Exhibit 10.40


 


	
  

  	
   

  	
  Wells
  Fargo Trade Capital

  
	
   

  	
  100
  Park Avenue

  
	
   

  	
  New York, NY 10017

  
	
   

  	
  212
  703-3500

  
	
   

  	
  212
  703-3520 Fax

  
	
   

  	
   

  
	
   

  	
  February 18, 2010

  



 


Mr. Lance
Arneson 


Verrazano
Inc. 


1411
Broadway 


New
York, NY 10018


 


Re: Amendment


 


Dear
Mr. Arneson:


 


Reference is made to the Factoring Agreement between
VERRAZANO INC. (“Client”) and WELLS FARGO TRADE CAPITAL, LLC (“Factor”),
bearing the effective date of December 19, 2008 (as amended or otherwise
modified, the “Factoring Agreement”).


 


Anything
in the Factoring Agreement to the contrary notwithstanding:


 


1.           The
commission which Client is obligated to pay to Factor on Client’s invoices
dated on or after February 16, 2010 owing by the customer(s) specified
on Schedule A annexed hereto (each, a “Surcharge Customer”) which are
credit approved by Factor, in Factor’s sole discretion, and are on selling
terms not exceeding the selling terms set forth on Schedule A for such
Surcharge Customer (each, a “Special Approved Invoice”) shall be the
rate set forth in the Factoring Agreement plus the surcharge set forth on
Schedule A for such Surcharge Customer.


 


2.           Without
limiting Factor’s right to charge Client’s account with Factor for all other
Obligations (as defined in the Factoring Agreement), Factor shall charge Client’s
account for the Credit Loss Percentage of Credit Losses as set forth on
Schedule A arising from sales to a Surcharge Customer as and when such Credit
Losses are incurred by Factor. For the purposes of this letter agreement, the
term “Credit Losses” shall mean the aggregate net amount of any Special
Approved Invoice which remains wholly or partially unpaid solely and
exclusively from the financial inability of the applicable Surcharge Customer
to pay the Special Approved Invoice at maturity.


 


3.           Factor
may at any time terminate this letter agreement by giving Client at least 10
days prior notice of termination. Such termination will not affect Client’s or
Factor’s rights hereunder with respect to any Special Approved Invoice created
on or before the effective date of such termination, and the Factoring
Agreement will continue in full force and effect in accordance with the terms
thereof, but this letter agreement shall not apply to any invoices created
after the effective date of such termination by Factor.


 


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4.           Whether
or not Factor terminates this letter agreement, Factor shall be under no
obligation at any time to credit approve any of Client’s invoices to any
Surcharge Customers.


 


5.           In
addition, the first sentence of paragraph 9.1 of the Factoring Agreement is
amended to read as follows:


 


“9.1
Term. This Agreement shall begin as of the effective date hereof and
shall continue until December 19, 2011 and thereafter shall be
automatically renewed from year to year unless terminated as of December 19,
2011 or any anniversary thereof by Client giving Factor at least sixty (60)
days prior written notice by registered or certified mail, return receipt
requested.”


 


6.           This
letter agreement amends, restates and supersedes in the entirety any other agreement
or understanding, whether written or oral, regarding surcharges heretofore
entered into between Factor and Client.


 


Except as herein amended or modified, the Factoring Agreement is hereby
ratified and confirmed.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO TRADE CAPITAL, LLC

  
	
   

  	
   

  
	
   

  	
  /s/
  John Szwalek

  
	
   

  	
  John Szwalek

  
	
   

  	
  Senior Vice President

  



 


 


	
  AGREED:

  	
   

  
	
   

  	
   

  
	
  VERRAZANO INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Lance D. Arneson

  	
   

  	
   

  
	
   

  	
  Lance D. Arneson

  	
  2/26/10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  



 


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