EXHIBIT 10.21
Dated as of
________ __, 2000
Avid Sportswear, Inc.
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Re: Avid Sportswear, Inc. ("Client");
GE Capital Commercial Services, Inc. ("Factor")
Gentlemen:
Reference is hereby made to the following documents:
A. Factoring Agreement, dated as of ________ __, 2000, between Client and
Factor (the "Factoring Agreement").
B. Factoring Agreement - Guaranty/Letter of Credit Supplement, dated as of
________ __, 2000, between Client and Factor (the "Letter of Credit
Supplement").
C. Factoring Agreement - Inventory Supplement (with advances), dated as of
________ __, 2000, between Client and Factor (the "Inventory Supplement").
D. Various other agreements and documents entered into in connection with
the Factoring Agreement (such other agreements and documents, together with the
Factoring Agreement, Letter of Credit Supplement and Inventory Supplement are
collectively referred to as the "Factoring Documents").
In connection with the Factoring Documents, Client and Factor agree as
follows:
1. Client hereby acknowledges and understands that with respect to the
Accounts Receivable (as that term is defined in the Factoring Agreement)
existing as of the effective date of the Factoring Agreement (collectively, the
"Takeover Accounts", Factor shall purchase the Takeover Accounts with full
recourse and Factor has not and will not assume any credit risk in connection
with the Takeover Accounts. Notwithstanding the provisions of Section 13 of the
Factoring Agreement to the contrary, Client agrees to pay Factor a commission
equal to ___________________________ percent (__%) of the gross amount of the
Takeover Accounts; provided, however, that the minimum commission for each
Takeover Account shall be $_____. The commission on the Takeover Accounts shall
be payable pursuant to Section 13 of the Factoring Agreement.
2. Client acknowledges that Factor is relying on the Chief Executive
Officer and Chief Financial Officer of Client, collectively referred to as
"Senior Management", in making its decision to provide factoring and financing
Avid Sportswear, Inc.
July __, 2000
Page 2
services to Client. Factor has determined that the Senior Management of Client
is experienced and skilled in the business currently being conducted by Client.
Consequently, Client and Factor agree that any change in the Senior Management
of Client which Factor determines, in its sole discretion, to materially impair
the operations of Client's business shall constitute an Event of Default, as
that term is defined in Section 17 of the Factoring Agreement.
3. All costs, fees (including attorneys' fees) and expenses incurred by
Factor in (i) auditing, appraising and evaluating Client and its business
operations, and (ii) in preparing, drafting, negotiating and finalizing the
factoring and financing documents (including, all of the Factoring Documents),
to the extent that they exceed, in the aggregate, $_____, shall be paid by
Client. In this connection, Factor shall be entitled to charge Client's loan
account with amount of such costs, fees and expenses.
Except as specifically modified by this letter agreement, the Factoring
Documents shall remain unchanged and in full force and effect.
Very truly yours,
GE CAPITAL COMMERCIAL SERVICES, INC.
By:______________________________
Name:____________________________
Title:___________________________
Agreed and accepted as of
the ___ day of _______, 2000
AVID SPORTSWEAR, INC.
By:______________________________
Name:____________________________
Title:___________________________
