Exhibit 10.23
AMENDMENT NO. 8 AND WAIVER TO
CREDIT AGREEMENT OF AMERICAN APPAREL
(USA), LLC
AMENDMENT NO. 8 AND WAIVER (this
“ Amendment ”) dated as of November 7,
2008, to the Credit Agreement dated as of January 18, 2007 (as
amended by that certain Amendment No. 1 and Waiver to Credit
Agreement of American Apparel, Inc. dated as of July 2, 2007,
that certain Amendment No. 2 and Waiver to Credit Agreement of
American Apparel, Inc. dated as of November 9, 2007, that
certain Amendment No. 3 and Waiver to Credit Agreement of
American Apparel, Inc. dated as of November 28, 2007, that
certain Amendment No. 4 and Waiver to Credit Agreement of
American Apparel, Inc., dated as of December 12, 2007, that
certain Amendment No. 5 and Waiver to Credit Agreement of
American Apparel (USA), LLC dated as of February 29, 2008,
that certain Amendment No. 6, Consent and Waiver to Credit
Agreement of American Apparel (USA), LLC dated as of May 15,
2008, and that certain Amendment No. 7 to Credit Agreement of
American Apparel (USA), LLC dated as of June 20, 2008, and as
further amended, supplemented, or modified from time to time, the
“ Credit Agreement ”) by and among American
Apparel (USA), LLC (successor by merger to American Apparel, Inc.),
a California limited liability company (the “ Borrower
”), the Facility Guarantors party thereto (the “
Facility Guarantors ”) and SOF Investments, L.P.
– Private IV, as lender (the “ Lender ”).
Capitalized terms used herein but not defined herein are used as
defined in the Credit Agreement.
WITNESSETH:
WHEREAS, the Borrower has requested
that the Lender (i) waive, as of September 30, 2008, any
Defaults or Events of Default arising out of the failure to comply
with paragraph (b) of Section 6.12 (Capital
Expenditures) of the Credit Agreement (the “ Capital
Expenditures Covenant ”) for the Fiscal Year ending
December 31, 2008 and (ii) amend the Credit Agreement as
set forth herein.
WHEREAS, the Lender agrees, subject
to the limitations and conditions set forth herein, (i) to
waive, as of September 30, 2008, any Defaults or Events of
Default arising out of the failure to comply with the Capital
Expenditures Covenant for the Fiscal Year ending December 31,
2008 and (ii) to amend the Credit Agreement as set forth
herein.
NOW, THEREFORE, in consideration of
the premises and the covenants and obligations contained herein,
the parties hereto agree as follows:
SECTION
1. WAIVER
Effective as of the Amendment
Effective Date, the Lender hereby waives, as of September 30,
2008, any Defaults or Events of Default arising out of the failure
to comply with the Capital Expenditures Covenant for the Fiscal
Year ending December 31, 2008; provided ,
however , that the waiver set forth in this paragraph shall
not constitute a consent or waiver with respect to any failure to
comply after September 30, 2008 with the Credit Agreement,
including Section 6.12(b) of the Credit Agreement (as amended
hereby).
SECTION
2. AMENDMENT TO
CREDIT AGREEMENT
Effective as of the Amendment
Effective Date, the Credit Agreement is hereby amended as of
September 30, 2008 as follows:
Amendment to Article VI
(Negative Covenants) . Section 6.12 (Capital
Expenditures) of the Credit Agreement is hereby amended by
deleting clause (b) thereof in its entirety and replacing it
with the following:
“(b) in excess of $74,000,000
in the aggregate for the Fiscal Year ending December 31,
2008.”
SECTION
3. CONDITIONS
PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT
This Amendment shall become
effective as of the date first written above when, and only when,
each of the following conditions precedent shall have been
satisfied or duly waived by the Lender (the date such conditions
precedent are satisfied or duly waived by the Lender being referred
to as the “ Amendment Effective Date
”):
A. Executed
Amendment . The Lender shall have received this Amendment, duly
executed by the Borrower, each Facility Guarantor and the Lender,
and dated the Amendment Effective Date, in form and substance
satisfactory to the Lender, which satisfaction shall be evidenced
by the execution and delivery by the Lender of this
Amendment.
B. Corporate and Other
Proceedings . All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with
the transactions contemplated by this Amendment shall be
satisfactory in all respects to the Lender, which satisfaction
shall be evidenced by the execution and delivery by the Lender of
this Amendment.
C. Representations and
Warranties . Each of the representations and warranties
contained in Section 4 (Representations and Warranties)
of this Amendment shall be true and correct.
D. No Default or Event
of Default . After giving effect to this Amendment, no Default
or Event of Default shall have occurred and be continuing as of the
date hereof.
E. Fees and Expenses
Paid . The Borrower shall have paid all Obligations due, after
giving effect to this Amendment, on or before the later of the date
hereof and the Amendment Effective Date including, without
limitation, the fees set forth in Section 5 (Fees and
Expenses) hereof (except as otherwise set forth therein) and
all costs and expenses of the Lender in connection with the
preparation, reproduction, execution and delivery of this Amendment
(including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Lender with respect
thereto) to the extent invoiced, and all other costs, expenses and
fees due under any Loan Document.
F. No Default or Event
of Default Under Existing First Lien Credit Agreement . After
giving effect to this Amendment, no default or event of default
shall have occurred and be continuing with respect to the Existing
First Lien Credit Agreement on the date hereof.
SECTION
4. REPRESENTATIONS
AND WARRANTIES
On and as of the date hereof and as
of the Amendment Effective Date, after giving effect to this
Amendment, the Borrower hereby represents and warrants to the
Lender as follows:
A. This Amendment has been
duly authorized, executed and delivered by the Borrower and each
Facility Guarantor and constitutes the legal, valid and binding
obligation of the Borrower and each Facility Guarantor, enforceable
against the Borrower and each Facility Guarantor in accordance with
its terms and the Credit Agreement as amended by this Amendment,
and constitutes the legal, valid and binding obligation of the
Borrower and each Facility Guarantor, enforceable against the
Borrower and each Facility Guarantor in accordance with its
terms.
B. Each of the
representations and warranties contained in Article III
(Representations and Warranties) of the Credit Agreement, the
other Loan Documents or otherwise made in writing in connection
therewith are true and correct in all material respects on and as
of the date hereof and the Amendment Effective Date, in each case
as if made on and as of such date except (i) to the extent
that such representations and warranties specifically relate to a
specific date, in which case such representations and warranties
shall be true and correct in all material respects as of such
specific date, and (ii) to the extent that such statement was
subsequently corrected and such
2
correction
