EXHIBIT 10.1
AMENDMENT NUMBER ONE TO FACTORING AGREEMENT
This Amendment Number One to Factoring Agreement ("Amendment") is
entered into as of November 21, 2006, by and between XXXXX FARGO CENTURY, INC.
("Xxxxx Fargo Century"), and IRONCLAD PERFORMANCE WEAR CORPORATION ("Borrower"),
in light of the following:
RECITALS
A. Borrower and Xxxxx Fargo Century have previously entered into
that certain Factoring Agreement, dated as of September 15, 2006 (as amended to
the date hereof, the "Agreement").
B. Borrower and Xxxxx Fargo Century desire to amend the Agreement
as provided for and on the conditions herein.
NOW, THEREFORE, Borrower and Xxxxx Fargo Century hereby amend and
supplement the Agreement as follows:
1. DEFINITIONS. All initially capitalized terms used in this
Amendment shall have the meanings given to them in the Agreement unless
specifically defined herein.
2. AMENDMENTS.
(a) The first sentence of Section 1.2 of the Agreement is
hereby amended and restated in full to read as follows:
"Xxxxx Fargo Century may, at Client's
request but in Xxxxx Fargo Century's sole and
absolute discretion, make advance payments to Client
on the purchase price of Receivables prior to the
aforesaid time or times of Xxxxx Fargo Century's
obligation to make payment thereof, and advances with
respect to Client's Eligible Inventory, in an amount
up to the Advance Limit set forth on the Schedule.
(All of the foregoing are referred to in this
Agreement as "Advances".)"
(b) Section 8 of the Agreement is hereby amended by
adding the following new definition thereto immediately following the definition
of "Deposit Account":
"`ELIGIBLE INVENTORY' means Inventory which
Xxxxx Fargo Century, in its sole and absolute
discretion, deems Eligible Inventory, based on such
considerations as well as Xxxxx Fargo Century may
from time to time deem appropriate. Without limiting
the generality of the foregoing, no Inventory shall
be Eligible Inventory unless, in Xxxxx Fargo
Century's sole and absolute discretion, such
Inventory (i) consists of finished goods, in good,
new and salable condition which are not obsolete or
unmerchantable, and are not comprised of raw
materials, work in process, packaging materials or
supplies; (ii) meets all standards imposed by an
governmental agency or authority; (iii) conforms in
all respects to the warranties and representations
set forth herein; (iv) is at all times subject to
Xxxxx Fargo Century's duly perfected, first priority
security interest; and (v) is situated at the
location(s) shown in the Schedule."
(c) Section 1 of the Schedule to Factoring Agreement is
hereby amended and restated in its entirety to read as follows:
"1. ADVANCE LIMIT
(Section 1.1):
An amount not to exceed the lesser of
$3,000,000 or the sum of (a) and (b) below:
(a) 85% of the net amount of Client's
Eligible Receivables (as defined in Section 8 above);
plus
(b) 50% of the value of Client's
Eligible Inventory (as defined in Section 8 above),
which is located at 0000 XXXX XXXXX, #000, XX
XXXXXXX, XX 00000 and EXEL, INC., 00000 XXXXX XXXXXX,
XXXXXXXX, XX 00000; provided that:
(1) the amount under this
subsection 1(b) shall not exceed the lesser of (i)
the amount under subsection 1(a) above, or (ii)
$1,000,000. "Value" of Client's Eligible Inventory
shall mean the lower of cost or wholesale market
value thereof, as determined by Xxxxx Fargo Century
in its sole discretion."
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to
Xxxxx Fargo Century that all of Borrower's representations and warranties set
forth in the Agreement are true, complete and accurate in all respects as of the
date hereof.
4. NO DEFAULTS. Borrower hereby affirms to Xxxxx Fargo Century
that no Event of Default has occurred and is continuing as of the date hereof.
5. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon:
(a) receipt by Xxxxx Fargo Century of a fully executed
copy of this Amendment;
(b) receipt by Xxxxx Fargo Century of a fully executed
landlord waiver with respect to the premises at 0000 Xxxx Xxxxx, #000, Xx
Xxxxxxx, XX 00000;
(c) receipt by Xxxxx Fargo Century of a fully executed
warehouse waiver with respect to the premises at Exel, Inc. 00000 Xxxxx Xxxxxx,
Xxxxxxxx, XX 00000.
6. COSTS AND EXPENSES. Borrower shall pay to Xxxxx Fargo Century
all of Xxxxx Fargo Century's out-of-pockets costs and expenses (including,
without limitation, the fees and expenses of its counsel, which counsel may
include any local counsel deemed necessary, search fees, filing and recording
fees, and other fees) arising in connection with the preparation, execution, and
delivery of this Amendment and all related documents.
7. LIMITED EFFECT. In the event of a conflict between the terms
and provisions of the Amendment and the terms and provisions of the Agreement,
the terms and provisions of this Amendment shall govern. In all other respects,
the Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
8. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which when so executed and delivered shall be deemed to be an original.
All such counterparts, taken together, shall constitute but one and the same
Amendment. This Amendment shall become effective upon the execution of a
counterpart of this Amendment by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
XXXXX FARGO CENTURY, INC.
By: /s/ Alex Taluch
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Title: SVP
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IRONCLAD PERFORMANCE WEAR CORPORATION
By: /s/ Xxxxxx Xxxxx
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Title: EVP/CFO
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