EXHIBIT 10.65
AMENDED AND RESTATED
TRADE FINANCING AGREEMENT
SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT
[SECURITY AGREEMENT]
As of: June 1, 1997
Congress Financial Corporation (Southwest)
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Gentlemen:
This Amended and Restated Trade Financing Agreement ("Supplement"),
dated as of June 1, 1997, between us, is an amendment and restatement of the
Trade Financing Agreement, dated August 2, 1990, between you and Farah U.S.A.,
and is a supplement to the Amended and Restated Accounts Financing Agreement
[Security Agreement] between you and Farah U.S.A., Inc., Value Clothing Company,
Inc. and Farah Manufacturing (U.K.) Limited dated of even date herewith (the
"Agreement"). This Supplement is (a) hereby incorporated into the Agreement, (b)
made a part thereof and (c) subject to the other terms, conditions, covenants
and warranties thereof. All terms, including capitalized terms, used herein
shall have the meanings ascribed to them respectively in the Agreement, unless
otherwise defined in this Supplement.
This Supplement will confirm the terms and conditions upon which you
may, from time to time in your sole discretion, assist us in establishing or
opening foreign or domestic letters of credit and extend other financial
accommodations for our account. Accordingly, each of us hereby agrees as
follows:
Section 1. CREDIT ACCOMMODATIONS
1.1. You may, in your sole discretion, from time to time, for our
account, at our request, provide one or more of the following financial
accommodations to us or our designee(s): (a) issue, open, or cause the issuance
or opening of letters of credit or purchase or other guaranties for the purchase
of goods and services in the ordinary course of our or any such designer's
business or for any other purpose approved by you, (b) assist us in establishing
or opening letters of credit for such purposes by indemnifying the issuer
thereof or guaranteeing our payment or performance to such issuer in connection
therewith, (c) make payments for our or such designee's account in connection
with such purchases and/or (d) issue or guarantee drafts and acceptances
relating to the foregoing or otherwise. All such letters of credit or purchase
or other guaranties and other financial accommodations are referred to herein
individually as a "Credit" and collectively as "Credits".
1.2. The opening or issuance of any Credit shall at all times and in
all respects be in your sole reasonable discretion. The amount and extent of any
Credit and the terms, conditions and provisions thereof shall in all respects be
determined solely by you and shall be subject to change, modification and
revision by you, in your sole discretion, at any time and from time to time. The
maturity of each Credit shall not exceed one hundred and eighty (180) days after
opening or issuance, except in your sole reasonable discretion and except for
certain standby Credits.
1.3. Our loan availability under the Agreement and any other
Supplements thereto shall be reduced by the amount of all outstanding Credits or
such lesser amount as you may elect in your discretion.
1.4. Our Obligations to you under all outstanding Credits shall be secured
by all Collateral in which you are now or hereafter granted a security interest
by us or any guarantor.
1.5. Except in your sole discretion, the amount of all Credits and all
other commitments and obligations made or incurred by you for our account in
connection therewith shall not exceed $7,000,000 in the aggregate at any time
outstanding; and such Credits and commitments, when combined with the sums
outstanding under the Agreement and the other Supplements, shall not exceed, at
any one time, the Maximum Credit.
1.6. All indebtedness, liabilities, expenses and obligations of any
kind paid, arising or incurred by you in connection with this Supplement, any
Credit or any documents, drafts and acceptances thereunder, whether present or
future, whether arising or incurred before or after termination or nonrenewal of
this Agreement shall be incurred solely as an accommodation to us and for our
account and constitute part of the Obligations, including without limitation:
(a) all amounts due or which may become due under any Credit or any drafts or
acceptances thereunder; (b) all amounts charged or chargeable to you or us by
any bank or other issuer of any Credit or any correspondent which opens, issues
or is otherwise involved with any Credit, including without limitation, all
fees, expenses and commissions; (c) your fees, expenses and commissions; (d)
duties, freight, terms, costs, insurance and all such other charges and expenses
which may pertain directly or indirectly to any Obligations or to the Credits or
goods or documents relating thereto; and (e) all other indebtedness and
obligations owed by us to you pursuant to, in connection with or arising from
this Supplement, the Credits or any drafts or acceptances relating thereto.
1.7. All such Obligations shall accrue interest at the rate provided
for in the Agreement, commencing on the date any payment is made, or obligations
incurred, by you and all such Obligations shall, together with interest thereon
and other sums owed by us to you hereunder, be payable and evidenced as provided
in the Agreement.
1.8. In addition to all other fees, charges and expenses payable under
the Agreement, this Supplement, and to any bank or other issuer or correspondent
in connection with any Credit, we agree to pay to you the following commissions
for your services hereunder, which shall be due and payable on the opening or
issuance of each Credit or, if the original term is extended, on the extension
thereof: (a) a charge of one-sixth percent (1/6%) of the face amount of any
Credit (other than drafts or acceptances) for each thirty (30) day period, or
any portion thereof, of the original term or any extension thereof and (b) in
addition to any bank charges, a charge for each thirty (30) day period, or any
portion thereof, of the original or any extended term of any outstanding drafts
or acceptances equal to one-sixth percent (1/6%) of the face amount thereof. We
also agree to pay to you, your and any bank's, other issuer's or correspondent's
customary charges for amendments, extensions and administration relating to any
Credit, which charges shall be due and payable on the first day of the month
following the date of incurrence and, at your option may be charged to any of
our account(s) maintained by you.
1.9. Nothing contained herein shall be deemed or construed to grant us
any right, power or authority to pledge your credit in any manner. You shall
have no liability of any kind with respect to any Credit opened or issued by a
bank or other issuer or any draft or acceptance with respect thereto unless and
until you shall have first duly executed and delivered your guarantee or
indemnification in writing with respect thereto, as provided herein.
Section 2. ADDITIONAL SECURITY INTEREST
2.1. As additional security for the prompt performance, observance and
payment in full of all Obligations, we hereby grant to you a continuing security
interest in, a lien upon, and a right to set off against, and we hereby assign,
transfer, pledge and set over to you all of the following property acquired by
us in connection with any Credit or otherwise owned by us, whether now owned or
hereafter acquired (which, is and shall be deemed a part of the Collateral as
defined and used in the Agreement): (a) all raw materials, work-in-process,
Finished Goods and all other inventory and goods of whatsoever kind or nature,
wherever located, including inventory or goods in transit ("Inventory"),
including, without limitation, all wrapping, packaging, advertising and shipping
materials, and all other goods consumed in our business, all labels and other
devices, names or marks affixed or to be affixed thereto for purposes of selling
or of identifying the same or the seller or manufacturer thereof and all of our
right, title and interest therein and thereto; (b) documents of payment,
transport and title or the equivalent thereof, including, without limitation,
original contracts, orders, invoices, checks, drafts, notes, letters of credit,
documents, warehouse receipts, bills of lading, shipping receipts, dock
receipts, delivery tickets and documents made available to us for the purpose of
ultimate sale or exchange of Inventory or for the purpose of loading, unloading,
storing, shipping, transshipping, manufacturing, processing or otherwise dealing
with Inventory in a manner preliminary to their sale or exchange; (c) all books,
records, other property and general intangibles relating to the foregoing; and
(d) all products and proceeds 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.
2.2. You may, on or after occurrence of any Event of Default, exercise
any or all of your rights of ownership, including the rights of possession and
sale or other disposition, with or without notice to us, without liability to
you and entirely at our expenses and without relieving us from any Obligations.
Section 3. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
We hereby represent, warrant and covenant to you the following (which
shall survive the execution and delivery of this Supplement), the truth and
accuracy of which, or compliance with, being a continuing condition of the
making of loans by you under the Agreement or any supplement thereto and the
extension by you of each Credit and other financial accommodations pursuant
hereto:
3.1. All sales of any Inventory shall be made by us only in the
ordinary course of business and the Accounts arising from such sales and
proceeds thereof shall be and are hereby transferred and assigned to you and we
confirm that your lien and security interest extends and attaches to those
Accounts and proceeds.
3.2. Except as you may otherwise specifically consent in writing prior
to the opening or issuance of any Credit, all Credits shall be opened or issued
to cover the actual purchase and delivery of Inventory solely for our account or
in connection with our workers compensation, automobile or liability insurance.
3.3. All shipments made under any Credit are in accordance with the
governmental laws and regulations of the countries in which the shipments
originate and terminate, and are not prohibited by any such laws and
regulations.
3.4. We assume all risk, liability and responsibility for, and agree to
pay and discharge, all present and future local, state, federal or foreign
taxes, duties, or levies relating to the Credits. Any embargo, restriction,
laws, customs or regulations of any country, state, city, or other political
subdivision, where the Collateral is or may be located, or wherein payments are
to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall
be solely our risk, liability and responsibility as between you and us.
3.5. All documents, instruments, notices and statements relating to any
Credit and/or the Collateral, if any, shall at your request, be promptly
delivered to you.
3.6. We shall procure promptly, or cause to be procured, any necessary
licenses for the shipping of goods and comply or cause any drawer under, or
beneficiary of, any Credit (or any transferee or assignee thereof), to comply
with all foreign and domestic governmental laws and regulations in regard to the
shipping of the Inventory, the financing thereof or payment therefor, including
governmental laws and regulations pertaining to transactions involving
designated foreign countries or their nationals and to furnish such certificates
in that respect as you or any bank or other issuer or correspondent may at any
time require.
3.7. The only locations of any Collateral are those addresses listed on
Exhibit A annexed hereto and made a part hereof. Exhibit A sets forth the owner
and/or operator of the premises at such addresses, for all locations which we do
not own and operate and all mortgages, if any, with respect to the premises. We
shall not remove any Collateral from such locations, without your prior written
consent, except for sales of Inventory in the ordinary course of business.
3.8. We shall at all times maintain, with financially sound and
reputable insurers, casualty and hazard insurance with respect to the Collateral
for not less than its full market value and against all risks to which it may be
exposed except to the extent we are presently self-insured for losses up to
$250,000. All such insurance policies shall be in such form, substance, amounts
and coverage as may be satisfactory to you and shall provide for 30 days'
minimum prior cancellation notice in writing to you. You may act as attorney for
us in obtaining, adjusting, settling, amending and canceling such insurance. We
shall promptly (a) obtain endorsements to all existing and future insurance
policies with respect to the Collateral specifying that the proceeds of such
insurance shall be payable to you as your interests may appear and further
specifying that you shall be paid regardless of any act, omission or breach of
warranty by us, (b) deliver to you an original executed copy of, or executed
certificate of the insurance carrier with respect to, such endorsement and, at
your request, the original or a certified duplicate copy of the underlying
insurance policy and (c) deliver to you such other evidence which is
satisfactory to you of compliance with the provisions hereof.
3.9. We shall promptly notify you in writing of the details of any
material loss, damage, investigation, action, suit, proceeding or claim relating
to the Collateral or which would result in any material adverse change in our
business, assets, goodwill or condition, financial or otherwise.
3.10. At your option, you may apply any insurance monies received at
any time to the cost of repairs to or replacement for the Inventory and/or to
payment of any of the Obligations, whether or not due, in any order and in such
manner as you, in your sole discretion, may determine.
3.11. Upon your request (on or after the occurrence of an Event of
Default), at any time and from time to time, but in no event prior to the
occurrence of an Event of Default more than once in any twelve (12) month
period, we shall, at our sole cost and expense, execute and deliver to you
written reports or appraisals as to the Inventory listing all locations, items
and categories thereof, describing the condition of same and setting forth the
lower of cost or fair market value thereof, in such form as is satisfactory to
you.
3.12. We shall (a) use, store and maintain the Inventory with all
reasonable care and caution and (b) use the Inventory for lawful purposes only
and in conformity with applicable laws, ordinances, regulations and insurance
policies.
3.13. We assume all responsibility and liability arising from or
relating to the use, sale or other disposition of the Inventory and other
Collateral as between you and us.
Section 4. INDEMNIFICATION AND RELEASE.
4.1. We shall and do hereby indemnify you and hold you harmless from
and against, and agree to pay you or demand the amount of, any and all losses,
costs, claims, demands, causes of action, liabilities or expenses (collectively,
"Liabilities") which you may suffer or incur whether pursuant to negligence or
otherwise arising from or in connection with any transactions or occurrences
relating to any Credit, the Collateral and any documents, drafts or acceptances
thereunder or relating thereto, including, but not limited to, Liabilities due
to any action taken by any bank or other issuer or correspondent with respect to
any Credit. Notwithstanding anything to the contrary contained herein, if you
become liable to us hereunder we shall not be required to indemnify you pursuant
to this Section 4. We further agree to and do hereby release and hold you
harmless for any acts, waivers, errors, delays or omissions, whether caused by
you, by any bank or other issuer or correspondent or otherwise with respect to
or relating to any Credit. Our unconditional obligation to you hereunder shall
not be modified or diminished for any reason or in any manner whatsoever, except
for your willful misconduct or gross negligence. Any fees, commissions or other
charges made to you with respect to any Credit or other Obligations by any bank
or other issuer or correspondent thereof shall be conclusive and may be charged
by you to any of our account(s) maintained by you.
4.2. We assume all risk, loss, liabilities, charges and expenses with
respect to the acts or omissions of the drawer under or beneficiary for any
assignee or transferee thereof as between you or us.
4.3. If any Credit provides that payment is to be made by any bank,
other issuer or correspondent, you shall not be responsible for the failure of
any of the documents specified in any Credit to come into your possession or for
any delay in connection therewith, and our obligation to make reimbursement
shall not be affected by such failure or delay in the receipt by you of any such
documents.
4.4. We agree that any action taken by you, or any action taken by any
bank or other issuer or correspondent under or in connection with any Credit,
the Collateral and any documents, drafts or acceptances thereunder, shall,
notwithstanding any judgment or instructions we may or may not express to the
contrary or inconsistent therewith, be conclusive and binding on us and shall
not create any resulting liability to you, except for your own willful
misconduct or gross negligence. In furtherance thereof, you shall have the full
and sole right and authority to: (a) clear and resolve any questions of
non-compliance of documents; (b) give any instructions as to acceptance or
rejection of any documents or goods; (c) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders; (d) grant any
extensions of the maturity of, time of payment for, or time of presentation of,
any drafts, acceptances, or documents; and (e) agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the
terms or conditions of any of the applications, Credits, or documents, drafts or
acceptances thereunder or any letters of credit included in the Collateral; all
in your sole name, and any bank or other issuer or correspondent shall be
entitled to comply with and honor any and all such documents or instruments
executed by or received solely from you, all without any notice to or any
consent from us.
4.5. Without your express consent and endorsement in writing, we agree
not to: (a) approve or resolve any questions of non-compliance of documents; (b)
give any instructions as to acceptance or rejection of any documents or goods;
(c) execute any and all applications for steamship or airway guaranties,
indemnities or delivery orders; (d) grant any extensions of the maturity of,
time of payment for, or time of presentation of, any drafts, acceptances or
documents; or (e) agree to any amendments, renewals, extensions, modifications,
changes or cancellations of any of the terms or conditions of any of the
applications, Credits, or documents, drafts or acceptances thereunder.
4.6. Any rights, remedies, duties or obligations granted or undertaken
by us to any bank or other issuer or correspondent in any application for any
Credit, or any outstanding agreement relating to the opening or issuance of any
Credit or acceptances or otherwise, shall be deemed to have been granted to you
and apply in all respects to you and shall be in addition to any rights,
remedies, duties or obligations contained herein.
4.7. Any duties or obligations undertaken by you to any bank or other
issuer or correspondent in any application for or in connection with any Credit,
including any outstanding agreement relating to the opening or issuance of any
Credit or otherwise, shall be deemed to have been undertaken by us and apply in
all respects to us and shall be in addition to the duties or obligations
contained herein.
Section 5. ADDITIONAL REMEDIES.
Upon the occurrence of any Event of Default and at any time thereafter,
you shall have the right (in addition to any other rights you may have under the
Agreement, this Supplement or otherwise), without notice to us, at any time and
from time to time, in your discretion, with or without judicial process or the
aid or assistance of others and without cost to you:
5.1. To enter upon any premises on or in which any of the Inventory may be
located and, without resistance or interference by us, take possession of the
Inventory;
5.2. To complete processing, manufacturing, repair and shipment to
customers of all or any portion of the Inventory;
5.3. To sell, foreclose or otherwise dispose of any part or all of the
Inventory on or in any of our premises or premises of any other party;
5.4. To require us, at our expense, to assemble and make available to you
any part or all of the Inventory at any place and time designated by you;
5.5. To remove any or all of the Inventory from any premises on or in which
the same may be located, for the purpose of effecting the sale, foreclosure or
other disposition thereof or for any other lawful purpose (and if any of the
Inventory consists of motor vehicles, you may use our registrations and license
plates).
IN WITNESS WHEREOF, we have caused these presents to be duly executed
as of the 1st day of June, 1997.
FARAH U.S.A., INC.
VALUE CLOTHING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
FARAH MANUFACTURING (U.K.) LIMITED
By: /s/ Xxxxxxx X. Page
Title: Director
ACCEPTED:
CONGRESS FINANCIAL CORPORATION (SOUTHWEST)
By: /s/ Xxxx Xxxxxxx, Xx.
Title: Vice President