Document:

Client Subordination Agreement dated July 31, 2005

 Exhibit 10.12 
  
 CLIENT SUBORDINATION AGREEMENT 
  
 Dated: July 31, 2005 
  

	To:	MILBERG FACTORS, INC. 

 99 PARK AVENUE 
 NEW YORK, NY 10016 
  
 Gentlemen: 
  
 Cygne Designs, Inc. (hereinafter designated as “Client”) is now indebted to the undersigned in the sum set opposite the signature of the undersigned below. The undersigned represents that said indebtedness
has not heretofore been assigned to or subordinated in favor of any other person, firm or corporation and that irrespective of the time, order or method of attachment or perfection of the security interest granted to the undersigned pursuant to that
certain Security Agreement dated as of the date hereof between Client and the undersigned (such security interest hereinafter designated as the “Subordinated Security Interest”) and the security interests granted to you pursuant to that
certain factoring agreement bearing the effective date of July 31, 2005 with Client (the “Factoring Agreement”) and certain supplemental security agreements dated as of the date thereof between Client and you (such security interest
hereinafter designated as the “Senior Security Interest”), or the time or order of the filing of financing statements thereof, the Senior Security Interest is senior in operation and effect to the Subordinated Security Interest or any
other lien or security interest now owned or hereafter acquired by the undersigned with respect to any of Client’s assets or properties, and the Subordinated Security Interest is subordinate, junior and inferior and postponed in priority,
operation and effect to the Senior Security Interest. 
  
 To induce you to enter
into the Factoring Agreement and/or to continue under your present arrangement with Client and/or to make loans and advances and/or to grant financial accommodation or credit otherwise to Client at any time (including the extension or renewal, in
whole or in part, of any antecedent or other debt) upon such terms and for such amounts as may be mutually agreeable to you and Client, the undersigned hereby agrees to make subject and subordinate and does hereby make subject and subordinate the
payment of the aforementioned indebtedness and any and all other present or future indebtedness of Client to the undersigned together with any and all interest accrued or to accrue thereon (all hereinafter referred to as “secondary
obligations”) to the payment of any and all debts, obligations and liabilities of Client to you, whether absolute or contingent, due or to become due, now existing or hereafter arising and whether direct or acquired by you by transfer,
assignment or otherwise (all hereinafter referred to as “primary obligations”), and the undersigned agrees not to (i) ask, demand, sue for, take or receive payment of or security for all or any part of said secondary obligations (other
than the taking of the Subordinated Security Interest), (ii) challenge in any manner whatsoever the validity or priority of, or otherwise interfere with, the Senior Security Interest, including, without limitation, in any legal proceeding, and (iii)
exercise any of its rights or remedies against Client with respect to any of the secondary obligations, the Subordinated Security Interest or the collateral subject thereto, in each case, until and unless all and every part of said primary
obligations shall have been fully paid and discharged. The undersigned agrees to and does hereby deliver to you endorsed in blank any note or other instrument evidencing said secondary obligations, to be held by you as collateral security for the
payment and discharge in full of any and all of said primary obligations. Notwithstanding anything to the contrary herein, the Client shall not be permitted to make, and we shall not accept, any payment in respect of the secondary obligations,
except as expressly permitted pursuant to the Factoring Agreement. The undersigned has reviewed, understands and agrees to the conditions set forth in the Factoring Agreement to the Client making any payment in respect of the secondary obligations.

  
 Upon any distribution of any assets of Client, whether by
reason of sale, reorganization, liquidation, dissolution, arrangement, bankruptcy, receivership, assignment for the benefit of creditors, foreclosure or otherwise, you shall be entitled to receive payment in full of said primary obligations prior to
the payment of all or any part of said secondary obligations. To enable you to assert and enforce your rights hereunder in any such proceeding or upon the happening of any such event, you or any person whom you may designate are hereby irrevocably
appointed attorney in fact for the undersigned with full power to act in the place and stead of the undersigned, including the right to make, present, file and vote such proofs of claim against Client on account of all or any part of said secondary
obligations as you may deem advisable and to receive and collect any and all dividends or other payments made thereon and to apply the same on account of said primary obligations. The 

 
undersigned will execute and deliver to you such instruments as may be required by you to enforce any and all such secondary obligations, to effectuate the
aforesaid power of attorney and to effect collection of any and all dividends or other payments which may be made at any time on account thereof. 
  
 While this instrument remains in effect the undersigned will not transfer or assign any right, claim or interest of any kind or otherwise grant any
security interest in or to all or any part of said secondary obligations without your written consent thereto first procured. You may at any time, in your discretion, renew or extend the time of payment of all or any of said primary obligations or
waive or release any collateral which may be held therefor, and you may enter into such agreements with Client as you may deem desirable without notice to or further assent from the undersigned and without in any wise affecting your rights
hereunder. 
  
 The within instrument is and shall be deemed to be
a continuing subordination and shall be and remain in full force and effect until actual receipt by you from the undersigned of written notice that the within instrument shall not continue in force and effect with respect to any debt, obligation or
liability of Client to you having its inception after the receipt by you of such written notice. The words “you” and “your” as used herein shall mean and include and this instrument shall apply in favor of and be severally
enforceable by each addressee hereinabove named and/or any concern which is or may at any time be its parent or subsidiary. 

 SIGNATURE OF SUBORDINATOR 
  

					
	Name and Address	  	Amount of Indebtedness	  	 
	 Commerce Clothing Company LLC, 5804 E. Slauson Avenue, Commerce, CA 90040
	  	$47,500,000	  	 

  

			
		
	By	 	 /s/ Hubert Guez

	 	 	Hubert Guez, Manager
		
	Attest:	 	 /s/ Tricia Landry

  

	To:	Milberg Factors, Inc. 

 99 Park Avenue 
 New York, NY 10016 
  
 This 31st day of July, 2005, the undersigned Client hereby acknowledges notice of the within and foregoing subordination and agrees to be bound by all the
terms, provisions and conditions thereof. The amount of secondary obligations stated therein is hereby acknowledged to be due and owing as of the date hereof. The undersigned Client further agrees, without your written consent thereto first
procured; not to repay all or any part of said secondary obligations or to issue any note or other instrument evidencing the same. 
  

			
	CYGNE DESIGNS, INC.
		
	By:	 	 /s/ Bernard M. Manuel

	 	 	Bernard M. Manuel, Chairman
	 	 	& Chief Executive Officer

  
 ACKNOWLEDGEMENTS
BY SUBORDINATOR 
  

			
	STATE OF CALIFORNIA	    	 
	 	    	}SS:
	COUNTY OF LOS ANGELES	    	 

  
 On this 31st day of July, 2005 before me, the undersigned, a notary public in and for said state, personally appeared Hubert Guez,
personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument. 
  

	
	  

 (Notary)Letter Agreement dated July 31, 2005

 Exhibit 10.13 
  
 Cygne Designs, Inc. 
  
 July 31, 2005 
  
 Roy Green 
 975 Park Avenue 
 New York, New York 10028 
  
 Dear Roy: 
  
 As you know, Cygne Designs, Inc.
(“Cygne” or the “Company”) is proposing to enter into an agreement (the “Asset Purchase Agreement”) relating to the purchase of certain of the assets of Commerce Clothing Company LLC. 
  
 This letter is to inform you that, immediately prior to the closing (the “Closing”)
of the transactions contemplated by the Asset Purchase Agreement, your Employment Agreement with Cygne made as of May 1, 1993 (the “Employment Agreement”) will be terminated; provided that, Sections 4, 9, 10, 11 and 12 of the Employment
Agreement shall survive the date of the Closing. Upon termination of the Employment Agreement, you will become an at-will employee of the Company. While an at-will employee of the Company, you will be paid a base salary of $245,000 per annum and
serve as Senior Vice President – Chief Financial Officer and Secretary of the Company or in such other capacities determined by the Company from time to time. 
  
 By signing below, you agree to accept at the Closing and in lieu of all amounts which may be due and owing to you under your Employment
Agreement, including any amounts which may be due under Section 7(g), (h), (i) or (j), a cash payment of $339,223 (the “Special Bonus”). The Special Bonus shall only be payable if you remain employed by Cygne and perform your customary
functions as Senior Vice President – Chief Financial Officer, Treasurer and Secretary, assist in the consummation of the transactions contemplated by the Asset Purchase Agreement, until the Closing, and comply with the provisions of Section 9
of the Employment Agreement. 
  
 As of the Closing and the payment of the Special
Bonus, you shall be subject to the terms of Section 9 of the Employment Agreement during your employment and for the one year period thereafter. 
  
 The foregoing voluntary payment is given in return for your discharge and release of all claims, obligations, and demands which you have, ever had, or in the future may
have, against the Company, any affiliated entities and any of its or their officers, directors, employees, or agents, arising up to the date of this Release, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the
Fair Labor Standards Act, the New York Executive Law, the Administrative Code of the City of New York, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Employee 

 Roy Green 
 July 29, 2005

 Page 2 
  
 Retirement Income Security Act of 1974, the Americans With Disabilities Act, and all other federal, state, and local discrimination laws, and claims for wrongful discharge. You further waive and release any claimed
right to reemployment, or employment in the future with the Company. You do not, however, waive or release any claims which arise after the date that you execute this agreement. 
  
 The Company has advised you to consult with an attorney and/or governmental agencies prior to executing this agreement. By executing this
agreement you acknowledge that you have been provided an opportunity to consult with an attorney or other advisor of your choice regarding the terms of this agreement, that you have been given a minimum of twenty-one days in which to consider
whether you wish to enter into this agreement, and that you have elected to enter into this agreement knowingly and voluntarily. You may revoke your assent to this agreement within seven days of its execution by you (the Revocation Period), and the
agreement will not become effective or enforceable until the Revocation Period has expired. 
  
 Please confirm that the foregoing is in accordance with your understanding and agreement by signing and returning to us the enclosed duplicate of this letter. 
  

			
	Very truly yours,
	
	CYGNE DESIGNS, INC.
		
	By:	 	 /s/ Bernard Manuel

	 	 	 Bernard Manuel

	 	 	 President

  

	
	ACCEPTED AND AGREED
	
	 /s/ Roy Green

	 Roy Green

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