COMMODORE FACTORS CORP.
0000 XXXXXXXX XXX XXXX, X.X.
AMENDMENT TO FACTORING AGREEMENT
Retrospettiva, Inc.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Gentlemen:
The following is an amendment to the factoring agreement executed on 12/23/97
by and between Commodore Factors Corp. (the "Factor) and Retrospettiva, Inc.
(the "Client"), (the "Agreement"). In each numbered item the paragraph entitled
Amendment will replace or amend the verbiage in the sections entitled
Agreement immediately preceding them.
1. The following relates to the last sentence of paragraph 1 of the Agreement.
Agreement: During the term of this Agreement you shall not sell, negotiate,
pledge, assign or grant any security interest in any Receivables
of yours to anyone other than us.
Amendment: During the term of this Agreement, it is understood by the
Factor that the Client has an existing credit facility with
another lender and that the lender has a senior perfected
security interest (UCC-1 filing) on: "All Accounts, Chattel
Paper, Contract Rights, Inventory, Equipment, Fixtures,
General Intangibles, Deposit Accounts, Documents and
Instruments of Debtor, howsoever arising, whether now owned or
existing or hererafter acquired or arising, and wherever
located; together with all parts thereof (including spare
parts), all accessories and accessions thereto, all books and
records (including computer records) directly related thereto,
and all proceeds thereof (including, without limitation,
proceeds in the form of Accounts and Insurance proceeds." The
Client agrees to execute the following agreements with and on
behalf of the Factor and lender; (1) Parity agreement -
whereby the lender agrees to file an amendment to their UCC-1
filing indicating that they agree to subordinate their senior
position as to Accounts and the proceeds therefrom arising
from sales utilizing the label, X.X. Xxxx, Inc. and any
tradenames related to X.X. Xxxx, Inc., including but not
limited to 'Xxxx Xxxxxxx by X.X. Xxxx'. (2) Factor UCC-1 -
whereby the Factor agrees to file a UCC-1 filing and accept a
junior position to all Accounts and the proceeds therefrom
except those arising from the sales utilizing the label, X.X.
Xxxx, Inc. and any tradenames related to X.X. Xxxx, Inc.,
including but not limited to "Xxxx Xxxxxxx by X.X. Xxxx".
2. The following relates to paragraph 6(d) of the Agreement.
Agreement: (plus a charge of $600.00 per person per day for our
examiners...)
Amendment: (plus a charge of $600.00 per person per day for our
examiners, except that the Client will only be obligated to
pay a maximum of $1,200 in any
Commodore Factors Corp. - Retrospettiva, Inc.
Amendment to Factoring Agreement
Page 1 of 3
one 365 day period for audits or examinations requested by the
Factor.) The Factor acknowledges that the Client is a public
company and as such undergoes periodic certified audits and
the Client will submit those audits upon completion within a
reasonable period of time to the Factor.
3. The following relates to paragraph 7(b) of the Agreement.
Agreement. ..... that you have paid and shall pay all taxes which have
become or shall hereafter become due and payable....
Amendment: Any failure to pay taxes when due to a dispute with any
governmental taxing authority or due to a reasonable
underestimate of taxes due as a direct result of the order of
magnitude of the increase of the Clients business volume shall
not create an Event of Default as further set forth in item 17
of the Agreement.
4. The following relates to paragraph 7(c) of the Agreement.
Agreement: ....shall not be any judgments, assessments or liens filed
against you or against any of your property.
Amendment: ....shall not be any judgments, assessments or liens filed
against you or against any of your property except that the
Factor acknowledges the existence of a prior perfected senior
position as further set forth in the amendment of paragraph 1
of the agreement and that from time to time, due to a
reasonable dispute with taxing authorities that it is possible
that there may be an assessment due either to a breakdown in
paper flow at that authority or an assessment made due to a
reasonable error on the part of the Client as to the estimate
of taxes due or interest and penalties that the Client was not
and or could not have been previously aware of. The Factor
also further acknowledges that from time to time it is not
unusual for a client to be the subject of lawsuits in the
normal course of business and whether material or not, to the
extent that there continues to be sufficient collateral to
support the Clients loan due to Factor, this event, and any
and all of the other events noted above shall not in any way
trigger or be construed to be an Event of Default as further
set forth in paragraph 17 of the Agreement.
5. The following relates to paragraph 7(g) of the Agreement.
Agreement: that your transfers and assignments to us are free and clear
of all encumbrances, liens and security interest and that you
have full title in and to all Receivables.
Amendment: that your transfers and assignments to us are free and clear
of all encumbrances, liens and security interest and that you
have full title in and to all Receivables except that the
Factor acknowledges the existence of a prior perfected senior
position as further set forth in the amendment of paragraph 1
of the agreement.
6. The following relates to paragraph 15 of the Agreement.
Agreement: The minimum aggregate factoring commission payable under this
agreement for each contract year shall be S20,000.. ..
Commodore Factors Corp. - Retrospettiva, Inc.
Amendment to Factoring Agreement
Page 2 of 3
Amendment: There shall be no minimum aggregate factoring commission
payable under this agreement. The Factor acknowledges that
from time to time there may be a receivable(s) on which there
may be additional terms or a change in terms. In that event
the Factor agrees to accept those terms and conditions to the
extent that they are reasonable and usual as to industry
custom, the Factor will assess a charge to Client based on the
formula set forth herein.
7. The following relates to paragraph 16(b) of the Agreement.
Agreement: In the event of your early termination of this agreement,
whether by virtue of a default hereunder or at your election
as set forth herein above, you agree to pay us in cash or
other immediately available funds, and in addition to all
other obligations, an early termination fee as and for
liquidated damages resulting from such early termination in an
amount equal to the greater of the minimum commission as set
forth in paragraph "15" hereof reduced by any commission
already paid during the contract year .....
Amendment: In the event of your early termination of this agreement,
whether by virtue of a default hereunder or at your election
as set forth herein above, you, the Client, will not be
obligated to pay nor be assessed an early termination fee.
There will be no early termination fee required by the Factor
to be paid by the Client under any circumstances.
ACCEPTED AND AGREED:
COMMODORE FACTORS CORP.
By: /s/ Illegible Date: 1/17/98
---------------------------- -----------------------------------
RETROSPETTIVA
By: /s/ Illegible Date: 12/23/97
---------------------------- -----------------------------------
COMMODORE FACTORS CORP. - RETROSPETTIVA, INC.
AMENDMENT TO FACTORING AGREEMENT
Page 3 of 3
COMMODORE FACTORS CORP.
0000 XXXXXXXX XXX XXXX N.Y.
FACTORING AGREEMENT
New York, NY 12/23, 1997
Retrospettiva, Inc.
0000 Xxxx Xxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Gentlemen:
Upon your written acceptance, to be noted at the foot of this instrument,
the following shall constitute the entire agreement except as amended on
12/23/97 and understanding between us pursuant to which you hereby appoint us
your sole factor on the following basis:
1. You agree to, and do hereby, sell and assign to us all of your right
title and interest in and to certain of your accounts receivable, notes,
bills, acceptances, contract rights and other forms of obligation (as herein
defined) and all security and guarantees therefore (herein collectively termed
"Receivables") arising out of all of your sales of goods or rendition of
services whether now existing or hereinafter created, together with title to
any merchandise represented by such Receivables which may be rejected or
returned by your customer for any reason whatsoever, also to all of the rights
under insurance policies covering merchandise or services and all of your
rights against carriers of such merchandise. During the term of this Agreement
you shall not sell, negotiate, pledge, assign or grant any security interest
in any Receivables of yours to anyone other than us.
2. Except as hereinafter set forth, we agree to purchase your
Receivables without recourse to you, provided that the sale of the merchandise
represented by the Receivables and the terms thereof have first been approved by
us in writing (such approval being sometimes referred to herein as "Credit
Approval"), and provided further that the merchandise represented by the
Receivables is duly delivered to and finally accepted and retained by your
customer without dispute, whether bona fide or not, as to price, terms of sale,
delivery, quantity, quality, counterclaim or offset or otherwise (whether or
not such claim, dispute, counterclaim or offset relates to the specific
Receivable). We reserve the right to revoke our Credit Approval at any time
prior to delivery to and acceptance by your customer. We shall be entitled to
collect and receive all proceeds of your sales and shall enjoy all the
rights and remedies of the seller of goods, including the right of stoppage in
transit, reclamation, replevin and any similar rights or remedies as may be
available to you. (Our Credit Approval numbers shall be valid for a period of
30 days from the date of such Credit Approval number or until 30 days after
the delivery date set forth in our approval sheet unless revoked by us.
Notwithstanding the foregoing, our Credit Approval shall not be valid for any
shipment assigned to us on an assignment schedule more than thirty (30) days
after the date of invoice. We shall not be liable in any manner for refusing
to give or for withdrawing Credit Approval or for exercising our rights and
remedies as set forth herein. No modifications or extensions may be granted by
you with respect to any Receivable which has our Credit Approval without our
prior written consent. In the event we shall give our written consent as
aforesaid, upon each and every such consent to your requested modification or
extension, whether as to terms, dates or otherwise, you shall pay us a service
fee in the amount of $10.00 which fee shall be due and payable upon the
issuance of our consent to your proposed modification or extension.
Receivables as to which we have not given our written Credit Approval, either
in whole or in part, shall nevertheless be deemed to have been sold and
assigned to us with full recourse to you to the extent and in the respects and
the amounts not so approved. The credit risk on sales not approved by us is
assumed by you. Such sales shall be Department Risk (D.R) Receivables. All
invoices in an amount less than $200.00 shall be deemed samples and shall
automatically be considered as D.R Receivables. Each and every assignment of
D.R. Receivables hereunder shall be deemed to be a grant of a security
interest in our favor in and to any such Receivable.
3. (a) All of your sales shall be billed and invoiced by you at your
expense upon forms of bills or invoices acceptable to us and shall constitute
assignments to us of the Receivables represented thereby, irrespective of
whether you execute any other specific instrument of assignment in our favor or
otherwise. Each invoice shall be marked payable to us and/or the Re-Factor (as
hereinafter defined) in a manner satisfactory to us and/or the Re-Factor. We
may request shipping and/or delivery receipts covering any of your Receivables
to be promptly delivered to us. You shall not be entitled to any credit with
respect to any Receivable until the relevant shipping documents have been
delivered to us. You will supply us with as many duplicate bills or invoices
as we may from time to time require. At our request, invoices to your
customers shall be mailed by us at your expense.
(b) At the time of each sale you shall execute and deliver to us, in a
form satisfactory to us, a written schedule and assignment of the Receivables
arising out of such sales, together with proof of delivery to your customer.
Notwithstanding your failure to execute and deliver any such written
assignment as aforesaid, each Receivable created by you will be deemed
assigned to us and shall become our property immediately upon shipment of the
merchandise. Billing on your invoices, whether done by you or us, shall
constitute assignment to us of the Receivable represented thereby.
(c) Copies of all credit memoranda as may be issued by you to any of your
account debtors shall be finished to us for the sole purpose of notifying us of
the transmission of such credit memoranda to each such account debtor, it
being understood and agreed that only the account debtor to whom such credit
or allowance is issued shall be entitled thereto.
4. (a) The purchase price (Purchase Price) which we shall pay to you for
Receivables accepted by us, as aforesaid, shall be the "Net Face Amount"
thereof, calculated at our option on any terms offered by you, less our
factoring commission, as set forth below. "Net Face Amount" shall be deemed to
mean the gross amount of the Receivables less all discounts offered to the
customer, whether taken by the customer or not. The Purchase Price less (a)
any reserves which we may, in our sole discretion determine to hold; (b) any
moneys remitted, paid, or otherwise advanced by us to you or for your account
including any amounts which we may be obligated to pay in the future; and (c)
any other of our charges to your
account as provided for in this Agreement, shall be payable by us to you. We
may, in our sole discretion, advance to you from time to time sums up to
eighty (80%) percent of the Purchase Price of the Receivables purchased by us.
(b) Notwithstanding the foregoing, we shall withhold a reserve of sums
otherwise due to you and, in our discretion, may revise the amount of such
reserves from time to time. We shall be entitled to hold all sums to your
credit as security for D.R. Receivables, outstanding claims and any and all
Obligations owing to us, the Re-Factor, our subsidiaries and affiliates by
you, however arising. Further, at our request you shall maintain a credit
balance with us in such amount as will, in our sole discretion, be
commensurate with the volume and character of the business conducted by you
so as to protect us against all possible returns, claims of your customers,
indebtedness owing by you to us or any other contingencies (your
"Obligations"). Except as in our sole discretion, the aggregate amount of
your Obligations at any time shall not exceed $2,000,000.
(c) Amounts owing to us or the Re-Factor in respect to your purchases from
other persons, firms or corporations factored by us or our parent, subsidiary
or affiliate or the Re-Factor are to be considered as advances against our
account with you and may be charged by us to your account at any time whether
before or after the maturity of such amounts.
(d) In addition to our factoring commissions and to any other fees
provided for herein or otherwise, you shall pay us a closing fee for
establishing the factoring arrangements provided herein, in the amount of
$500, which fee is payable on and fully earned as of the date hereof, and
shall be included as part of the Obligations.
(e) If any taxes are imposed, or if we shall withhold or pay any tax or
penalty as a result of or in connection with any transaction or transactions
between us, you hereby indemnify us and hold us harmless from and against all
claims of every kind and nature whatsoever in respect thereof. In addition,
you agree that any such payments made by us shall be charged to your account
and shall be included as part of your Obligations.
(f) We shall have the right and are hereby irrevocably authorized by you
to charge your account or accounts in the amount or amounts of any and all of
your Obligations. Notwithstanding the foregoing, we shall not be required at
any time, or to any extent, to have recourse to any collateral security given
by you to us to secure your Obligations and the exercise of our rights to look
to any such collateral shall be and remain in our sole and absolute
discretion. Accordingly, you shall at all times remain liable for repayment,
upon our demand, of all your Obligations owing to us.
5. We shall be entitled to hold and you hereby grant to us and to our
subsidiaries, affiliates and the Re-Factor, a continuing general lien and
security interest in and to all accounts, contract rights, documents,
instruments, chattel paper, general intangibles, reserves, credit balances, and
all of your property at any time in our possession, or in the possession of any
of our subsidiaries, affiliates or the Re-Factor, or upon or in which we may
otherwise have a lien or security interest as collateral security for any and
all of your Obligations at anytime owing to us, our subsidiaries, affiliates
and the Re-Factor, whether fixed or contingent, no matter how or when arising,
whether under this Agreement or otherwise, and including all Obligations
incurred by you for purchases from any other person, firm or corporation
factored or financed by us, all of which shall be included as part of your
Obligations. In addition to the foregoing you hereby grant us a general lien
and security interest in and to all security and guarantees in your favor as
they may relate to your Receivables and to all of your books and records. You
are to execute and deliver financing statements and any and all instruments
and documents that we or the Re-Factor may request to prefect, protect,
establish or enforce the security interests granted hereunder and any
provisions thereof. You hereby authorize us and/or the Re-Factor to file such
financing statements in your name signed by us and/or the Re-Factor, or a
reproduction of this Agreement to reflect the security interest granted
hereunder.
6 (a) All disputes, claims or controversies relating to any Receivable
must be settled by you at your sole cost and expense. We shall have no
responsibility or liability of any kind or nature whatsoever with respect to
any Receivable, payment of which is refused or withheld by reason of any
dispute, bona fide or not, and whether before or after maturity date, as to
price, terms, delivery, quantity, quality or otherwise, nor where the customer
claims release from liability or inability to pay because of any act of God
or a public enemy or war or because of requirements of law or rules, orders or
regulations having the force of law (each a "Dispute"). Upon our receipt of
notice of the existence of a Dispute, we shall have the right to immediately
charge your account for the entire amount of any Receivable as to which any
such Dispute has arisen whether such Dispute regards that Receivable or any
other Receivable and whether due or not due, and you agree to immediately pay
the amount of all such disputed Receivables to us upon our demand. You shall
promptly advise us in writing of the existence of each Dispute with your
customers upon your receipt of notice thereof and you shall forthwith transmit
to us copies of any and all charge back notices, allowance requests, claims,
correspondence and the like received by you from your customer evidencing the
existence of a Dispute.
(b) Notwithstanding anything to the contrary contained in subparagraph
(a) above and regardless of the date we charge back to you the full amount of
any Receivable where there is a Dispute, it is understood, agreed and
acknowledged that immediately upon the occurrence of any such Dispute we shall
no longer bear or be responsible for the credit risk and/or loss, if any, with
respect to any such Receivables due to financial inability of your customer to
pay. Such risk and/or loss, if any, shall immediately revert to and be deemed
to have been assumed by you without any further or other act on our part. A
charge back shall not be deemed a reassignment.
(c) All fees and expenses of any attorney employed by us or on your
behalf to collect or xxx upon any D.R. Receivable or upon any Receivable with
respect to which we have a notice of Dispute shall be charged to your account
and shall be paid by you and made part of your Obligations. If we, at your
request and on your behalf, file a claim or forward a claim for collection
with respect to a D.R. Receivable ("D.R. Claim") there shall be a charge of ten
(10%) percent of the amount of the D.R. Claim collected in addition to all
other costs and expenses incurred.
(d) Immediately upon our request, you shall pay to us, or reimburse us
for, all sums, costs and expenses (which shall be and are hereby included as
part of the Obligations) which we may pay or incur in connection with or
related to this Agreement. In addition to those items set forth herein
above and hereafter, Obligations shall include: the negotiation, preparation,
consummation, administration and enforcement of this Agreement and all other
documents and/or its related financial accommodations, and the transactions
contemplated hereunder, any future proposed amendments, supplements, consents
or modifications to this Agreement (whether or not executed), all efforts
made to advance, expand, defend, protect or enforce the security interests or
other rights granted to us hereunder, enforcing payment of the Obligations;
filing fees and taxes, recording taxes, expenses for searches incurred by us
from time to time, periodic field examinations of our collateral or your
operations (plus a charge of $600.00 per person per day for our examiners in
addition to the reimbursement for their expenses); wire transfer fees, the
fees and disbursements of our counsel, all fees and expenses for the service
and/or filing of papers, premium on bonds and undertakings, fees of
marshals, sheriffs, custodians or auctioneers and others, travel expenses and
all court costs and collection charges. All Obligations shall accrue interest
after
demand at the Interest Rate (ad defined below). A "demand" as used herein
shall be deemed to have been made upon posting any Obligation to your
account. At our option, all principal, interest, fees, commissions, costs,
expenses and other charges with respect to this Agreement may be charged
directly to your account maintained by us.
(e) Anticipation taken by customers in excess of two (2%) percent
below Prime Rate shall be charged to you.
7. You represent and warrant: (a) that you are solvent; (b) that you
have paid and shall pay all taxes which have become or shall hereafter become
due and payable; (c) that there shall not be any judgements, assessments or
liens filed against you or against any of your property, real or personal,
during the term of this Agreement nor at the time of execution of this
Agreement except as may have been disclosed by you to us in writing; (d) that
each Receivable is based upon your bona fide sale and actual delivery to the
customer of merchandise or rendition of services invoiced in the regular
course of your business; (e) that the customer, without qualification or
limitation, has made himself liable to pay by the maturity date of the
invoice the full amount of the Receivable indicated thereon without
deduction, claim, offset defense or counterclaim; (f) that you have full title
to all merchandise sold; and (g) that your transfers and assignments to us
are free and clear of all encumbrances, liens and security interests and
that you have full title in and to all Receivables.
8. In the event of the rejection, return or recovery of any merchandise
on any Receivable you shall pay us the amount of such Receivable, either in
cash or by the assignment of new Receivables acceptable to us hereunder. We
shall have the right to immediate possession of such merchandise which you
shall hold in trust for our benefit, segregated and identified by you as our
property, and shall have a lien upon it, as well as the ownership of any
Receivables arising from the subsequent sale of such merchandise as security
for the payment of your Obligations. Upon our request, at your expense, you
shall deliver such merchandise, upon five (5) days written notice to you, at
such place and upon such terms as we may deem proper. In the event you fail
to deliver such merchandise as aforesaid, we shall have the right and are
hereby authorized to enter your premises to take immediate possession thereof
and to sell such merchandise, upon notice to you, at public or private sale,
at which sale we may be the purchaser, and at such price or prices and upon
such terms as we, in our sole discretion, may deem acceptable. Only the net
proceeds of the sale, after deduction for all costs and expenses thereof,
shall be credited to your account.
9. We reserve the right to limit the amount of D.R. Receivables, as
well as the amount of any advance thereon. Upon the insolvency of any of your
D.R. customers (as determined in our absolute discretion) or default in
payment by such D.R. customers at maturity, we shall have the right to
immediately charge such sale or sales to your account and you agree to pay
the amount thereof to us on demand. In addition, we shall also be entitled to
charge to you the amounts we receive in payment of any D.R. Receivables
which thereafter we are required to turnover or return to customer or any
legal representative thereof. The provisions of the foregoing shall survive
the termination of this Agreement, and you hold us harmless from any loss or
expense arising out of the assertion of such a claim, including attorneys'
fees and expenses.
10. All checks, notes, remittances, acceptances, proceeds, other
instruments, or cash received by you with respect to any Receivable shall be
our property and if received by you shall be held in trust for us and
immediately turned over to us in kind without deduction. You hereby authorize
and irrevocably appoint us and/or the Re-Factor as your attorney-in-fact to
endorse your name upon checks and other instruments or documents received by
you or us pertaining to the Receivables, and to make, execute and deliver in
your name such further instrument or instruments of assignment of
Receivables to us in furtherance of this Agreement and its purpose as we may,
from time to time, deem necessary. It is understood and agreed that we and/or
the Re-Factor shall have the absolute right but not the obligation, to
deposit all checks and other remittances received by us in payment of
Receivables irrespective of any deductions shown or taken by your customers
or any notification or conditions as may appear thereon. We may charge back
to you or to your account any deduction or deficiencies therein, other than
deficiencies in the payment of Receivables which have heretofore received our
credit approval and which deductions or deficiencies result solely from your
customer's financial inability to pay. Any charge back of your D.R.
Receivables or Disputed Receivables or any of them, shall not be deemed a
reassignment thereof, and title thereto and the merchandise represented
thereby shall remain with and in us as security for your Obligations until we
shall have been fully reimbursed.
11. We have advised you that, from time to time, we may re-assign and
resell the Receivables to another factor (the "Re-Factor"), as we in our sole
and absolute discretion may determine, pursuant to the terms and provisions
of agreements (the "Reassignment Agreements") entered into with such
Re-Factor. You acknowledge and agree that we reserve the right to re-assign
to such Re-Factor any lien or security interest we may hold by virtue of this
Agreement and you hereby consent to any such resale and reassignment.
12. You shall at all times maintain, at your sole cost and expense, books
and records showing all sales and all claims, allowances, Disputes and
similar information with respect to the Receivables and the goods and
services relating thereto. We, or our representative, shall have the right at
any time during normal business hours to examine all of your books which may
pertain to merchandise or Receivables. You agree that you will furnish to us,
as soon as available, but in any event not later than one hundred and twenty
(120) days after the close of each fiscal year, your audited financial
statements for such fiscal year (including balance sheets, statements of
income and loss, statement of cash flow and statement of shareholders'
equity), and the accompanying notes thereto.
13. Interest shall be charged at the Prime Rate plus 2 (the "Interest
Rate") As used herein the "Prime Rate" shall be deemed the prime commercial
rate charged by the Chase Manhattan Bank in effect on the date hereof and as
same may be adjusted upwards or downwards from time to time. The Interest
Rate shall never be less than 10% percent per annum nor greater than the
highest rate permitted by law. Any change in the Interest shall become
effective on the first day of the month following the month in which the
Prime Rate shall have been increased or decreased, as the case may be. The
Interest Rate shall be calculated based on a three hundred and sixty (360)
day year for the actual number of days elapsed and shall be charged to you on
all Obligations including, but not limited to, any debits due us and upon all
moneys remitted, paid or otherwise advanced by us to you or for you account
and shall be payable at the close of each month. All interest charged or
chargeable to your account shall be as an additional advance and shall become
part of your Obligations. You will be charged with interest on all sums
advanced or charged under this Agreement and upon all other sums owed by you
to us of every kind and nature at the Interest Rate (as such term is defined
below) then in effect. For the purpose of computing interest payable by you
under this Agreement, you will be charged with interest on the daily balance
of all sums advanced or charged to you under this Agreement at the Interest
Rate and will be credited with payments received from your customers after
allowing five (5) working days for collection and clearance of remittances.
(b) In no event shall the Interest Rate and any other charges exceed
the highest rate permissible under the law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that a court determines that we have received interest and other
charges hereunder in excess of the highest rate permissible under law, such
excess shall be deemed received on account of, and shall be automatically
applied to reduce the Obligations arising under or in connection with this
Agreement other than interest, and the provisions hereof
shall be deemed amended to provide for the highest permissible rate allowable
under the law. If there are no such Obligations outstanding, we shall
refund any such excess to you.
(c) From time to time, one of your officers or employees may make a
request, verbal or in writing, for disbursement of funds to yourselves, we
shall have no obligation to verify the authorization or propriety of such
requests; however, all requests for disbursements to third party payees must
be made in writing and signed by an authorized signature. A fee of $15.00
shall be charged for each such disbursement made by check and a fee of $35.00
shall be charged for each disbursement made by wire transfer. These charges
are due at the time of disbursement and are part of the Obligations.
14. On or about the 15th day of each month we shall render a statement
to you covering the activity in your account over the previous month. Each
such account as shall be rendered by us shall be deemed correct in all
respects and shall be deemed conclusive and binding upon you and shall be
admissible and conclusive in evidence in any action unless we are notified by
you and, confirmed by us in writing, to the contrary within thirty (30) days
after the due date of the rendering of such statement. In the event of
timely objection to any such statement, only the items expressly objected to
in your notice of objection shall be deemed to be disputed by you. In the
event that we provide to you or on your behalf copies of additional
statements, reports or accountings with respect to the Receivables or
otherwise in connection herewith, you shall pay to us an additional fee in
the amount of $50.00 for each such additional statement, report or
accounting, which fee is due and payable on the date of the issuance by us of
such additional statement, report or accounting, and which fee shall be
included as part of your Obligations.
15. (a) You shall pay us a factoring commission for our services
hereunder which commission shall be and become due on the 15th day of each
month in which we purchase your Receivables, such factoring commission to be
in an amount equal to one (1%) percent of the amount of your gross sales.
The minimum factoring commission on each invoice in respect to any Receivable
shall be $5.00. The minimum aggregate factoring commission payable under
this Agreement for each contract year shall be $20,000 which to the extent of
any deficiency shall be chargeable to your account with us. Factoring
commissions payable to us hereunder are based on your usual and regular terms
of sale which do not exceed 70 days. On all Receivables on which there are
additional terms or a change of terms, in addition to any service fee for
such change, our commission thereon shall be increased at the rate of
twenty five (25%) percent of the base commission or .25%, whichever is
larger, for each additional thirty (30) days or fraction thereof by which
your regular terms are increased. No credit for such change of terms,
however, shall be granted without our prior written approval.
(b) We may modify the charges set forth in Paragraphs 2, 6d, 13c
and 14 above from time to time, on not less then thirty (30) days written
notice.
16. (a) We shall have the right to terminate this Agreement at any
time upon not less than thirty (30) days prior written notice or immediately
upon any Event of Default, as defined below. This Agreement shall continue
in effect until one year from the date hereof and shall be automatically
renewed from year to year thereafter unless you notify us of your termination
to be effective on any anniversary of this Agreement by giving us not less
than sixty (60) days prior written notice. Notice of termination, whether by
you or by us, shall be sent by certified mail, return receipt requested with
postage prepaid. All of our rights and your Obligations arising out of the
transactions prior to termination shall not be effected thereby. Upon any
termination of this Agreement all Obligations shall be deemed to be
immediately due and payable to us and after such termination any such credit
balance in your favor shall continue to be held by us, without interest,
until a final accounting is rendered unless you furnish us with an
undertaking satisfactory to us against any items chargeable to you hereunder.
(b) In the event of your early termination of this Agreement,
whether by virtue of a default hereunder or at your election as set forth
herein above, you agree to pay us in cash or other immediately available
funds, and in addition to all other Obligations, an early termination fee as
and for liquidated damages resulting from such early termination in an amount
equal to the greater of the minimum commission as set forth in paragraph "15"
hereof reduced by any commissions already paid during the contract year or an
amount equal to (i) the percentage of our factoring commission as set forth
in paragraph "15" herein multiplied by the aggregate amount of your
Receivables for the twelve (12) month period immediately preceding the date
of notice of such early termination, as determined by us, in our sole and
absolute discretion; (ii) divided by twelve (12), and (iii) multiplied by the
number of months (or any part thereof) remaining in the then current term.
Such early termination fee shall be conclusively presumed to be the amount of
our damages sustained by the early termination which fee you agree is
reasonable and proper. The early termination fee shall be and is included in
the Obligations.
17. The occurrence of any one or more of the following shall constitute
an Event of Default hereunder and under any supplement hereto or any other
agreement by you with, to, or in favor of us or any of our subsidiaries or
affiliates: (a) you fail to pay or perform when due any of the Obligations;
(b) you breach any of the terms, covenants, conditions or provisions
contained in this Agreement or any other agreement between us; (c) any
present or future representation, warranty or statement of fact made by you
or on your behalf (including any representation, warranty or statement by any
guarantor of your Obligations) to us in this Agreement or any other
agreement, schedule or instrument referred to herein or therein or related
hereto or thereto is false or misleading at any time; (d) we in good faith
believe that because of a change in the conditions or affairs (financial or
otherwise) of you or any guarantor of the Obligations, either (i) the
prospect of payment or performance of the Obligations is impaired or (ii) the
collateral is not sufficient to fully secure the Obligations; and (e) the
occurrence of any of the following with respect to you or any guarantor of
any of the Obligations; dissolution; a termination of existence; insolvency;
business cessation or suspensions; calling of a meeting of creditors;
appointment of a receiver for any property; assignment for the benefit of
creditors; commencement of any voluntary or involuntary proceeding under any
bankruptcy or other insolvency law; entry of any court order which enjoins or
restrains the conduct of business in the ordinary course. Upon the
occurrence of any Event of default hereunder we shall have all the rights and
remedies of a secured party under the Uniform Commercial Code and other
applicable laws with respect to all collateral in which we have a security
interest. We may be, but are not obligated to sell or cause to be sold any
and all of such collateral, in one or more sales or parcels, at such prices
and upon such terms as we may deem best, and for cash or on credit or for
future delivery and whether by public or private sale as we may deem
appropriate. Unless the collateral is perishable or threatens to decline
rapidly in value or is of a type customarily sold on a recognized market, we
shall give you reasonable notice of the time and place of any public sale of
collateral owned by you or of the time after which any private sale or any
intended disposition thereof is to made. The requirements of reasonable
notice shall be met if any such notice is mailed, postage prepaid, to your
address shown herein, at least five (5) days before the time of sale or
disposition thereof. We may be the purchaser at any such public sale. The
proceeds of the sale of such collateral shall be applied first to all costs
and expense of and incident to any such sale, including our attorneys' fees
and then to the payment in such order as we may elect, of all sums owing to
us hereunder. We shall return any excess to you, subject to the rights of
third parties or as
otherwise required by applicable law, and you shall remain liable for any
deficiency. In addition, upon any default interest shall be charged on all
Obligations at the "Default Rate" which rate shall be in an amount equal to
two (2%) percent in excess of the Advance Rate.
18. Any delay or failure on our part to enforce any right or privilege
hereunder, or our waiver of any privilege hereunder, or our waiver of any
default by you as to any terms of this agreement, shall not constitute a
waiver of our rights or privileges with regard to any subsequent or
continuing default and no waiver whatsoever shall be valid unless in writing
and signed by us and then only to the extent therein set forth.
19. You shall not be entitled to pledge our credit upon or in
connection with any of your purchases, or for any other purpose whatsoever.
20. Each of the parties expressly submits and consents to the
jurisdiction of the Supreme Court of the State of New York with respect to
any controversy arising out of or relating to this Agreement or any
supplement hereto or any transactions in connection herewith and hereby waives
personal service of the summons and complaint or other process or papers to
be issued therein and hereby agree that service of such summons and complaint
or process may be made by Registered or Certified mail addressed to the other
party at the address appearing herein. Failure on the part of either party to
appear to answer within thirty (30) days after the mailing of such summons,
complaints or process shall constitute a default entitling the other party to
enter a judgment or order as demanded or prayed for therein. TRIAL BY JURY
IS HEREBY WAIVED BY EACH OF THE PARTIES IN ANY ACTION OR PROCEEDING ARISING
DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY TRANSACTION BETWEEN THE
PARTIES.
21. You hereby indemnify us and hold us harmless from and against any
loss, liability, claim and expense of every kind and nature, including our
attorneys' fees and disbursements, arising from any claim, dispute, action
and proceeding by or against you or against any of your customers or any
other party with regard to any Receivable or this Agreement.
22. From time to time we may designate certain account debtors as
Special Risk. We may notify you in writing at any time and from time to time
of account debtors which we have so designated. Receivables arising out of
sales to account debtors which have been so designated shall be subject to a
surcharge of 2% in addition to the other charges set forth in this Agreement.
All sales to Debtors-in-Possession ("DIP Sales") are considered Special Risk.
23. This Agreement cannot be modified orally and can only be modified
or amended by a written instrument signed by you and by us. This Agreement
supersedes any prior written agreement between us and neither of us shall be
bound by anything not expressed herein.
24. This Agreement, made in the State of New York, shall be construed,
interpreted and enforced according to the laws of the State of New York and
shall be binding upon and inure to the benefit of the parties hereto, their
executors, administrators and assigns. If in the event of litigation between
the parties over any matter connected with this Agreement or resulting from
transactions hereunder, the right to trial by jury is hereby waived.
Very truly yours,
Commodore Factors Corp.
/s/ illegible
--------------------------------------
Title:
ACCEPTED AND AGREED
/s/ illegible
----------------------------- Title
----------------------------- Title
COMMODORE FACTORS CORP.
0000 XXXXXXXX XXX XXXX, X.X. 00000
FACTORING AGREEMENT
CANADIAN
Retrospettiva, Inc. NEW YORK, N.Y. 12/23, 1997
0000 Xxxx Xxxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Re: CANADIAN FACTORING
Gentlemen:
Reference is made to the Factoring Agreement dated 12/23/97 between us as the
same may be amended from time to time (the "Agreement"). All terms used and
not otherwise defined herein shall have the meanings set forth in the
Agreement.
We are pleased to a confirm that we are prepared to purchase Receivables
arising from sales made by you to your customers located in Canada ("Canadian
Receivables").
Accordingly, notwithstanding anything to the contrary contained in the
Agreement, effective as of the date hereof, the Agreement is amended as
follows:
1. Subject to the terms and conditions of the Agreement, you hereby assign
and sell to us as absolute owner all of your Canadian Receivables.
2. Net Sales relating to each Canadian Receivable shall be credited to your
account, net of any deductions, on the Settlement Date of such Canadian
Receivable and such credit shall constitute payment in full of such
Canadian Receivable. Settlement date shall mean, for a Canadian
Receivable having a Deposit Date of payment on Monday through Friday in
any week, Friday of the following week. For the purposes of the preceding
sentence, a Receivable on which we have assumed the risk of nonpayment
under the Agreement which remains unpaid and has not been the subject of
any Dispute 150 days after its due date (the "Deems Paid Date"), shall be
deemed to have a Deposit Date of payment on the Deems Paid Date.
3. It is understood that we may assign any and all of the Canadian
Receivables purchased by us to other persons or entities to act on our
behalf on the performance of our services hereunder including, without
limitation, investigations and approvals and collection of Canadian
Receivables and the institution of legal or other proceedings necessary
to effect collection thereof and you hereby consent thereto in all
respects. You shall execute such instruments as we may from time to time
require empowering our designees to act in your name, and endorse your
name on any and all checks, drafts or other forms of remittance received
in payment of Canadian Receivables purchased by us hereunder.
4. On all Canadian Receivables which are assigned by us to other persons or
entities as provided in paragraph 3, you shall pay to us an additional
factoring commission of 1% of the gross base amount of such Canadian
Receivables. On all other Canadian Receivables, you shall pay to us only
the regular factoring commission.
5. You shall specifically assign the Canadian Receivables to us in separate
assignment schedules, clearly identified as such. You shall legend each
of the Canadian Receivables and every copy thereof to the effect that the
same has been assigned to us or to our assignee as we may direct and is
payable in United States dollars only.
6. We shall charge your account with all of our out-of-pocket costs relative
to the Canadian Receivables including, without limitation, cable and wire
transfer of funds, international telephone and telex communications, and
exchange rates and fees.
7. In the event remittances and payment of Canadian Receivables are received
by us or our assignee in other than United States dollars, we will charge
your account with any difference between the United States dollars owing
under such Canadian Receivables and United States dollars actually
received upon the exchange of the foreign currency, after deducting all
costs and expenses incurred in the making of the exchange.
8. All credit approvals of Canadian Receivables are good only until final
delivery date stated, there is no 30 day leeway as in domestic credit
approvals.
9. Except as hereby specifically modified and amended, all of the terms and
conditions of the Agreement shall remain in full force and effect and the
term Receivable used therein shall include, without limitation, Canadian
Receivables.
Kindly indicate your acceptance of the foregoing by signing and returning the
enclosed copy of this letter.
Very truly yours,
/s/ Illegible
-------------------------------------
COMMODORE FACTORS CORP.
READ AND AGREED TO:
/s/ Illegible
-----------------------------------
title
COLLATERAL SUBORDINATION AGREEMENT
Commodore Factors Corp.
0000 Xxxxxxxx
Xxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We understand that you have agreed to lend moneys to or extend or continue to
extend credit to RETROSPETTIVA, INC. ("Customer") subject to, among other
conditions, the receipt by you of a first security interest upon the
following property (the "Property"):
All present and future account, all unpaid seller rights, returned or
repossessed goods with respect to the accounts and all rights to the
goods represented by the foregoing and all proceeds thereof, that arise
from sales of goods bearing the label X.X. Xxxx, Inc. or any trade names
or marks owned by X.X. Xxxx, Inc. including but not limited to "Xxxx
Xxxxxxx by X.X. Xxxx."
We have or may have a prior security interest upon all or part of the
Property.
Accordingly, and in order to maintain or xxxxxx our business relationship
with Customer, we hereby subordinate to you any and all security interests
that we may have in any of the Property, and agree that as between us, you
shall have a prior lien and security interest upon all of the Property
regardless of the order of filing or other perfection of our respective
security interests. We further agree that: (i) you may without notice to us
or our consent amend or modify your credit or collateral arrangements with
Customer; (ii) we waive notice of the acceptance of this letter by you; (iii)
any transfer by us of our rights in the Property will be subject to your
rights hereunder, and (iv) this letter shall benefit you and your successors
and assigns.
Our subordination hereunder will continue in effect until all of your
commitments to extend credit or lend moneys to Customer have expired or been
terminated and Customer has paid all moneys owed to you and performed all of
its other obligations to you.
Dated as of January 12, 1998.
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------------
Signature
Xxxx Xxxxxxx
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Printed Name
Assistant Vice President
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Title
