying in such moneys shall at the time of payment direct the Bank in
writing to appropriate the sum specially to that purpose.
10. The Bank shall be entitled at all times to place and keep in a separate or
suspense account or accounts to our credit or to the credit of such other person
as the Bank may think fit any moneys received under this Guarantee or as a
result of the exercise of any of its rights against the Customer or any other
surety in respect of the Liabilities for so long and in such manner as the Bank
may determine without any intermediate obligation to apply the same or any part
thereof in or towards the discharge of the Liabilities and the Bank shall be
entitled to prove against us as if any amount standing to the credit of such
account had not been received. We hereby irrevocably waive any right of
appropriation in respect of any sums paid by us.
11. Until all the Liabilities have been fully paid and discharged (and
notwithstanding that we may have discharged the amount of this Guarantee), we
shall not take any step to enforce any right against the Customer or his/their
representatives in respect of this Guarantee or of any moneys paid hereunder or
prove in any bankruptcy, liquidation, administration, winding up or other
proceeding having an effect equivalent thereto of the Customer (each of which
proceedings are hereinafter called a "Liquidation") in respect thereof in
competition with the Bank or claim the benefit of any securities held by the
Bank.
12. We have not taken and, until the Liabilities and Guaranteed Sums have been
discharged and satisfied in full, will not take without the Bank's prior written
consent any security (which for the purposes of this Clause shall include any
promissory note, cheque or xxxx of exchange) from the Customer in connection
with this Guarantee; and in the event of our having taken or taking any security
in contravention of this provision we will hold the same on trust for the Bank
as further security for the Bank and will forthwith deposit the same and all
documents relating thereto with the Bank and we will account to the Bank for all
moneys at any time received by us in respect thereof and in default of our so
doing the maximum amount for which we are to be liable under this Guarantee (as
set out in Clause 1(a) above) shall be increased by the amount by which any
dividend in the bankruptcy or in the Liquidation of the Customer or otherwise
payable by the Customer to the Bank is thereby diminished.
13. Any settlement or discharge between us and the Bank shall be conditional
upon no security (including without limitation, any guarantee) furnished or
payment made to the Bank by the Customer or any other person being avoided or
reduced by virtue of any relevant statutory provisions or enactments relating to
bankruptcy, winding up or liquidation or other proceeding having an equivalent
effect to any of the foregoing for the time being in force in any jurisdiction
and the Bank shall be entitled to retain any security held in respect of our
liability hereunder (hereinafter called the "Guarantee Security") until the
expiration of the period or periods under such provisions or enactments within
which such payment or security could be avoided or reduced and if within any
such period the payment or security is so avoided or reduced the Bank shall be
entitled to retain the Guarantee Security or any part thereof for and during
such further period as the Bank in its entire discretion shall determine.
14. In any proceedings under or for any other purpose of this Guarantee a
certificate signed by any officer or representative of the Bank certifying the
amount of the Liabilities shall be accepted by us as conclusive evidence
thereof.
(a) We will pay and discharge the Liabilities and any interest payable by
us pursuant to Clause 1(b) hereof, in whatever currency or currencies the
Liabilities are entered in the books of the Bank and if any part of the
Liabilities is entered in a different currency from any other part or parts of
the Liabilities we shall pay and discharge each part of the Liabilities and any
interest payable by us pursuant to Clause 1(b) hereof, in the currency in which
such part or as the case may be such interest is entered in the books of the
Bank and if any such payment or discharge is subject to any withholding or other
tax, duty, levy, impost or charge imposed or levied by or on behalf of any
government or any political subdivision or taxing authority thereof we shall pay
to the Bank such additional amounts as may be necessary to ensure the receipt by
the Bank of the full amount of the Liabilities and any such interest.
(b) For the purposes of ascertaining at any time and in particular on the
date of any demand hereunder the maximum amount (if any) for which we are to be
liable in accordance with Clause 1(a) hereof if some or all of the Liabilities
are entered in the books of the Bank in a currency or currencies other than the
currency in which such maximum amount is denominated (the "Limit Currency")
those parts of the Liabilities denominated in currencies other than the Limit
Currency will be converted, notionally, into the Limit Currency at the rate at
which the Bank would sell to us, in accordance with its usual practices, the
currency in which such other parts of the Liabilities are denominated provided
always and we agree that if some or all of the Liabilities are entered in the
books of the Bank in a currency other than the Limit Currency, and the amount of
the Liabilities exceeds the maximum amount stipulated in Clause 1(a). the Bank
shall be at liberty to elect which parts of the Liabilities shall be and form
part of the Guaranteed Sums.
16. We agree that in addition to any general lien, right to combine or
consolidate accounts, right of set-off or other similar right to which the Bank
may be entitled by law or pursuant to any other agreement, the Bank shall be
entitled at any time and from time to time without notice to us to set-off,
transfer or apply all or any of the moneys from time to time standing to the
credit of any account in our name(s) or of which we are the beneficial owner
with the Bank (regardless of (i) the branch of the Bank at which, or the
currency in which, such account is maintained or (ii) whether such account has
matured or not or is subject to notice or not) in or towards the discharge of
the Liabilities or any other of our obligations under this guarantee and to
purchase therewith for our account any other currency required for such purpose.
17. Any notice or demand hereunder shall be in writing and shall be deemed to
have been sufficiently given if sent by prepaid (and, if posted to a place
outside Hong Kong, air mail) post to the address of the person to whom such
notice or demand is to be given as appearing herein or to such other address as
such person may from time to time have notified to the Bank and any notice or
demand so sent shall be deemed to have been served on the day following the date
of posting if posted in Hong Kong to an address in Hong Kong and on the eighth
day following posting if posted to or from a place outside Hong Kong and in
proving such service it shall be sufficient to prove that the envelope
containing the notice was property addressed, stamped and posted.
18. If any one or more of the provisions of this Guarantee or any part or parts
thereof shall be declared or adjudged to be illegal, invalid or unenforceable
under any applicable law, such illegality, invalidity or unenforceability shall
not vitiate any other provisions of this Guarantee and this Guarantee shall be
construed as if such illegal, invalid or unenforceable provisions were not
contained herein.
19. In this Guarantee wherever the context so requires or admits (i) where the
Customer comprises two or more persons all references to the Customer shall be
construed as references to all or any of such persons, (ii) the singular shall
include me plural and vice versa, (iii) the expression "person" shall mean and
include a company, society, corporation, firm or an individual and in the case
of an individual his or her executors, administrators, committee, receiver or
other person lawfully acting on behalf of every such person, (iv) the expression
this Guarantee shall be construed as including and extending [ILLEGIBLE] any
separate or independent stipulation or agreement herein contained, and (iv) any
reference to any statutory provision or enactment shall be deemed [ILLEGIBLE]
include a reference to any modification or re-enactment thereof for the time
being in force.
20. Where this Guarantee is signed by more than one party our liability
hereunder shall be joint and several and every agreement and undertaking on our
part shall be construed accordingly and all references to us in this Guarantee
shall, where the context requires or admits, be construed as references to all
or any of us and the Bank shall be at liberty to release or discharge any of us
from the liabilities of this Guarantee or to accept any composition from or make
any other arrangements with any of us without releasing or discharging the other
or others of us or otherwise prejudicing or affecting the rights and remedies of
the Bank against the other or others of us and no one of us shall be nor shall
this Guarantee be released or discharged by any take-over reconstruction,
amalgamation, merger, liquidation or change in the constitution of any of us.
[ILLEGIBLE] This Guarantee shall remain valid and binding for all purposes
notwithstanding any change by amalgamation, consolidation or otherwise which
[ILLEGIBLE] and shall be available
23. This Guarantee shall be governed by and construed in accordance with the
laws of Hong Kong and we hereby submit to the non-exclusive jurisdiction of the
Hong Kong courts.
24. We hereby appoint the person named below (if any) as our agent to accept
service of any legal process in Hong Kong in connection with this Guarantee. We
agree that any writ, summons, order, judgment or other document shall be deemed
duly and sufficiently served on us if addressed to us or to the said agent and
left at, or sent by post to the respective address of us or the said agent last
known to the Bank. The foregoing shall not limit the rights of the Bank to serve
process on us in any manner permitted by law in any jurisdiction.
25. We agree that the Chinese translation shall not apply in construing this
security and that the English version shall govern for all purposes.
Dated 2nd day of September 1999.
Name of Process Agent (if any): Tarrant Company Limited
----------------------------------------
Address of Process Agent: 00/X, Xxxxxx Centre
----------------------------------------
00-00 Xxx Xxxx Xxxx, Xxxx Xxxx
----------------------------------------
Kowloon, Hong Kong
----------------------------------------
Corporate Signatory
Signed by:
Xxxxxx Xxxx, Chairman Xxxxxx Xxxx
----------------------------------- --------------------------------------
a Director for and on behalf of (Signature of Director)
Tarrant Apparel Group
----------------------------------
(Name of Company)
in the presence of:
Name of Witness Xxxxxxx Xxxx
----------------------------
I/D Card No
(or equivalent) HKIDO34629(3)
of Witness: ----------------------------
Address of Witness 0000 X. Xxxxxxxxxx Xxxx.
----------------------------
Xxx Xxxxxxx, XX 00000
----------------------------
----------------------------
Occupation of Witness Treasurer /s/ [ILLEGIBLE]
---------------------------- --------------------
Signature of Witness
================================================================================
UNLIMITED CONTINUING GUARANTY
(CORPORATION, INDIVIDUAL, PROPRIETORSHIP, PARTNERSHIP)
================================================================================
Date _______, 19__
--------------------------------------------------------------------------------
NAME NO. AND STREET
Tarrant Apparel Group 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
--------------------------------------------------------------------------------
CITY, VILLAGE XX XXXX XXXXXX XXXXX
Xxx Xxxxxxx Xxxxxxxxxx 00000
(Guarantor) and
--------------------------------------------------------------------------------
LENDING OFFICE, DEPARTMENT OR DIVISION
THE HONG KONG AND SHANGHAI
BANKING CORPORATION LIMITED Hong Kong Xxxx Xxxxxx
--------------------------------------------------------------------------------
XX. XXX XXXXXX XXXX XXXXX
1 Queen's Road Central (Bank)
--------------------------------------------------------------------------------
agree as follows:
1. Guaranty of Payment.
(a) Guarantor hereby unconditionally guarantees the full and prompt
payment to Bank when due, whether by acceleration or otherwise, of any and all
indebtedness (as hereinafter defined) of Tarrant Company Limited (Debtor) to
Bank.
(b) As used in this Guaranty, "Indebtedness" shall mean any and all
indebtedness and other liabilities of Debtor to Bank of every kind and character
and all extensions, renewals and replacements thereof, including, without
limitation, all unpaid accrued interest thereon and all costs and expenses
payable as hereinafter provided: (i) whether now existing or hereafter incurred;
(ii) whether direct, indirect, primary, absolute, joint, several or joint and
several, secondary, contingent, secured, unsecured, matured or unmatured, by
guarantee or otherwise; (iii) whether such indebtedness is from time to time
reduced and thereafter increased, or entirely extinguished and thereafter
reincurred; (iv) whether such indebtedness was originally contracted with Bank
or with another or others; (v) whether or not such indebtedness is evidenced by
a negotiable or non-negotiable instrument or any other writing; and (vi) whether
such indebtedness is contracted by Debtor alone, jointly, severally or jointly
and severally with another or others.
(c) Guarantor acknowledges that valuable consideration supports this
Guaranty, including, without limitation, any commitment to lend, extension of
credit or other financial accommodation, whether heretofore or hereafter made by
Bank to Debtor; any extension, renewal or replacement of any indebtedness, any
forbearance with respect to any Indebtedness or otherwise, any cancellation, of
an existing guaranty; any purchase of any of Debtor's assets by Bank; or any
other valuable consideration
2. Bank's Costs and Expenses. Guarantor agrees to pay on demand all costs
and expenses of every kind incurred by Bank: (a) in enforcing this Guaranty; (b)
in collecting any Indebtedness from Debtor or Guarantor; (c) in realizing upon
or protecting any collateral for this Guaranty or for payment of any
indebtedness; and (d) for any other purpose related to the Indebtedness or this
Guaranty "Costs and expenses" as used in the preceding sentence shall include,
without limitation, the actual attorneys' fees incurred by Bank in retaining
counsel for advice, suit, appeal, any insolvency or other proceedings under the
Federal Bankruptcy Code or otherwise, or for any purpose specified in the
preceding sentence.
3. Nature of Guaranty: Continuing, Absolute and Unconditional.
(a) This Guaranty is and is intended to be a continuing guaranty of
payment of the Indebtedness and not of collection of the Indebtedness
(irrespective of the aggregate amount thereof and whether or not the
Indebtedness from time to time exceeds the amount of this Guaranty, if limited),
independent of, in addition and without modification to, and does not impair or
in any way affect, any other guaranty, indorsement, or other agreement in
connection with the indebtedness, or in connection with any other indebtedness
or liability to Bank, or collateral held by Bank therefor or with respect
thereto, whether or not furnished by Guarantor. This Guaranty and Guarantor's
obligations hereunder shall not be modified, terminated, impaired or in any way
affected by the execution, delivery or performance by Guarantor, Debtor or any
other person of any other guaranty, indorsement or other agreement or the
delivery of collateral therefor. Guarantor waives any claim, remedy or other
right which Guarantor might now have or hereafter acquire against Debtor or any
other person that is primarily or contingently liable for the Indebtedness
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, or any right to participate in any
claim or remedy of Bank against Debtor or any collateral therefor which Bank now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute, or common law.
(b) This Guaranty is absolute and unconditional and shall not be
changed or affected by any representation, oral agreement, act or thing
whatsoever, except as herein provided. This Guaranty is intended by Guarantor to
be the final, complete and exclusive expression of the agreement between
Guarantor and Bank. Guarantor expressly disclaims any reliance on any course of
dealing or usage of trade or oral representation of Bank including, without
limitation, representations to make loans to Debtor or enter into any other
agreement with Debtor or Guarantor. No modification or amendment of any
provision of this Guaranty and no waiver of any right by Bank shall be effective
unless in writing and signed by a duly authorized officer of Bank.
4. Certain Rights and Obligations.
(a) Guarantor authorizes Bank, without notice, demand or additional
reservation of rights against Guarantor and without affecting Guarantor's
obligations hereunder, from time to time: (i) to renew, refinance, modify,
subordinate, extend, increase, accelerate, or otherwise change the time for
payment of, the terms of or the interest on the Indebtedness or any part
thereof; (ii) to accept from any person or entity and hold collateral for the
payment of the Indebtedness or any part thereof, and to exchange, enforce or
refrain from enforcing, or release such collateral or any part thereof; (iii) to
accept and hold any indorsement or guaranty of payment of the Indebtedness or
any part thereof or any negotiable instrument or other writing intended by any
party to create an accord and satisfaction with respect to the Indebtedness or
any part thereof, and to discharge, terminate, release, substitute, replace or
modify any such obligation of any such indorser or guarantor, or any person or
entity who has given any security interest in any collateral as security for the
payment of the Indebtedness or any part thereof, or any other person or entity
in any way obligated to pay the Indebtedness or any part thereof, and to enforce
or refrain from enforcing, or compromise or modify, the terms of any obligation
of any such indorser, guarantor, person or entity; (iv) to dispose of or
substitute any and all collateral securing the Indebtedness in any manner as
Bank, in its sole discretion, may deem appropriate, and to direct the order or
manner of such disposition or substitution and the enforcement of any and all
indorsements and guaranties relating to the Indebtedness or any part thereof as
Bank, in its sole discretion, may determine; and (v) to determine the manner,
amount and time of application of payments and credits, if any, to be made on
all or any part of any component or components of the Indebtedness (whether
principal, interest, costs and expenses, or otherwise), including, without
limitation, if this Guaranty is limited in amount, to make any such application
to Indebtedness, if any, in excess of the amount of this Guaranty.
(b) If any default shall be made in the payment of any Indebtedness,
Guarantor hereby unconditionally agrees to pay the same in full: (i) without
deduction by reason of any setoff, defense or counterclaim of Debtor; (ii)
without requiring protest, presentment or notice of non-payment or notice of
default to Guarantor, to Debtor or to any other person; (iii) without demand for
payment or proof of such demand; (iv) without requiring Bank to resort first to
Debtor (this being a guaranty of payment and not of collection) or to any other
guaranty or any collateral which the Bank may hold; (v) without requiring notice
of acceptance hereof (or of any liability to which this Guaranty applies or may
apply) or assent hereto by Bank; (vi) without requiring notice that any
indebtedness has been incurred or of the reliance by the Bank upon this
Guaranty; and (vii) without notice of dishonor, notices of acceleration, notice
of intent to accelerate, and all other notices and demands, collection suit and
the taking of any other action by Bank; all of which Guarantor hereby waives.
(c) Guarantor's obligation hereunder shall not be affected by any of
the following, all of which Guarantor hereby waives: (i) any failure to perfect
or continue the perfection of any security interest in or other lien on any
collateral securing payment of any Indebtedness or Guarantor's obligations
hereunder; (ii) the invalidity, unenforceability, propriety of manner of
enforcement of, or loss or change in priority of any such security interest or
other lien; (iii) any taking, holding, continuation, collection, modification,
leasing,
-2-
impairment, surrender or abandonment of, or any delay or failure to protect,
preserve or insure, any such collateral; (iv) any delay in the exercise or
waiver of, any failure to exercise, or any forbearance in the exercise of, any
right, power or remedy of Bank or any person (including, without limitation,
those remedies described in Section 4(c)(iii) of this Guaranty) against
Guarantor, Debtor, any person or entity or relating to the Indebtedness or any
part thereof or the collateral therefor; (v) failure of Guarantor to receive
notice of any intended disposition of such collateral; (vi) any defense arising
by reason of the cessation from any cause whatsoever of liability of the Debtor
including, without limitation, any failure, delay, waiver, forbearance,
negligence or omission by Bank in enforcing its claims against the Debtor or any
collateral therefor including, without limitation, any failure to make, prove,
or vote any claim relating to the Indebtedness or any collateral therefor in any
case or proceeding pursuant to the Federal Bankruptcy Code or any similar
law, or any satisfaction of the Indebtedness or any part thereof by reason of
the failure of Bank to recover against any collateral therefor or the failure of
Bank to obtain a judgment for any deficiency; (vii) any release, settlement,
composition, adjustment, renewal, extension, modification, increase,
rearrangement, compromise, replacement, cancellation, discharge, assignment,
sale, exchange, conversion, participation or other transfer or disposition of
any obligation of Debtor or of any collateral therefor; (viii) the invalidity or
unenforceability of any of the Indebtedness; (ix) the creation of any security
interest, lien or other encumbrance in favor of any person other than Bank; (x)
any refusal or failure of Bank or any other person prior to the date hereof or
hereafter to grant any additional loan or other credit accommodation to Debtor
or Bank's or any other party's receipt of notice of such refusal or failure;
(xi) any refusal or failure of Bank or any other person to provide to Guarantor
any information relating to Debtor, any other guarantor, indorser, or any person
or entity who has given any collateral as security for the payment of the
Indebtedness or any information relating to Debtor's or such guarantor's,
indorser's, person's, or entity's financial condition, business or assets, or if
such information is provided, to provide such information completely and
accurately; (xii) any change in the ownership or membership of Guarantor or
Debtor; (xiii) the expiration of the period of any statute of limitations with
respect to any lawsuit or other legal proceeding against Debtor or any person in
any way related to the Indebtedness or a part thereof or any collateral
therefor; or (xiv) any other thing or circumstance which might otherwise
constitute a defense to Guarantor's obligations hereunder.
5. Collateral
(a) As further security for payment of the Indebtedness and of any
other indebtedness, now existing or hereafter incurred, of Guarantor to Bank,
Guarantor hereby grants to Bank a security interest in and lien on any and all
money, securities and other property of whatever nature, of Guarantor, and all
proceeds, replacements, increases, renewals, accessions, products, additions,
apportenances and substitutions thereof, which is or hereafter may be in the
actual or constructive possession or control of Bank in any capacity or of any
third party acting on Bank's behalf, including, without limitation, all deposit
and other accounts and all moneys owed or to be owed by Bank to Guarantor, and
with respect to all such money, securities and other property, Bank shall have
all the rights and remedies of a secured party under the Uniform Commercial Code
and under any other applicable law, as the same may from time to time be in
effect in the State of California, in addition to those rights granted herein or
in any other agreement now or hereafter in effect between Guarantor and Bank.
(b) Guarantor agrees to furnish on Bank's demand, collateral
satisfactory to Bank, as security for this Guaranty and to execute such security
agreements, financing statements and other documents with respect thereto as
Bank shall reasonably request.
6. Guaranty of Performance. Guarantor also guarantees the full, prompt and
unconditional performance of all covenants, duties, obligations and agreements
of every kind owed or hereafter to be owed by Debtor to Bank. Every provision
for the benefit of the Bank contained in this Guaranty shall apply to the
guaranty of performance given in this paragraph.
7. Termination. This Guaranty shall remain in full force and effect as to
each Guarantor until the officer in charge of the Lending Office, Department or
Division of Bank indicted above shall actually receive from such Guarantor
written notice of its discontinuance, or notice of the death or judicial
declaration of incompetency of such Guarantor, provided, however, that this
Guaranty shall remain in full force and effect thereafter until: (i) all
Indebtedness outstanding, or contracted or committed for (whether or not
outstanding), before the receipt of such notice by Bank, and any modifications,
extensions, renewals or replacements thereof (whether made before or after
receipt of such notice), together with interest accruing thereon after such
notice, shall be finally and irrevocably paid in full, and (ii) all of Debtor's
covenants and obligations under any document, instrument or writing at any time
evidencing, securing or in any way relating to the Indebtedness are performed
and satisfied in full, as determined in Bank's sole and absolute discretion.
Discontinuance of this Guaranty as to one Guarantor shall not operate as a
discontinuance hereof as to any other Guarantor. Payment of all of the
Indebtedness from time to time shall not operate as a discontinuance of this
Guaranty, unless notice of discontinuance as above provided has theretofore
actually been received by Bank. Guarantor agrees that, to the intent that Debtor
makes a payment or payments to Bank on the Indebtedness, or Bank receives any
proceeds of collateral to be applied to the Indebtedness, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or otherwise are required to be repaid to
Debtor its estate, trustee, receiver or any other party, including, without
limitation, under any bankruptcy law, state or federal law, common law or
equitable cause, then to the intent of such repayment, the obligation or part
thereof which has been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the date such initial
payment, reduction or satisfaction occurred
-3-
notwithstanding any contrary action which may have been taken by Bank in
reliance upon such payment or payments. As of the date any payment or proceeds
of collateral are returned, the statute of limitations shall start anew with
respect to any action or proceeding by Bank against Guarantor under this
Guaranty. Guarantor shall defend and indemnify Bank of and from any claim or
loss under this paragraph including actual attorneys' and paralegals' fees and
expenses in the defense of any such action or suit.
8. Other Parties; Joint and Several Liability; Subordination.
(a) Bank shall have the right to discharge or release one or more of
the undersigned from any obligation hereunder, in whole or in part, or any other
guarantor, without in any way releasing, impairing or affecting its right
against the other or others of the undersigned or guarantor. The failure of any
other person to sign this Guaranty shall not release or affect the obligations
or liability of the undersigned.
(b) If more than one party executes this Guaranty, the obligations
of the undersigned hereunder shall be joint and several and the term "Guarantor"
shall include each as well as all of them.
(c) So long as any of the Indebtedness is outstanding, Guarantor
hereby subordinates all indebtedness of Debtor to Guarantor to such
Indebtedness. Guarantor agrees that any payment with respect to such
subordinated indebtedness received by Guarantor shall be received by Guarantor
as trustee for, and shall be promptly remitted to, Bank.
9. Hazardous Substances. Debtor hereby agrees to indemnify, pay and hold
Secured Party, and the officers, directors, employees, attorneys, agents and
affiliates of Secured Party (Indemnitees) harmless from and against any and all
liabilities, claims, damages, fines, penalties, liens, expenditures, costs, fees
(including attorneys' fees), losses and charges including, without limitation,
all costs of investigation, monitoring, legal representation, remedial response,
removal, restoration or permit acquisition, which may now or in the future be
undertaken, suffered, paid, awarded, assessed or otherwise incurred by or
asserted against any of the Indemnitees as a result of or related to, either
directly or indirectly, the improper use of wetlands; noise; solid, liquid or
gaseous waste generation, release, or other management activities; the presence
or suspected presence of, Release (as defined below) of or threatened Release of
any Hazardous Substances (as defined below) on, in, under or near any property
or improvements thereon, owned, leased or operated by Debtor, regardless of
whether or not caused by, or within the control of Debtor and regardless of
whether caused in whole or in part by any Indemnitees' negligence. The
obligations of Debtor under this paragraph 9 shall survive foreclosure (or its
equivalents), repayment of the Indebtedness and termination of this Agreement
and shall not be reduced or impaired by any investigation made by or on behalf
of any of the Indemnitees. For the purposes of this Paragraph 9, (i) "Hazardous
Substances" means, without limitation, any explosives, radon, radioactive
materials, asbestos, urea formaldehyde, foam insulation, polychlorinated
biphenyls, petroleum oil, or fractions thereof, methane, "hazardous materials"
as defined by or listed pursuant to the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801 et seq., hazardous wastes, hazardous or toxic substances
or any other material defined as a hazardous substance in Section 101(14) of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Sections 9601 et seq., or as a hazardous or toxic substance or other
contaminant under applicable state or local law, regulation or ordinance; and
(ii) "Release" has the same meaning as given to that term in Section 10l(22) of
such Act and the regulations promulgated thereunder. Debtor shall bear the
burden of proof by preponderance of the evidence that the indemnification
contained in this Guaranty is inapplicable to any claim or assertion made
hereunder.
10. Miscellaneous.
(a) "Debtor" and "Guarantor" as used in this Guaranty shall include:
(i) any successor individual or individuals, association, partnership or
corporation to which all or a substantial part of the business or assets of
Debtor or Guarantor shall have been transferred including, without limitation, a
debtor in possession under the Federal Bankruptcy Code; (ii) in the case of a
partnership Debtor or Guarantor, any new partnership which shall have been
created by reason of the admission of any new partner or partners therein or by
reason of the dissolution of the existing partnership by voluntary agreement or
the death, resignation or other withdrawal of any partner; and (iii) in the case
of a corporate Debtor or Guarantor, any other corporation into or with which
Guarantor or Debtor (if Debtor is a corporation) shall have been merged,
consolidated, reorganized, or absorbed.
(b) Without limiting any other right of Bank, whenever Bank has the
right to declare any Indebtedness to be immediately due and payable (whether or
not it has so declared), Bank at its sole election may set off against the
Indebtedness any and all moneys then owed to Guarantor by Bank in any capacity,
whether or not the Indebtedness or the obligation to pay such moneys owed by
Bank is then due, and Bank shall be deemed to have exercised such right of
setoff immediately at the time of such election even though any charge therefor
is made or entered on Bank's records subsequent thereto.
-4-
(c) Guarantor's obligation hereunder is to pay the indebtedness in
full when due according to its terms, and shall not be affected by any extension
of time for payment by Debtor, any bar to the enforceability of the
Indebtedness, or any limitation on the right to attorneys' fees, resulting from
any proceeding under the Federal Bankruptcy code or any similar law. Guarantor's
obligation under this Guaranty shall also include payment of interest accrued on
the Indebtedness before or after a filing of a petition under the bankruptcy
laws and interest on, and principal of, loans made to the debtor in possession
after the filing of such a petition by or against Debtor.
(d) No course of dealing or usage of trade, and no oral or written
representations or agreement, between Debtor or Guarantor and Bank, whether or
not relied on or acted upon, and no act, delay or omission by Bank in exercising
any right or remedy hereunder or with respect to any Indebtedness shall operate
as a waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right or remedy. The giving of notice or a demand by Bank
at any Bank at any time shall not operate as a waiver in the future of the
Bank's right to exercise any right or remedy without notice or demand. Bank may
remedy any default by Debtor under any agreement with Debtor or with respect to
any Indebtedness in any reasonable manner without waiving the default remedied
and without waiving any other prior or subsequent default by Debtor. After
Debtor's failure to pay the Indebtedness in full, or any part thereof, Bank may
exercise against Guarantor each right and remedy of a creditor against a
principal debtor upon a past due liquidated obligation. All rights and remedies
of Bank hereunder, at law and in equity, are cumulative.
(e) Bank and Guarantor as used herein shall include the respective
heirs, legal representatives, beneficiaries, trustees, executors or
administrators, or successors or assigns, of those parties. The rights and
benefits of Bank hereunder shall, if Bank so directs, inure to any party
acquiring any interest in the Indebtedness or any part thereof. If any right of
Bank hereunder is construed to be a power of attorney, such power of attorney
shall not be affected by the subsequent disability or incompetence of Debtor or
Guarantor.
(f) Bank's rights and remedies under this Guaranty are assignable
and any participation may be panted by Bank herein in connection with the
assignment or granting of a participation by Bank in the Indebtedness or any
part thereof.
(g) Captions of the sections of this Guaranty are solely for the
convenience of Bank and Guarantor, and are not an aid in the interpretation of
this Guaranty.
(h) GUARANTOR IRREVOCABLY AGREES THAT, SUBJECT TO BANK'S SOLE AND
ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR
RELATED TO THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO SHALL BE LITIGATED
IN COURTS HAVING SUITS WITHIN THE CITY AND STATE IN WHICH SECURED PARTY'S AS
SPECIFIED ABOVE IS LOCATED. GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SUCH CITY AND
STATE AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON GUARANTOR AND
AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED
TO GUARANTOR AT THE ADDRESS SPECIFIED ABOVE OR IN ANY OTHER MANNER PERMITTED BY
LAW. GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT AGAINST GUARANTOR BY BANK IN ACCORDANCE WITH
THIS PARAGRAPH.
(i) If any provision of this Guaranty is unenforceable in whole or
in part for any reason, it shall be deemed modified to the intent necessary to
make it or the applicable provison enforceable, or if for any reason such
provision is not deemed modified, the remaining provisions shall continue to be
effective.
(j) Any payment or other act which results in the extension or
renewal of the statute of limitations in connection with any action or
proceeding against the Debtor relating to the Indebtedness, shall extend or
renew the statute of limitations in connection with any action or other
proceeding against the Guarantor in connection with this Guaranty whether or not
Guarantor had notice of, or consented to, such payment or act.
(k) Any demand for payment against Guarantor made by Bank under this
Guaranty shall be in writing and delivered in person or by first class mail
postage prepaid at the Guarantor's address first written above, and shall be
deemed received: (i) upon delivery, if delivered in person, and (ii) two days
after deposited in the mail or delivered to the post office, if mailed.
(l) This Guaranty and the transactions evidenced hereby shall be
governed by, and construed and enforced accordance with, the laws of the State
of California without regard to principles of conflicts of law.
-5-
(m) GUARANTOR AND BANK HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY GUARANTOR AND BANK MAY HAVE IN
ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS GUARANTY
OR THE TRANSACTIONS RELATED HERETO. GUARANTOR REPRESENTS AND WARRANTS THAT NO
REPRESENTATIVE OR AGENT OF BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL
WAIVER. GUARANTOR ACKNOWLEDGES THAT BANK HAS BEEN INDUCED TO ENTER INTO THIS
GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
(n) If this Guaranty or the Indebtedness is secured in whole or in
part by real property, Guarantor hereby waives, to the fullest extent permitted
by law, the benefit of any applicable anti-deficiency law and one form of action
rule.
This Guaranty is unlimited in amount, unless an amount is inserted
in the space at the end of this paragraph. Only if an amount is so inserted,
this Guaranty is limited to that amount (hereinafter referred to as the "Maximum
Amount"), plus the sum of: (a) all unpaid interest which accrues on the Maximum
Amount until payment of the Maximum Amount in full, calculated at the rate
provided for in any instrument, document or agreement evidencing or pertaining
to the Indebtedness; (b) all costs and expenses payable pursuant to Section 2(a)
of this Guaranty; and (c) an amount equal to a fraction of all costs and
expenses payable pursuant to Sections 2(b), 2(c) and 2(d) of this Guaranty, the
numerator of which fraction is the Maximum Amount and the denominator of which
fraction is the sum of all outstanding Indebtedness (less any unpaid accrued
interest thereon), if such Indebtedness is either (i) payable on demand by its
terms and for which the Bank has made demand for payment, or (ii) payable other
than on demand by its terms and is presently due and owing, whether by maturity,
acceleration or otherwise. Minimum Amount Unlimited.
(SEAL) Guarantor(s) Name Tarrant Apparel Group
By: /s/ Xxxxxx Xxxx
---------------------------------
Print Name: Xxxxxx Xxxx
Title: Chairman & CEO
INDIVIDUAL OR PROPRIETORSHIP
STATE OF _______________)
) SS:
COUNTY OF ______________)
On __________, 19__, before me personally came _________________ to me
known to be the person(s) described in and who executed the foregoing Guaranty,
and (severally) acknowledged to me that (s)he executed the same
_________________________
Notary Public
PARTNERSHIP
STATE OF _______________)
) SS:
COUNTY OF ______________)
On ____________, 19__, before me personally came _____________________ to
me known to be the person who executed the foregoing Guaranty, and who, being
duly sworn by me, did depose and say that (s)he is a general partner in the
partnership described in the foregoing Guaranty, that (s)he executed the
foregoing Guaranty in the name of such partnership and that (s)he had authority
to sign the same; and (s)he acknowledged to me that (s)he executed the same as
the act and deed of such partnership.
_________________________
Notary Public
CORPORATION
STATE OF CALIFORNIA )
) SS:
COUNTY OF LOS ANGELES )
On 0[ILLEGIBLE]-04-96, 1996, before me came Xxxxxx Xxxx to me known, who,
being by me duly sworn, did depose and say that (s)he resides at Los Angeles,
that (s)he is ________________ of __________________, the corporation described
in and which executed the foregoing instrument, and that (s)he signed his (her)
name thereto by order of the Board of Directors of said corporation.
/s/ Xxxxxx X. Xxxxxxxx
-------------------------
Notary Public
=================================
XXXXXX X. XXXXXXXX
COMM. #987006
[SEAL] Notary Public - California
LOS ANGELES COUNTY
My Comm. Expires MAR 7, 1997
=================================
--------------------------------------------------------------------------------
FINOVA [LOGO]
Continuing Guaranty
Borrower: Tag Mex, Inc.
Guarantor(s): Tarrant Apparel Group
Date: April 28, 1999
This Continuing Guaranty is executed by the above-named guarantor(s)
(jointly and severally, the "Guarantor"), as of the above date, in favor of
FINOVA CAPITAL CORPORATION ("FINOVA"), with an address at 000 X. Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, with respect to the Indebtedness of
the above-named borrower ("Borrower").
1. In consideration of and in order to induce FINOVA, its successors,
endorsees or assigns to grant and continue to grant such advances, loans or
extensions of credit directly or indirectly to the Borrower and to grant to
Borrower such renewals, extensions, forbearances, releases of collateral or
other relinquishment of legal rights as FINOVA may deem advisable, and for other
good and valuable consideration, receipt of which is hereby duly acknowledged,
the Guarantor, for the Guarantor and for their heirs and personal
representatives, or successors, and assigns of the Guarantor, hereby absolutely
and unconditionally guarantees to FINOVA, its successors, endorsees and assigns,
the prompt and unconditional payment when due (whether at maturity, by
acceleration or otherwise and at all times thereafter of the following (the
"Indebtedness"): any and all obligations or liabilities of every kind, nature
and character (including all renewals, extensions and modifications thereof) of
Borrower to FINOVA, its successors, endorsees or assigns howsoever created or
arising, whether or not represented by negotiable instruments or other writings,
whether now existing or hereafter incurred, whether originally contracted with
FINOVA or with another and assigned or transferred to FINOVA or otherwise
acquired by FINOVA, whether contracted by Borrower alone or jointly with others,
and whether absolute or contingent, secured or unsecured, matured or unmatured,
including but not limited to any and all sums, late charges, disbursements,
expenses, legal fees and any deficiency upon enforcement of collateral,
agreements and contracts in connection with all of such obligations.
2. Guarantor consents that without notice to or further assent by
Guarantor, the obligation of Borrower or of any other party for the liability
hereby guaranteed may be renewed, extended, modified, prematured or released by
FINOVA as it may deem advisable in its sole and absolute discretion, and that
any security or securities which FINOVA holds may be exchanged, sold, released,
or surrendered by it, as it may deem advisable in its sole and absolute
discretion, without impairing or affecting the obligation of Guarantor
hereunder.
3. Guarantor waives any and all notice of the acceptance of this guaranty,
or of the creation, renewal or accrual of any obligations or liability of
Borrower to FINOVA, present or future, or of the reliance of FINOVA upon this
guaranty. Any and every obligation or liability of Borrower to FINOVA herein
described shall conclusively be presumed to have been created, contracted or
incurred in reliance upon this guaranty, and all dealings between Borrower and
FINOVA shall likewise be presumed to be in reliance upon this guaranty.
Guarantor waives protest, presentment, demand for payment, notice or default or
non-payment and notice of dishonor to or upon Guarantor. Borrower or any other
party liable for any of Borrower's obligations hereby granted.
4. This guaranty shall be construed as an absolute and unconditional
guaranty of payment without regard to the validity, regularity or enforceability
of any obligation or purported obligation of Borrower. FINOVA shall have all of
its remedies under this guaranty without being obliged to resort first to any
security or to any other remedy or remedies to enforce payment or collection of
the obligations hereby guaranteed and may pursue all or any of its remedies at
one or at different times. FINOVA is hereby given a continuing lien for the
purposes and security of this guaranty as well as for any other obligation or
liability (present or future, absolute or contingent, due or not due) of
Guarantor to FINOVA upon all property and securities now or hereafter given unto
or left in the possession or custody of FINOVA for any purpose (including
property left in safekeeping or custody), by or for the account of any
Guarantor, and also upon any deposits with or any credit or claim of any
Guarantor against FINOVA existing from time to time. FINOVA is hereby authorized
and empowered, upon the occurrence of any of the events set forth in the next
succeeding paragraph, to appropriate and apply to the payment and extinguishment
of the liability of Guarantor any and all such monies, property, securities,
deposits or
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FINOVA Continuing Guaranty
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credit balances without demand, advertisement or notice, all of which are hereby
expressly waived.
5. Upon the default of Borrower or any Guarantor with respect to any
obligations or liabilities of either of them to FINOVA or in the event Borrower
or any Guarantor shall die or become insolvent or make an assignment for the
benefit of creditors, or if a petition in bankruptcy be filed by or against
Borrower or any Guarantor, or in the event of the appointment of a receiver
(either at law or in equity) of Borrower or of any Guarantor, or in the event
that a judgment is obtained or warrant of attachment issued against Borrower or
any Guarantor, or in the event that the financial or business condition of any
of them shall so change as in the opinion of FINOVA will materially impair its
security or increase its risk, all or any part of the obligations and
liabilities of Borrower and/or of Guarantor to FINOVA, whether direct or
contingent, and of every kind and description, shall, without notice or demand,
become immediately due and payable insofar as this guaranty is concerned, and
shall be taken up forthwith by Guarantor, and in any of such events, and whether
or not the said liabilities and obligations are due and payable. FINOVA may (in
addition to, and subject to its rights and remedies under the terms of any
special contract with Borrower), without demand of performance or advertisement
or notice of intention to sell or of time or place of sale, or to redeem, or
other notice whatsoever to Guarantor or to Borrower (all and each of which
demands, advertisements and notices being hereby expressly waived), sell any and
all collateral which it may hold for said obligations, or under this guaranty,
in one or more parcels, at public or private sale, at FINOVA's office or
elsewhere, at such prices as FINOVA may deem best, either for cash or credit,
with the right of FINOVA at any such sale, public or private, to purchase the
whole or any part of said collateral free from any right or equity of
redemption, which right or equity is hereby expressly waived. FINOVA may, in its
uncontrolled discretion, apply the net proceeds of such sale or sales to payment
on account of the obligations or liabilities of Borrower and Guarantor in such
manner and order of priority as FINOVA may, in its absolute and uncontrolled
discretion, elect. If, in the opinion of FINOVA, any collateral deposited
hereunder cannot be freely sold or disposed of at public or private sale
(because of any relationship between the owner and issuer thereof or otherwise),
FINOVA shall have the unqualified right (in addition to all other rights
hereunder) to sell the same, or any part thereof, to a purchaser or purchasers,
under investment letters, for a negotiated price or prices which, under such
circumstances, shall be deemed to be fair and equitable.
6. Any stocks, bonds or other securities held by FINOVA hereunder may,
whether or not Borrower or Guarantor is in default, be registered and held in
the name of FINOVA or its nominee, and FINOVA or said nominee may exercise all
voting and corporate rights relating thereto as if the absolute owner thereof.
7. The term "Borrower" as used herein shall include the individual or
individuals, association, partnership or corporation named herein as Borrower,
and (a) any successor individual or individuals, association, partnership or
corporation to which all or substantially all of the business or assets of said
Borrower shall have been transferred, (b) in the case of a partnership Borrower,
any new partnership which shall have been created by reason of the admission of
any new partner or partners therein and/or the dissolution of the existing
partnership by the death, resignation, or other withdrawal of any partner, and
(c) in the case of a corporate Borrower, any other corporation into or with
which said Borrower shall have been merged, consolidated, reorganized, purchased
or absorbed. The right of FINOVA to hold, deal with and dispose of the property
deposited by Guarantor hereunder, as herein provided, shall continue unimpaired
notwithstanding any invalidity or unenforceability of this guaranty as against
Guarantor personally.
8. FINOVA's books and records showing the account between FINOVA and
Borrower shall be admissible as evidence in any action or proceeding, shall be
binding upon the Guarantor for the purpose of establishing the items therein set
forth and shall constitute prima facie proof hereof, FINOVA's monthly statements
-----------
rendered to Borrower shall, to the extent to which no written objection is made
within sixty (60) days after the date thereof, constitute an account stated
between FINOVA and Borrower and be binding upon the Guarantor.
9. The Guarantor waives any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which the Guarantor may
now or hereafter have against Borrower, or any person other than a coguarantor
directly or contingently liable for the obligations guaranteed hereunder, or
against or with respect to the Borrower's property (including without
limitation, property collateralizing the Guarantor's obligations to FINOVA)
arising from the existence or performance of this guaranty.
10. The Guarantor represents and warrants that there is no existing
indemnification agreement, whether qualified or unqualified, between the
undersigned and Borrower. The undersigned waives any right he may otherwise have
to seek a stay from any United States Bankruptcy Court, in which Borrower may
become a debtor, of any claim or cause of action hereinafter asserted against
the Guarantor on his guaranty, whether in an action commenced against the
undersigned as a guarantor prior to or instituted following the filing a Chapter
figure 11 petition by or against Borrower. The Guarantor further acknowledges
that this waiver hereinabove, is specifically provided to FINOVA as an
inducement to it to effect the financial accommodations provided by FINOVA to
Borrower.
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FINOVA Continuing Guaranty
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11. This guaranty shall, without further reference, pass to, and may be
relied upon and enforced by, any successor or assignee of FINOVA and any
transferee or subsequent holder of any of said liabilities or obligations of
Borrower. This guaranty may be terminated (but only insofar as it may relate to
obligations of Borrower arising subsequent to such termination) upon written
notice to that effect delivered by Guarantor to an officer of FINOVA, such
termination to be effective only upon the execution by such officer of a written
receipt therefor, and in the event of such termination, Guarantor and his or
their respective executors, administrators or successors and assigns shall
nevertheless remain liable with respect to obligations incurred or arising
theretofore, and with respect to such obligations and any renewals, extensions
or other liabilities arising out of same, this guaranty shall continue in full
force and effect, and FINOVA shall have all the rights herein provided for as if
no such termination had occurred.
12. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF FINOVA AND OF THE
GUARANTOR SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA. THE GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN THE STATE OF CALIFORNIA FOR A DETERMINATION
OF ANY DISPUTE CONNECTED WITH THIS GUARANTY AND AUTHORIZES THE SERVICE OF
PROCESS ON THE GUARANTOR BY REGISTERED OR CERTIFIED MAIL SENT TO THE GUARANTOR
AT THE ADDRESS OR ADDRESSES OF THE GUARANTOR. AS THE CASE MAY BE AS HEREIN SET
FORTH OR AS SET FORTH ON ANY RECORD MAINTAINED BY FINOVA. GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT GUARANTOR MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING; AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW; GUARANTOR AGREES NOT TO INSTITUTE ANY LEGAL ACTION
OR PROCEEDING AGAINST FINOVA OR ANY OF FINOVA'S DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR PROPERTY CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THIS
CONTINUING GUARANTY IN ANY COURT OTHER THAN ONE LOCATED IN LOS ANGELES,
CALIFORNIA. Nothing herein shall affect or impair FINOVA's right to serve legal
process in any manner permitted by law or FINOVA's right to bring any action or
proceeding against Guarantor or its property in the courts of any other
jurisdiction. This guaranty cannot be changed or terminated orally, shall be
binding upon the heirs, executors, administrators, successors and assigns of the
Guarantor and shall inure to the benefit of FINOVA's successors and assigns.
13. (a) Without limiting the generality of any other provision of this
guaranty, Guarantor hereby expressly waives: (i) all rights and benefits under
Section 2809 of the California Civil Code purporting to reduce Guarantor's
obligation in proportion to the principal obligation hereby guaranteed, and any
defense based on or arising out of any defense the person or entity primarily
liable may have to payment or to performance of any covenants or obligations;
(ii) all rights and benefits under Section 2845 of the California Civil Code
which, among other things, permits a guarantor or surety to require any creditor
to pursue its debtor, any security which said creditor may hold, or any other
remedy before proceeding against Guarantor' (iii) any defense, right of set-off,
claim or counterclaim whatsoever (other than payment and performance in full of
all of the Liabilities after any termination of the Loan Agreement in
accordance with the terms of the Loan Documents, and any and all other rights,
benefits, protections and other defenses which Guarantor may have, now or at any
time hereafter, to full payment or performance of the Liabilities pursuant to
the terms of this guaranty, including, without limitation, under California
Civil Code Sections 2809, 2810, 2819, 2820, 2821, 2839, 2845, 2847, 2848, 2849,
2850 and 2855, and California Code of Civil Procedure Sections 580a, 580b and
580d, and all successor sections: and (iv) Guarantor hereby specifically waives
the provisions of California Civil Code Section 2815, and any successor section,
with respect to this guaranty and all security for the obligations of Guarantor
hereunder.
(b) Guarantor consents and agrees that, without notice to or by Guarantor
and without affecting or impairing in any way the obligations or liability of
Guarantor hereunder. FINOVA may, from time to time, before or after revocation
of this guaranty, exercise any right or remedy it may have with respect to any
or all of the Indebtedness or any property securing any or all of the
Indebtedness or any guaranty thereof, including without limitation judicial
foreclosure, nonjudicial foreclosure, exercise of a power of sale, and taking a
deed, assignment or transfer in lieu of foreclosure as to any such property, and
Guarantor expressly waives any defense based upon the exercise of any such right
or remedy, notwithstanding the effect thereof upon any of Guarantor's rights,
including without limitation, any destruction of Guarantor's right of
subrogation against Borrower and any destruction of Guarantors right of
contribution or other right against any other guarantor of any or all of the
Indebtedness or against any other person, whether by operation of Sections 580a,
580d or 726 of the California Code of Civil Procedure, or any comparable
provisions of the laws of any other jurisdiction, or any other statutes or rules
of law now or hereafter in effect, or otherwise. Without limiting the generality
of the foregoing, (i) Guarantor waives all rights and defenses arising out of an
election of remedies by FINOVA, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for any of the Indebtedness,
has destroyed the guarantors rights of subrogation and reimbursement against the
principal by the operation of Section 580d of the Code of Civil Procedure or
otherwise, (ii) Guarantor further waives all rights and defenses arising out of
an election or remedies by FINOVA, even though that election of
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FINOVA Continuing Guaranty
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remedies, such as a nonjudicial foreclosure with respect to security for any of
the Indebtedness, has destroyed the guarantor's rights of subrogation,
reimbursement and contribution against any other guarantor of the guaranteed
obligation, by the operation of Section 580d of the Code of Civil Procedure or
otherwise. (iii) Guarantor understands that if FINOVA forecloses any present or
future trust deed, which secures any or all of the Indebtedness or which secures
any other guaranty of any or all of the Indebtedness, by nonjudicial
foreclosure. Guarantor may, as a result, have a complete defense to liability
under this guaranty, based on legal doctrine of estoppel and Sections 580a, 580d
or 726 of the California Code of Civil Procedure, and Guarantor hereby expressly
waives all such defenses. (iv) Guarantor understands and agrees that, in the
event FINOVA in its sole discretion forecloses any trust deed now or hereafter
securing any or all of the Indebtedness, by nonjudicial foreclosure, Guarantor
will remain liable to FINOVA for any deficiency even though Guarantor will lose
his right of subrogation against the Borrower, and even though Guarantor will be
unable to recover from the Borrower the amount of the deficiency for which
Guarantor is liable, and even though Guarantor may have retained his right of
subrogation against Borrower if FINOVA had foreclosed said trust deed by
judicial foreclosure as opposed to nonjudicial foreclosure, and even though
absent the waivers set forth herein Guarantor may have had a complete defense to
any liability for any deficiency hereunder. (v) Guarantor understands and agrees
that, in the event FINOVA in its sole discretion forecloses any trust deed now
or hereafter securing any other guaranty of any or all of the Indebtedness, by
nonjudicial foreclosure. Guarantor will remain liable to FINOVA for any
deficiency, even though Guarantor will lose his right of subrogation or
contribution against the other guarantor, and even though Guarantor will be
unable to recover from the other guarantor any part of the deficiency for which
Guarantor is liable, and even though Guarantor may have retained his right of
subrogation or contribution against the other guarantor if FINOVA had foreclosed
said trust deed by judicial foreclosure as opposed to nonjudicial foreclosure,
and even though absent the waivers set forth herein Guarantor may have had a
complete defense to any liability for any deficiency hereunder.
14. Guarantor agrees that, whenever an attorney is used to obtain payment
under or otherwise enforce this guaranty or to enforce, declare or adjudicate
any rights or obligations under this guaranty or with respect to collateral,
whether by legal proceeding or by any other means whatsoever, FINOVA's
reasonable attorney's fee plus costs and expenses shall be payable by each
Guarantor against whom this guaranty or any obligation or right hereunder is
sought to be enforced, declared or adjudicated. Guarantor, if more than one,
shall be jointly and severally bound and liable hereunder and if any of the
undersigned is a partnership, also the members thereof individually. In
addition, Guarantor waives the performance of each and every condition precedent
to which Guarantor might otherwise be entitled by law. FINOVA shall have the
right to fill in any blank spaces left in this guaranty (including the name of
"Borrower"), to date this guaranty and to correct patent errors therein.
15. Guarantor is fully aware of the financial condition of Borrower and is
executing and delivering this guaranty at Borrowers request and based solely
upon his own independent investigation of all matters pertinent hereto, and
Guarantor is not relying in any manner upon any representation or statement of
FINOVA with respect thereto. Guarantor represents and warrants that he is in a
position to obtain, and Guarantor hereby assumes full responsibility for
obtaining, any additional information concerning Borrower's financial condition
and any other matter pertinent hereto as Guarantor may desire, and Guarantor is
not relying upon or expecting FINOVA to furnish to him any information now or
hereafter in FINOVA's possession concerning the same or any other matter. By
executing this guaranty, Guarantor knowingly accepts the full range of risks
encompassed within a contract of continuing guaranty. which risks Guarantor
acknowledges include without limitation the possibility that Borrower will incur
additional Indebtedness for which Guarantor will be liable hereunder after
Borrower's financial condition or ability to pay such Indebtedness has
deteriorated and/or after bankruptcy or insolvency proceedings have been
commenced by or against Borrower. Guarantor shall have no right to require
FINOVA to obtain or disclose any information with respect to the Indebtedness,
the financial condition or character of Borrower, the existence of any
collateral or security for any or all of the Indebtedness, the filing by or
against Borrower of any bankruptcy or insolvency proceeding, the existence of
any other guaranties of all or any part of the Indebtedness, any action or
non-action on the part of FINOVA. Borrower, or any other person, or any other
matter, fact, or occurrence.
16. The Guarantor acknowledges that this guaranty and the Guarantor's
obligations under this guaranty are and shall at all times continue to be
absolute and unconditional in all respects and shall at all times be valid and
enforceable irrespective of any other agreements or circumstances of any kind or
nature whatsoever which might otherwise constitute a defense to this guaranty
and the obligations of the Guarantor under this guaranty or the obligations of
any other person or party (including, without limitation, the Borrower) relating
to this guaranty or the obligations of the Guarantor hereunder or otherwise with
respect to any transactions involving the Borrower and FINOVA. This Guaranty
sets forth the entire agreement and understanding of FINOVA and Guarantor and
Guarantor absolutely. unconditionally and irrevocably waives any and all right
to assert any defense, set-off, counterclaim or cross-claim of any nature
whatsoever (including, but not limited to, fraud in the inducement and
commercial disposition of collateral of the Guarantor or Borrower) with respect
to this guaranty or the obligations of the Guarantor under this guaranty or the
obligations of any other person or party (including without limitation,
Borrower) relating to this guaranty or the obligations of the Guarantor under
this guaranty or otherwise with respect to any transactions involving the
Borrower and FINOVA in any action or proceeding brought by its successors and
assigns, to collect the Debt or any portion thereof, or to enforce, the
obligations of the Guarantor under this guaranty. The Guarantor acknowledges
that no oral or other agreements,
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FINOVA Continuing Guaranty
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understandings, representations or warranties exists with respect to this
guaranty or with respect to the obligations of the Guarantor under this
guaranty, except as specifically set forth in this guaranty.
17. No executory agreement and no course of dealing between Guarantor and
FINOVA shall be effective to change or modify this guaranty in whole or in part;
nor shall any change, modification or waiver of any rights or powers of FINOVA
be valid or effective unless in writing or signed by an authorized officer of
FINOVA.
18. MUTUAL WAIVER OF RIGHT TO JURY TRIAL. FINOVA, BY ITS ACCEPTANCE
HEREOF, AND GUARANTOR EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION
OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS
AGREEMENT; OR (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
FINOVA AND GUARANTOR; OR (iii) ANY CONDUCT, ACTS OR OMISSIONS OF FINOVA OR
GUARANTOR OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR
ANY OTHER PERSONS AFFILIATED WITH FINOVA OR GUARANTOR; IN EACH OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
Guarantor:
TARRANT APPAREL GROUP
By: /s/ [ILLEGIBLE]
------------------
Title: V.P.
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SCHEDULE 8.8
OUTSTANDING INDEBTEDNESS
Schedule of Bank Debts
Bank Limit Borrower
---- ----- --------
MTB Bank $ 2,500,000 Rocky Apparel
Hongkong Bank $33,000,000 Tarrant Co. Ltd.
SCB, NY $10,000,000 Tarrant Apparel Group
SCB, HK $13,000,000 Tarrant Co. Ltd.
Banco BilBao $ 1,000,000 Famian
Banco International $ 222,222 Famian
BA Leasing $ 5,131,014 Tarrant Apparel Group
GE Capital $15,489,444 Tarrant Apparel Group
Bankers Direct $ 4,876,769 Tarrant Apparel Group
(approved but not drawn yet)
Promissory Notes:
----------------
Company Amount Nature
------- ------ ------
Picanol $ 5,794,460.55 USD Rocky Apparel
W. Schlafhorst AG & Co. $ 4,743,897.58 DM Vendor Financing on textile
equip. in Tlaxcala, Mexico
Xxxxxx Airtex GmbH $ 544,748.54 DM Vendor Financing on textile
equip. in Tlaxcala, Mexico
Xxxxxx Textilmaschinen $11,767,882.21 DM Vendor Financing on textile
equip. in Tlaxcala, Mexico
Xxxxxxx $ 494,780.00 USD Vendor Financing on textile
equip. in Tlaxcala, Mexico
Trutzschler GmbH & Co. $ 7,335,044.50 DM Vendor Financing on textile
equip. in Tlaxcala, Mexico
Termoelettronica S.P.A. $ 345,000.00 USD Vendor Financing on textile
equip. in Tlaxcala, Mexico
Xxxxxxxx/Fadis $ 1,278,781.91 EURO Vendor Financing on textile
equip. in Tlaxcala, Mexico
SCHEDULE 9.1 (f)
LITIGATION
SEE SCHEDULE 6.8
