EXHIBIT 4(d)(4)
AMENDED AND RESTATED
ASSIGNMENT OF FACTORING PROCEEDS AGREEMENT
Texfi Industries, Inc., a Delaware corporation, (the "Borrower"), assigns
to BankBoston, N.A., a national banking association, (together with its
successors in such capacity, the "Agent") for the ratable benefit of the
financial institutions (the "Lenders") as are or may from time to time become
parties to that certain Loan and Security Agreement dated as of August 28, 1998
(together with any modifications, substitutions, supplements, amendments,
renewals or restatements thereof, the "Loan Agreement"), and grants to the
Agent, for its benefit and the benefit of the Lenders, a security interest in
all funds now or hereafter payable to the Borrower by The CIT Group/Commercial
Services, Inc. (the "Factor") pursuant to the factoring agreement annexed as
Exhibit A hereto (as at any time amended, the "Factoring Agreement") between the
Borrower and the Factor.
The Agent understands that the amount of funds, if any, that may be payable
at any time to the Borrower pursuant to the Factoring Agreement is uncertain.
Further, this Agreement is subject to and shall not affect any rights of the
Factor, under the terms and conditions of the Factoring Agreement or applicable
law, with respect to the right to "charge back" to the Borrower's account any
disputed invoices and other items and sums. Any credit balance shown on any
statement of account is provisional only and is subject to such charges.
The Borrower hereby authorizes the Factor, and the Factor agrees, to
provide to the Agent (i) copies of the monthly factoring statement plus interim
reports and such other information as the Agent may reasonably request from time
to time and (ii) a copy of the monthly detailed aging and such other information
pertaining to the factoring relationship as the Agent may reasonably request
from time to time.
The Borrower hereby directs the Factor to pay to the Agent, and the Factor
agrees to pay to the Agent, such funds as the Factor in its discretion
determines to be payable to the Borrower from time to time pursuant to the
Factoring Agreement. Such payment shall be for the account of the Borrower.
The Factor is hereby authorized to recognize the Agent's claim to rights
hereunder without investigating the reason for any action taken by the Agent or
the validity or the amount of obligations of the Borrower to the Agent and the
Lenders.
This Assignment cannot be terminated by the Borrower or the Factor but only
upon the Factor's receipt of a written termination notice from the Agent. Such
notice shall be sent by certified mail, return receipt requested to:
The CIT Group/Commercial Services, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Senior Vice President
Telecopy No. (000)000-0000
The following terms shall have the meanings ascribed to herein:
Account Debtor- any person who is or may become obligated under or on
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a Receivable.
Agent Senior Collateral - all Borrower's Property in which Agent has a
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Lien other than any such Property that constitutes Factor Senior Collateral.
Borrower Risk Factored Receivable - a Factored Receivable (or portion
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thereof) that is not a Factor Risk Factored Receivable.
Factor Risk Factored Receivable - a Factored Receivable (or a portion
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thereof) for which, pursuant to the Factoring Agreement, Factor bears the risk
of loss in the event of non-payment thereof.
Factor Senior Collateral - all of Borrower's now existing and
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hereafter created Receivables, that are Factored Receivables, all proceeds
thereof and all returned, reclaimed and repossessed goods relating thereto.
Factored Receivable - a Receivable factored by Borrower with Factor in
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accordance with and pursuant to the terms and provisions of the Factoring
Agreement.
House Receivable - a Receivable owned by the Borrower (a) the payment
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of which is secured or supported by a letter of credit, (b) is a Receivable
existing on the date hereof which Factor, in its discretion, elects not to
factor, or (c) which is a Receivable that has been reassigned by Factor to
Borrower pursuant to the Factoring Agreement.
Ledger Debt - any sums owing to the Factor arising from the Borrower's
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purchases from other clients of Factor.
Lien - any interest in Property securing an obligation owed to, or a
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claim by, a person other than the owner of the Property, whether such interest
is based on common law, statute, judicial order or contract.
Property - any interest in any kind of property or asset, whether
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real, personal or mixed, or tangible or intangible.
Receivable - all rights of Borrower to payment for goods sold or
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leased or services rendered whether constituting an account, contract right,
chattel paper, general intangible or instrument.
Until this Assignment is terminated pursuant to the preceding paragraph,
the Borrower and Factor agree that, notwithstanding anything contained to the
contrary in the Factoring Agreement or any other document, all of Borrower`s
Receivables arising from and after date hereof, with the sole exception of the
House Receivables, shall be factored with and assigned to the Factor and such
other institution or institutions which may factor the Borrower`s Receivables,
in accordance with the Factoring Agreement and agreements with the other
institution who may factor the Borrower`s Receivables. Borrower and Factor
further agree that not less than 2/3 of the amount of all of Borrower`s Factored
Receivables, arising from and after
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date hereof, shall be factored with and/or assigned to Factor, with the
remaining 1/3 with the other institution or institutions which may factor the
Borrower`s Receivables.
The Factor shall remit to the Agent, for application by Agent in accordance
with the Loan Agreement, all monies due or to become due to the Borrower under
the Factoring Agreement, including, without limitation, all sums payable by the
Factor in connection with its purchase of any Receivables regardless of whether
or not any such Receivables are Borrower Risk Factored Receivables or Factor
Risk Factored Receivables provided that the Factor may deduct from or offset
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against any proceeds of a Factored Receivable the commission, fees and
collections expenses attributable thereto and may apply any proceeds of Factor
Risk Factored Receivables to the unpaid balance of any Factor Risk Factored
Receivable that is properly charged back to the Borrower pursuant to the
Factoring Agreement as well as any collection expenses attributable to such
unpaid Factor Risk Factored Receivable. Notwithstanding anything to the
contrary in the Factoring Agreement, the Factor shall not deduct from or offset
against any amounts otherwise payable under the Factoring Agreement any Ledger
Debt, provided that the foregoing shall not prohibit the Factor from receiving,
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or the Borrower from paying by direct remittance to the Factor, any sums with
respect to such Ledger Debt from time to time in accordance with the prior
course of conduct between the Borrower and the Factor. If the Factor shall
receive any payment, distribution or other recovery of Property in respect of
any Factored Receivables (i) in any bankruptcy or other insolvency proceeding of
any Account Debtor or (ii) as a result of any litigation or threatened
litigation against any Account Debtor after such Factored Receivables are turned
over to an attorney for collection, such payment, distribution or other recovery
shall be shared between the Factor and the Agent ratably based upon the portion
of the Factored Receivables on account of which such payment, distribution or
other recovery is made that constitutes Factor Risk Factored Receivables and the
portion that constitutes Borrower Risk Factored Receivables.
With respect to Borrower`s Receivables which constitute House Receivables,
such House Receivables will not be factored by Factor. Any collections which
Factor may receive from the House Receivables shall be remitted by the Factor to
the Agent for application by Agent in accordance with the Loan Agreement.
Borrower further agrees that notwithstanding anything contained in the
Factoring Agreement, it will not (i) borrow from or obtain any loan, secured or
unsecured, from the Factor, nor take any advance or anticipated payment against
any monies due under the Factoring Agreement, (ii) have the Factor guarantee any
amount due or to become due from the Borrower to any third party other than
Ledger Debt, or (iii) have the Factor open any letters of credit on behalf of
the Borrower. The Factor agrees that it will not extend any such accommodations
to the Borrower. The Factor further agrees not to amend the Factoring Agreement
(except for changes in commission) without the Agent`s prior consent, and
warrants that the Factoring Agreement attached hereto as Exhibit B comprises the
entire Factoring Agreement on the date of this Assignment.
The Factor agrees to notify the Agent in writing of the sending by the
Factor to the Borrower of any notice of termination of the Factoring Agreement.
Such notice shall be sent by certified mail, return receipt requested to:
BankBoston, N.A.
Suite 800
3
000 Xxxxxxxx Xxxxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx
Telecopy No.. (000) 000-0000
The terms of this Agreement may not be altered except by a written
agreement signed by the Borrower, the Factor and the Agent.
The Agent warrants and represents to the Factor that it holds a first
priority perfected security interest in the collected funds assigned hereunder
for itself and the ratable benefit of Lenders and that the Agent is entitled to
receive all amounts otherwise available to the Borrower pursuant to the
Factoring Agreement. The Agent hereby agrees to indemnify and to hold the
Factor harmless from any and all liability or expense which may be incurred by
reason of the Factor's recognition of the assignment and security interest
herein contained and its remittances to the Agent as herein provided. This
indemnity shall survive termination of this Agreement.
The Agent agrees that any interest that it may have in the Factor Senior
Collateral shall be and hereby is made junior and subordinate to the interest of
the Factor therein. The Agent agrees that its subordination hereunder shall
survive termination of this Agreement and shall remain in full force and effect
until all obligations of the Borrower to the Factor under the Factoring
Agreement have been satisfied in full. The Agent further agrees that until all
of the obligations of the Borrower to the Factor have been satisfied in full, it
will not enforce its security interest in the Factor Senior Collateral, nor will
it attach, levy upon, execute against, exercise any rights, assert any claim or
take any action or institute any proceedings with respect thereto except for
collection efforts with regard to Borrower Risk Receivables.
The Factor agrees that any security interest that it may have in the Agent
Senior Collateral shall be and hereby is junior and subordinate to the interest
of the Agent therein. The Factor agrees that its subordination hereunder shall
survive termination of this Agreement and shall remain in full force and effect
until all obligations of the Borrower to the Agent and the Lenders under the
Loan Agreement have been satisfied in full. The Factor further agrees that
until all of the obligations of the Borrower to the Agent and the Lenders under
the Loan Agreement have been satisfied in full, it will not enforce its security
interest in the Agent Senior Collateral, nor will it attach, levy upon, execute
against, exercise any rights, assert any claim or take any action or institute
any proceedings with respect thereto. Upon the request of Borrower and with the
written consent of the Agent, the Factor may, at its option, attempt to collect
the House Receivables. Subject to the payment of all fees and collection
expenses Factor will remit all such collections to the Agent.
The subordination and relative priority agreements set forth herein are
expressly conditioned on the non-avoidability and perfection of the interest to
which another interest is subordinated and if the interest to which another
interest is subordinated is not perfected or is voidable for any reason, then
the subordination provided for herein shall not be effective as to that
particular property.
The validity, interpretation and enforcement of this Agreement shall be
governed by the laws of the State of Georgia. This Agreement shall bind the
parties and their respective
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successors and assigns. This Agreement is for the benefit of the Factor, the
Agent and the Lenders only and their respective successors and assigns.
This Agreement (the "Amended and Restated Assignment of Factoring
Proceeds") replaces in its entirety that Assignment of Factoring Proceeds
Agreement dated as of August 28, 1998 between Borrower, Factor and Agent, as
amended, modified, supplemented or extended.
This Agreement may be executed in counterparts, each of which when so
executed, shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the 28 day of December, 1999.
TEXFI INDUSTRIES, INC.,
Borrower
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: EVP & CFO
Accepted and Agreed:
BANKBOSTON, N.A., as Agent
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Authorized Officer
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: SVP
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