EXHIBIT 10.19
FTC
COMMERCIAL CORP.
As of December 1, 2005
TAVERNITI SO JEANS, LLC
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
This Amendment No. 2 to Factoring Agreement (this "Amendment") is
entered into as of December 1, 2005 by and between FTC COMMERCIAL CORP. ("FTC",
"we" or "us") and TAVERNITI SO JEANS, LLC ("Client" or "you"), with reference to
the following:
A. FTC and Client are parties to a Factoring Agreement dated
effective as of November 22, 2004 (as amended, the "Factoring Agreement"), the
provisions of which are incorporated into this Amendment.
B. FTC and Client desire to amend the Factoring Agreement, 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 first sentence of the second paragraph of Section 2 of the
Factoring Agreement is hereby amended, effective as of December 1, 2005, to read
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, as 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, effective as of December 1, 2005, to read 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 three sentences of the first subsection of Section
23 of the Factoring Agreement entitled "FACTORING SERVICE CHARGE" are hereby
amended, effective as of January 1, 2006, to read as follows:
You shall pay us a commission in an amount equal to (a) four
tenths of one percent (0.40%) of the net amount of each
client's risk account and (b) three quarters of one percent
(0.75%) of the net amount of each account which is approved by
us; provided, however, that: (i) if the aggregate net amount
of Combined Assigned Approved Accounts (the aggregate net
amount of (A) approved accounts assigned to us by you under
this Agreement PLUS (B) approved accounts assigned to us by
Antik Denim, LLC under the Factoring Agreement between Antik
Denim, LLC and us dated October 18, 2004, as amended, PLUS (C)
approved accounts assigned to us by Blue Holdings, Inc. under
the Factoring Agreement between Blue Holdings, Inc. and us
dated July 25, 2005, as amended) during a calendar year (the
twelve month period from January 1, 2006 through December 31,
2006 or any twelve month period thereafter) exceeds
$10,000,000 but is less than or equal to $20,000,000, the
commission on each approved account assigned by you to us
under this Agreement during such calendar year in excess of
said $10,000,000 up to said $20,000,000 shall be seven tenths
of one percent (0.70%) of the net amount of such approved
account, and (ii) if the aggregate net amount of Combined
Assigned Approved Accounts during such calendar year exceeds
$20,000,000 but is less than or equal to $30,000,000, the
commission on each approved account assigned by you to us
under this Agreement during such calendar year in excess of
said $20,000,000 up to said $30,000,000 shall be sixty-five
hundredths of one percent (0.65%) of the net amount of each
such approved account, and (iii) if the aggregate net amount
of Combined Assigned Approved Accounts during such calendar
year exceeds $30,000,000, the commission on each approved
account assigned by you to us under this Agreement during such
calendar year in excess of said $30,000,000 shall be six
tenths of one percent (0.60%) of the net amount of each such
approved account. Factoring commissions payable to us
hereunder are based on your usual and regular selling terms
which do not exceed ninety (90) days and if the selling terms
on an account receivable exceed such ninety (90) days selling
terms, you shall pay us an additional factoring commission
equal to one quarter of one percent (0.25%) of the net amount
of such account receivable for each thirty (30) days or part
thereof the selling terms thereof exceed such ninety (90) days
selling terms; provided, however, that no such increase in
terms or dating shall be granted without our prior written
approval. Notwithstanding any provisions herein to the
contrary, in no event shall the factoring commission paid by
you be less than $3.00 per invoice.
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.
Sincerely, AGREED:
FTC COMMERCIAL CORP. TAVERNITI SO JEANS, LLC
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx Xxxx
By:____________________________ By:______________________________
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx Xxxx
Title: President Title: CFO
