EXHIBIT 10.90.7
GMAC COMMERCIAL CREDIT LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
January 24, 2003
TARRANT APPAREL GROUP
TAG MEX, INC.
FASHION RESOURCE (TCL), INC.
UNITED APPAREL VENTURES, LLC
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Re: AMENDMENT TO CREDIT AGREEMENT
Gentlemen:
Reference is made to the Revolving Credit, Factoring and Security
Agreement, dated as of January 21, 2000, by and among Tarrant Apparel Group
("Tarrant"), Tag Mex, Inc. ("Tag"), Fashion Resource (TCL), Inc. ("Fashion"),
United Apparel Ventures, LLC ("United"; and together with Tarrant, Tag and
Fashion, each, individually, a "Borrower" and collectively, the "Borrowers") and
GMAC Commercial Credit LLC, as agent (as a lender and as successor in interest
to Finova Capital Corporation and Sanwa Bank California, the "Agent"), and the
Lenders from time to time parties thereto (as heretofore amended, and as the
same now exists or may hereafter be amended, restated, renewed, replaced,
substituted, supplemented, extended, or otherwise modified, the "Credit
Agreement"). Borrowers have requested that Agent make certain amendments to the
Credit Agreement and Agent has agreed to do so, subject to the terms and
provisions set forth herein, all as more particularly set forth below.
1. DEFINITIONS. All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to
such terms in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT. Effective as of the date of
this amendment, the Credit Agreement is hereby amended as
follows:
(a) Section 1.2 of the Credit Agreement is hereby amended by
adding the following definitions in the appropriate
alphabetical order:
""PKT RECEIVABLES" means each account of any Borrower arising
in the ordinary course of business from the sale of goods to
PKT, Inc., PROVIDED, THAT, each such account (i) is assigned
to Factor pursuant to Section 3 of this Agreement on or before
January 31, 2003, (ii) is on payment terms not exceeding sixty
(60) days from the original invoice date, including dating,
and (iii) is acceptable to Factor in its sole and absolute
discretion. Notwithstanding anything to the contrary set forth
herein, Borrowers and Factor hereby acknowledge, confirm and
agree
that Factor shall have neither the Credit Risk nor the risk of
non-payment for any other reason on any PKT Receivable.
"PKT RECEIVABLE SUPPLEMENTAL AVAILABILITY" means for the
period commencing on January 24, 2003 through and including
March 31, 2003, an amount equal to the aggregate net face
amount of all PKT Receivables outstanding from time to time
LESS Factor's commission thereon, PROVIDED, THAT, in no event
shall the PKT Receivable Supplemental Availability exceed Two
Million ($2,000,000) Dollars. Notwithstanding anything to the
contrary contained herein, Borrowers and Agent hereby
acknowledge, confirm and agree that on April 1, 2003 and at
all times thereafter the PKT Receivable Supplemental
Availability shall be equal to Zero ($0) Dollars.
(b) The definition of "Borrowing Base" appearing in Section 1.2 of
the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"Borrowing Base" means the sum of:
(a) up to ninety percent (90%) of the Factor Payments
Due, LESS reserves established by Agent from time to
time in its sole and absolute discretion (in addition
to, and not in limitation of the reserves established
by Agent pursuant to subsection (g) of this
definition); PLUS
(b) ninety percent (90%) of the balance due on Eligible
Receivables; PLUS
(c) the lesser of (i) fifty percent (50%) of the value of
Eligible Inventory located in the United States of
America or (ii) Twenty-Five Million ($25,000,000)
Dollars; PLUS
(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
(e) the Overadvance Limit; PLUS
(f) up to ninety percent (90%) of the PKT Receivable
Supplemental Availability; LESS
(g) reserves. Reserves shall mean an excess dilution
reserve in an amount equal to all amounts by which
Dilution of Receivables exceeds ten percent (10%),
rounded up to the nearest full percentage."
2
(c) The definition of "Factor Payments Due" appearing in Section
1.2 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
"FACTOR PAYMENTS DUE" means at any date all amounts payable by
Factor to Borrowers pursuant to Section 3.3 of this Agreement
as of such date, OTHER THAN amounts payable in connection with
PKT Receivables."
(d) The first sentence of Section 10.2 of the Credit Agreement is
hereby amended and restated in its entirety to read as
follows:
"Deliver to Agent (a) on or before Wednesday of each week as
and for the immediately prior week, Inventory reports, and (b)
on or before the fifteenth (15th) day of each month as and for
the immediately prior month (i) accounts receivable aging, and
(ii) accounts payable schedules, all of which reports, agings
and schedules shall be acceptable to Agent in its sole and
absolute discretion."
3. ACCOMMODATION FEE. In consideration of the accommodations set
forth herein, Borrowers acknowledge, confirm and agree that
Agent may charge and Borrowers shall pay an accommodation fee
in the amount of Twenty-five Thousand ($25,000) Dollars, which
accommodation fee shall be fully earned as of the date hereof,
shall not be subject to refund, rebate or proration for any
reason whatsoever, and may be charged by Agent to Borrowers as
of the date hereof.
4. CONDITION TO EFFECTIVENESS. The effectiveness of this
amendment and the agreement of Agent to the modifications and
amendments set forth in this amendment, are subject to the
fulfillment of the following conditions precedent:
(a) Agent shall have received all fees and other amounts
due and payable to Agent upon or prior to the
effectiveness of this amendment.
(b) Each of the representations and warranties made by
Borrowers in the Credit Agreement shall be true and
correct in all material respects on and as of the
date of this amendment; and
(c) No Event of Default shall have occurred and be
continuing on the date of this amendment, or would
exist after giving effect to the transactions
contemplated under this amendment.
3
5. NO OTHER MODIFICATIONS. Except as specifically set forth
herein, no other amendments, changes or modifications to the
Credit Agreement or the Other Documents are intended or
implied, and, in all other respects, the Credit Agreement and
the Other Documents shall continue to remain in full force and
effect in accordance with their terms as of the date hereof.
Except as specifically set forth herein, nothing contained
herein shall evidence a waiver or amendment by the Agent of
any other provisions of the Credit Agreement or the Other
Documents nor shall anything contained herein be construed as
a consent by the Agent to any transaction other than those
specifically consented to herein.
6. NO THIRD PARTY BENEFICIARIES. The terms and provisions of this
amendment shall be for the benefit of the parties hereto and
their respective successors and assigns; no other person,
firm, entity or corporation shall have any right, benefit or
interest under this amendment.
7. COUNTERPARTS. This amendment may be signed in counterparts,
each of which shall be an original and all of which taken
together constitute one amendment. In making proof of this
amendment, it shall not be necessary to produce or account for
more than one counterpart signed by the party to be charged.
8. MERGER. This amendment sets forth the entire agreement and
understanding of the parties with respect to the matters set
forth herein. This amendment cannot be changed, modified,
amended or terminated except in a writing executed by the
party to be charged.
Very truly yours,
GMAC COMMERCIAL CREDIT LLC
By:
-----------------------------------
Title:
--------------------------------
ACKNOWLEDGED AND AGREED:
TARRANT APPAREL GROUP
By: /S/ XXXXXXX XXXX
-----------------------
Xxxxxxx Xxxx
Title: CHIEF FINANCIAL OFFICER
TAG MEX, INC.
By: /S/ XXXXXXX XXXX
-----------------------
Xxxxxxx Xxxx
Title: CHIEF FINANCIAL OFFICER
[SIGNATURES CONTINUED ON NEXT PAGE]
4
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
FASHION RERSOURCE (TCL), INC.
By: /S/ XXXXXXX XXXX
-----------------------
Xxxxxxx Xxxx
Title: CHIEF FINANCIAL OFFICER
UNITED APPAREL VENTURES, LLC
By: /S XXXXXXX XXXXXX
------------------------
Title: Chief Financial Officer
5
LIMITED GUARANTY
TO: GMAC COMMERCIAL CREDIT LLC
Reference is made to the Revolving Credit, Factoring and Security
Agreement, dated as of January 21, 2000, by and among Tarrant Apparel Group
("Tarrant"), Tag Mex, Inc. ("Tag"), Fashion Resource (TCL), Inc. ("Fashion"),
United Apparel Ventures, LLC ("United"; and together with Tarrant, Tag and
Fashion, each, individually, a "Borrower" and collectively, the "Borrowers") and
GMAC Commercial Credit LLC, as agent (as a lender and as successor in interest
to Finova Capital Corporation and Sanwa Bank California, the "Company"), and the
Lenders from time to time parties thereto (as heretofore amended, and as the
same now exists or may hereafter be amended, restated, renewed, replaced,
substituted, supplemented, extended, or otherwise modified, the "Credit
Agreement"). The undersigned hereby guarantees to Company and its successors and
assigns, the prompt payment at maturity, or whenever they may become due in
accordance with any of their terms of all now existing and hereafter arising
liabilities, indebtedness and obligations of the Borrowers to the Company
(including "Obligations," as defined in the Credit Agreement), whenever and
however arising or acquired by the Company, whether arising before, during or
after the initial Term or any renewal Term of the Credit Agreement or after the
commencement of any case with respect to the undersigned or any Borrower under
the United States Bankruptcy Code or any similar statute (including, without
limitation, the payment of interest, fees and other amounts which would accrue
and become due but for the commencement of such case), whether direct or
indirect, absolute or contingent (collectively, the "Obligations") and whether
the same may now be or hereafter become due from any of the Borrowers or the
executors, administrators, successors or assigns of any of the Borrowers,
including the cost of protest and all legal expenses of or for collection, or
for realization upon any collateral for the Obligations ("Collateral") or other
guaranty. If this guaranty and/or any Obligation is placed with an attorney for
collection, the undersigned further agrees to pay an attorney's fee of fifteen
percent of any principal and interest due and demanded, which is hereby agreed
to be just and reasonable and which shall be recoverable with the amount due
under this guaranty.
Demand of payment, presentment, protest and notice of dishonor or
non-payment are hereby expressly waived, and if any of the Obligations are
payable on demand, the Company may, in its sole and absolute discretion,
determine the reasonableness of the period, if any, to 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, or any other provisions of the Obligations, may be extended,
changed or modified, the parties thereto discharged, any or all Collateral
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, 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,
6
any Collateral or by any failure to exercise, delay in the exercise, exercise or
waiver of, or forbearance or other indulgence with respect to, any right or
remedy available to the Company.
The Company may also at any time in its discretion sell, assign,
transfer and deliver the whole of the Collateral, or any part thereof, or any
substitute therefor, or any additions thereto, at public or private sale, at any
time or place selected by the Company, at such prices as it may deem best and
either for cash or for credit or future delivery, at the option of the Company,
without either demand, advertisement or notice of any kind to the undersigned,
which are hereby expressly waived.
The undersigned assigns, pledges and grants a security interest to the
Company in any money or property belonging to the undersigned at any time in the
possession of the Company or in the possession of any parent, affiliate or
subsidiary of the Company (hereinafter called a "Related Company"), including
any deposit balances and all property held by the Company or a Related Company
for any purpose including safekeeping, custody, transmission, collection, or
pledge, and all proceeds of the foregoing, as security for the performance by
the undersigned of the obligations under this guaranty, whether due or not, with
full power and authority to apply any such money, property and proceeds to the
extinguishment of any such obligations and to sell, enforce, collect or
otherwise realize on said money, property or proceeds in accordance with
applicable law.
The undersigned agrees that the Company is not to be obligated in any
manner to inquire into the powers of the Borrowers, or their successors, their
directors, officers, or agents, acting or purporting to act on their behalf, and
any liabilities purporting to be contracted for the Borrowers, or their
successors, by their directors, officers, or agents, in the professed exercise
of such powers, shall be deemed to form a part of the liabilities guaranteed
hereunder even though the incurrence of such liabilities be in excess of the
powers of the Borrowers, their successors, or their directors, officers, or
agents aforesaid, or shall be in any way irregular, defective or informal.
The liability of the undersigned on this guaranty shall be direct,
immediate, absolute, continuing, unconditional, unlimited and shall at all times
be valid and enforceable irrespective of any other agreements or circumstances
of any nature whatsoever which might otherwise constitute a defense hereto. Such
liability shall not be conditional or contingent upon the pursuit by the Company
of whatever remedies it may have against the Borrowers' successors, executors,
administrators or assigns, or the security 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 either made,
endorsed or contracted by the Borrowers, or any successor of the Borrowers,
prior to the receipt by the Company of written notice of the revocation of this
guaranty by the undersigned, and of all extensions or renewals thereof in whole
or in part and notwithstanding the death of, or the revocation of this guaranty
by, the undersigned guarantor, the liability of the guarantor so revoking and of
the estate of the guarantor who dies shall continue as to Obligations incurred
or contracted by the Borrowers, or any successor of the Borrowers, prior to such
revocation or death and as to all extensions and renewals thereof, in whole or
in part.
7
If any payment of the Obligations is made by or for the benefit of the
Borrowers and is repaid by the Company to the Borrowers or any other party
pursuant to any federal, state or other law, including those relating to
bankruptcy, insolvency, preference or fraudulent transfer, then to the extent of
such repayment, the liability of the undersigned with respect to such Obligation
shall continue in full force and effect. The undersigned agrees that if the
Company gives to the undersigned written notice of the institution of any action
or proceeding, legal or otherwise between the Company and any of the Borrowers,
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.
Until such time as the Obligations have been fully and indefeasibly
paid, the undersigned waives any claim or other right which the undersigned may
now have or hereafter acquire against any of the Borrowers or any other person
that is primarily or contingently liable on any obligation that arises from the
existence or performance of the undersigned's obligations under this guaranty,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification.
The undersigned also waives the right to assert in any action or
proceeding upon this guaranty any defenses, offsets or counterclaims which the
undersigned may now or hereafter have. This guaranty shall be governed by and
construed and interpreted in accordance with the laws of the State of New York
(without giving effect to New York law on conflicts of law). All actions and
proceedings arising out of or in connection with this guaranty, the Credit
Agreement and/or any transactions relating hereto and thereto, including,
without limitation, for recognition or enforcement of any judgment, may be
brought in the federal or state courts of the State of New York or, at the
Company's option, in any other courts as the Company may select and the
undersigned agrees that such courts are convenient forums and the undersigned
unconditionally and irrevocably submits, for the undersigned and its property,
to the nonexclusive personal jurisdiction of such courts. The undersigned agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. The undersigned additional hereby waives: (a) personal
service of process and consents that service of process upon the undersigned may
be made by certified or registered mail, return receipt requested, directly to
the undersigned at the address of the undersigned appearing below and service so
made shall be deemed completed two (2) days after the same shall have been so
mailed; (b) any claim that the undersigned is not personally subject to the
jurisdiction of the above named courts; and (c) notice of the acceptance of this
guaranty. This guaranty cannot be altered or discharged orally.
The continuing liability of the undersigned hereunder is in addition
to, and not in limitation of, the undersigned's liability under that certain
Guaranty date March 2, 2001 executed by the undersigned in favor of the Company.
THE UNDERSIGNED WAIVES THE RIGHT TO TRIAL BY JURY IN ALL ACTIONS
BROUGHT BY OR AGAINST THE COMPANY.
The continuing liability of the undersigned hereunder shall not exceed
the sum of (a) the lesser of: (i) Two Million ($2,000,000) Dollars or (ii) the
PKT Receivable Supplemental Availability (as defined in the Credit Agreement),
[PLUS (b) interest thereon at the Default Rate (as defined under the Credit
Agreement)] PLUS (c) any and all costs, fees and expenses of collection
hereunder, including without limitation, attorneys' fees and expenses. In
addition to and not in limitation of the foregoing, the Company shall have the
right to make demand upon the undersigned hereunder and the undersigned shall be
directly and unconditionally liable for and obligated to pay to the Company, the
gross face amount of any PKT Receivable that remains
8
unpaid for any reason longer than sixty (60) days after the original invoice
date of such PKT Receivable.
IN WITNESS WHEREOF, the undersigned has duly executed these presents
this 24th day of January, 2003.
/S/ XXXXXX XXXX
-----------------------------
XXXXXX XXXX
0000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
9
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
On this 24th day of January, 2003, before me personally appeared Xxxxxx
Xxxx to me known and known to me to be the individual described in and who
executed the foregoing instrument and that such individual duly acknowledged to
me that such individual executed same.
/S/ XXXXXXX XXXXX
--------------------------
Notary Public
