EXHIBIT 10.15
FTC
COMMERCIAL CORP.
September 1, 2005
Blue Holdings, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
This Amendment No. 1 to Factoring Agreement (this "Amendment") is
entered into as of September 1, 2005 by and between FTC COMMERCIAL CORP. ("FTC",
"we" or "us") and BLUE HOLDINGS, INC. ("Client" or "you"), with reference to the
following:
A. FTC and Client are parties to a Factoring Agreement dated
effective as of July 25, 2005 (as amended, the "Factoring Agreement"), the
provisions of which are incorporated into this Amendment.
B. FTC and Client desire to amend the Factoring Agreement,
effective as of the date of this Amendment, as set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned to them in the Factoring
Agreement.
2. The second sentence of the third paragraph of Section 2 of the
Factoring Agreement is hereby amended as follows:
Outstanding factoring advances under this Agreement shall not
at any time exceed the maximum factoring advances amount,
which shall be defined, as of any date of determination, an
amount equal to (i) up to ninety percent (90%) of the purchase
price of all accounts purchased from you by us from time to
pursuant to this Section 2 less (ii) such reserves as we in
our sole discretion elect to establish, including, without
limitation, additional reserves for the concentration
accounts, recourse accounts, disputed accounts, and
non-disputed accounts.
3. The first sentence of Section 3 of the Factoring Agreement is
hereby amended as follows:
Ten percent (10%) of all unpaid accounts purchased by us and
one hundred percent (100%) of all accounts which are disputed
or which you may be obligated to repurchase (including,
without limitation, any "client's risk account" as defined in
Section 4) shall be held by us as cash collateral (hereinafter
the "Reserve")
against which we may at any time charge any liability you may
now or hereafter owe us, directly or indirectly.
4. The first sentence of Section 17 of the Factoring Agreement is
hereby amended as follows:
This Agreement shall be effective until July 24, 2006 and
shall continue in force and effect thereafter but it may be
terminated on July 24, 2006 or at any time thereafter by
either of us giving the other at least one hundred twenty
(120) days prior written, provided, however, that we may
terminate this Agreement any time without notice to you should
any of the following events (each an "Event of Default")
occur: you make an assignment for the benefit of creditors;
you make any transfer in bulk and not in the ordinary course
of business of a major part of your materials, supplies,
merchandise, or other inventory; you file a petition in
bankruptcy; petition or apply to any tribunal for the
appointment of a custodian, receiver, or any trustee for you
or a substantial part of your assets; or commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statue
of any jurisdiction, whether now or hereafter in effect; you
have filed against you any such petition or application or you
have commenced against you any such proceeding and, as a
result of such petition or application or in such proceeding
an order for relief is entered or such proceeding remains
unstayed and undismissed for a period of thirty (30) days or
more; we reasonably believe you to be insolvent; or you breach
any agreement or warranty or default in the prompt performance
of any obligation hereunder.
5. Except as amended hereby, the Factoring Agreement shall remain
in full force and effect and unmodified. Client hereby reaffirms each and every
one of Client's representations, warranties and covenants under the Factoring
Agreement.
6. Any reference in the Factoring Agreement to "this Agreement",
"herein", "hereunder" or words of similar meaning shall mean the Factoring
Agreement as amended by this Amendment.
7 Client hereby represents and warrants to FTC that this
Amendment has been duly authorized by all necessary action on the part of Client
and constitutes a valid and legally binding obligation of Client, enforceable
against Client in accordance with its terms.
8. This Amendment shall be governed by the laws of the State of
California without regard to the conflicts of law principles
thereof.
9. The Factoring Agreement, as amended by this Amendment,
constitutes the entire agreement between Client and FTC as to the subject matter
hereof and may not be altered or amended except by written agreement signed by
Client and FTC. No provision hereof may be waived by FTC except upon written
waiver executed by FTC.
10. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
Executed at Los Angeles, California, as of the date first set forth
above.
FTC COMMERCIAL CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, President
AGREED:
BLUE HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: CFO
