TARRANT APPAREL GROUP
EX-10.23.15
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-23_15.txt
<DESCRIPTION>EX-10.23.15
<TEXT>
                                                                EXHIBIT 10.23.15

                                                         [COLLECTION W/ADVANCES]

                           GMAC COMMERCIAL FINANCE LLC
                               FACTORING AGREEMENT

                                                              September 29, 2004

TARRANT APPAREL GROUP
FASHION RESOURCE (TCL), INC.
TAG MEX, INC.
UNITED APPAREL VENTURES, LLC
PRIVATE BRANDS, INC.
NO! JEANS, INC.
3151 East Washington Boulevard
Los Angeles, CA 90023


         Effective  as of  September  29, 2004 GMAC  COMMERCIAL  FINANCE LLC and
TARRANT  APPAREL GROUP,  FASHION  RESOURCE  (TCL),  INC., TAG MEX, INC.,  UNITED
APPAREL  VENTURES,  LLC,  PRIVATE  BRANDS,  INC. and NO! JEANS,  INC. agree that
Factor  shall  act  as  Client's  sole  factor  upon  the  following  terms  and
conditions:

1.       DEFINITIONS

         All initially  capitalized  terms used in this agreement are defined in
Rider I attached hereto.  All other terms used herein,  unless otherwise defined
herein, shall have the meanings given such terms in the UCC.

2.       COVERED SALES; SECURITY INTEREST

(a)      Client  hereby  assigns  and sells to Factor,  as absolute  owner,  and
Factor  hereby  purchases  from Client,  all  Accounts,  created on or after the
Effective  Date,  which arise from Client's sale of  merchandise or rendition of
services.  Factor's purchase of and acquisition of title to each Account will be
effective as of the date of its  creation and will be entered on Factor's  books
when Client furnishes Factor with a copy of the invoice  evidencing such Account
or  electronically  transmits to Factor the details of the invoice in accordance
with Paragraph 9(a) hereof.

(b)      Client hereby grants to Factor a continuing security interest in all of
the Collateral as security for all Obligations.

3.       CUSTOMER CREDIT APPROVAL

         Client shall submit to Factor the  principal  terms of each of Client's
Customers' orders for Factor's written credit approval.  Factor may, in Factor's
discretion,  approve in writing all or a portion of Client's  Customers' orders,
either by establishing a credit line limited to a specific amount for a specific
Customer,  or by  approving  all  or a  portion  of a  proposed  purchase  order
submitted by Client. No credit approval shall be effective (a) unless in writing
or transmitted by Factor electronically; (b) unless the goods are shipped or the
services  rendered within the time specified in Factor's written credit approval
or within  forty-five  (45)  days  after the  approval  is given,  if no time is
specified and (c) unless the assignment of the invoice evidencing the applicable
Account is received  by Factor  within ten (10)  business  days from the date of
such  invoice.  After  the  Customer  has  accepted  delivery  of the  goods  or
performance of the services, Factor shall then have the Credit Risk (but not the
risk of non-payment  for any other  reason),  to the extent of the dollar amount
specified in the credit  approval,  on all Accounts  evidenced by invoices which
arise  from  orders  approved  by Factor in writing  except  for those  Accounts
evidenced by invoices less than Two Hundred Fifty Dollars ($250.00) and invoices
evidencing charges for samples supplied to Client's Customers. Factor shall have
neither  the Credit  Risk nor the risk of  non-payment  for any other  reason on
Accounts  arising  from orders not  approved  by Factor in  writing.  Factor may
withdraw  Factor's  credit  approval  or withdraw or adjust a credit line at any
time before Client delivers the goods or renders the services.

4.       PURCHASE PRICE OF ACCOUNTS; RESERVES

         The  purchase  price of Accounts is the Net Face  Amount  thereof  less
Factor's commission.  The purchase price will be credited to Client's account on
the  Settlement  Date.  Factor may deduct  Reserves  from the amount  payable to
Client on any Settlement Date.

5.       ADVANCES

         If Client  requests,  Factor may, in its  discretion,  make Advances to
Client, subject to Factor's right to withhold Reserves. All amounts which Factor
pays or makes  available  to Client  or for  Client's  account  in excess of the
purchase price of Accounts are loans and shall be chargeable to Client's account
when paid or made available to Client. In no event, however, shall the aggregate
amount of all outstanding Obligations at any time exceed the Borrowing Base. The
Obligations  hereunder shall be the joint and several Obligations of Client. The
Client agrees to use the Advances and loans,  if any, and the proceeds  thereof,
only for  working  capital  purposes  in the  ordinary  course of business or as
otherwise permitted herein.

6.       COMMISSIONS; INTEREST

         For Factor's services, Factor shall charge to Client's account monthly:

(a)      as of the 15th day of each month,  a commission  at the rate of (i) for
all Accounts  for which  Factor has assumed the Credit Risk,  four tenths of one
percent  (0.40%) of the gross face amount of each invoice  evidencing  each such
Account created during


<PAGE>


such month on terms not exceeding sixty (60) days including dating, and (ii) for
all Accounts for which Factor has not assumed the Credit Risk,  thirty-five  one
hundredths  of one  percent  (0.35%)  of the gross face  amount of each  invoice
evidencing  each such Account  created  during such month on terms not exceeding
sixty (60) days including  dating,  in each case, plus an additional one quarter
of one percent (1/4%) for each additional thirty (30) days or portion thereof of
selling  terms;  provided,  however,  that if  Client  changes  the terms of any
invoice whether or not Factor consents to such change (it being  understood that
nothing in this provision  diminishes  Factor's  rights or Client's  obligations
under any other provision hereof including but not limited to Paragraph 9), then
the  commission on the gross face amount of that invoice shall be the commission
hereinabove  set forth plus one  quarter of one  percent  (1/4%) for each thirty
(30) days or portion  thereof of such change.  During the ninety (90) day period
commencing on the Effective Date,  Factor's commission on any invoice evidencing
an Account shall not be less than One Dollar and Fifty Cents  ($1.50).  However,
the aggregate  amount of commissions  which Client is obligated to pay hereunder
shall not be less than the Minimum Commission in each Contract Year during which
this agreement is in effect.  If the Actual  Commission is less than the Minimum
Commission  in any Contract  Year,  Factor shall charge to Client's  account the
Minimum  Commission  Charge for such  Contract  Year.  Factor shall  compute the
Minimum  Commission  Charge,  if any, on a calendar  quarterly  basis and charge
Client's  account  therefor for each calendar quarter in the month following the
end of such calendar quarter; and

(b)      as of the last day of each month, interest on the average daily balance
of all Interest Bearing  Obligations which are outstanding  during such month at
the Borrowing  Rate;  provided,  however,  that if an Overadvance  exists at any
time, then the aggregate amount of the Interest Bearing Obligations in excess of
the Borrowing Base shall be immediately  due and payable  without further notice
or demand, and the average daily balance of the Interest Bearing  Obligations in
that month  shall bear  interest  at the  Overadvance  Rate.  Interest  shall be
calculated  on the basis of the  actual  number of days  elapsed  over a year of
three  hundred  sixty (360) days.  Upon and after the  occurrence of an Event of
Default,  and during the continuance  thereof,  all Interest Bearing Obligations
shall bear interest at the Default Rate.

7.       CHARGES; BALANCES

         Factor may charge to Client's account all Obligations. Unless otherwise
specified,  all Obligations  shall be payable on demand.  All credit balances or
other sums at any time standing to Client's  credit and all Reserves on Factor's
books, and all of Client's property in Factor's possession at any time or in the
possession  of any parent,  affiliate or  subsidiary of Factor or on or in which
Factor or any of them have a lien or security interest, may be held and reserved
by Factor as security for all Obligations. Factor will account to Client monthly
and each monthly  accounting  statement will be fully binding on Client and will
constitute  an  account  stated,  unless,  within  thirty  (30) days  after such
statement  is mailed to Client or within  thirty  (30) days after the mailing of
any adjustment  thereof Factor may make,  Client gives Factor  specific  written
notice of exceptions.

8.       REPRESENTATIONS, WARRANTIES AND COVENANTS

         Client hereby represents, warrants and covenants that:

(a)      Client has good title to the Collateral,  including without limitation,
the Accounts, free of any encumbrance except in Factor's favor; each Accunt is a
bona fide,  enforceable  obligation created by the absolute sale and delivery of
goods or the  rendition  of services in the ordinary  course of  business;  each
Account is due from a Customer  located in the  United  States,  Puerto  Rico or
Canada  and is payable  in United  States  dollars;  the  selling  terms of each
Account  shall not exceed sixty (60) days without the prior  written  consent of
Factor;  Client's Customer is  unconditionally  obligated to pay at maturity the
full amount of each Account without defense,  counterclaim or offset (regardless
of merit); all documents in connection  therewith are genuine;  and the Customer
will  accept the goods or  services.  In addition  to and not in  limitation  of
anything to the contrary  contained herein,  Client shall not, without the prior
written  consent of Factor which  consent shall be in Factor's sole and absolute
discretion, directly or indirectly grant, or permit to exist either by contract,
applicable  law or  otherwise,  any  security  interest  in or lien  upon any of
Client's inventory, other than the liens permitted set forth on Schedule 8(a).

(b)      Client's exact legal name is as set forth on the signature page of this
agreement.  Client shall not change Client's legal name unless Factor shall have
received  not less  than  forty-five  (45)  days  prior  written  notice of such
proposed  change.  Client has not, during the past five years,  been known by or
used any Trade Names or been a party to any merger or consolidation, or acquired
all or  substantially  all of the assets of any entity,  or acquired  any of its
property or assets out of the ordinary  course of business,  except as set forth
on Schedule 8(b).

(c)      Client is an organization of the type and organized in the jurisdiction
set forth on  SCHEDULE  8(C).  SCHEDULE  8(C)  accurately  sets  forth  Client's
organizational  identification  number or accurately states that Client has none
and  accurately  sets forth Client's  federal  employer  identification  number.
Client shall not change  Client's  organizational  identification  number (or if
Client does not have an organizational  identification  number, Client shall not
acquire  one),  or  change  Client's  type  of  organization,   jurisdiction  of
organization or other legal structure unless Factor shall have received not less
than forty-five (45) days prior written notice of such proposed change.

(d)      Client's  chief  executive  office and  mailing  address  and  Client's
Records  concerning  Accounts are located only at the address identified as such
on Schedule  8(d), and Client's only other places of business and the only other
locations of  Collateral,  if any, are the addresses set forth on Schedule 8(d).
Schedule 8(d) correctly  identifies any of such locations which are not owned by
Client and sets forth the owners  and/or  operators  thereof.  Client  shall not
change  Client's  chief  executive  office,  mailing  address or any location of
Collateral  unless Factor shall have received not less than forty-five (45) days
prior written notice of such proposed change.

(e)      Client shall  furnish to Factor  monthly  financial  statements  within
forty-five (45) days after the end of each month,  quarterly  reviewed financial


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<PAGE>


statements  within  sixty  (60) days  after the end of each of  Client's  fiscal
quarters and annual audited financial statements within one hundred twenty (120)
days after the end of each fiscal year, all in form and substance  acceptable to
Factor,  certified by their respective  president or chief financial officer and
reviewed  or audited,  as the case may be, by an  independent  certified  public
accountant  acceptable  to  Factor.  Client  shall  also  cause  all  individual
guarantors of the Obligations,  if any, to furnish to Factor personal  financial
statements  in form and  substance  acceptable to Factor within thirty (30) days
after each anniversary of the Effective Date of this agreement. Client shall, at
Client's  expense,  furnish Factor (i) within fifteen (15) days after the end of
each calendar month, a certificate from the president or chief financial officer
of Client  certifying that as of the end of the immediately  preceding  calendar
month,  none of Client's  property has become  subject to any lien or attachment
(other  than  the lien in favor of  Factor  and any lien set  forth on  Schedule
8(a)), and (ii) with such other financial and operational  information requested
by Factor from time to time. Factor may at all times have access to and inspect,
audit and make abstracts from all of Client's Records at Client's expense.

(f)      Client  shall  maintain  at all times a Tangible  Net Worth of not less
than the minimum amounts indicated below in respect to the  corresponding  dates
noted below (each such date a "Calculation Date") and the immediately  following
fiscal quarter:

       CALCULATION DATE          MINIMUM TANGIBLE
                                     NET WORTH
   -------------------------- ------------------------
   September 30, 2004               $20,000,000
   -------------------------- ------------------------
   December, 31, 2004               $22,000,000
   -------------------------- ------------------------
   March 31, 2005                   $22,000,000
   -------------------------- ------------------------
   June 30, 2005, and as at
   the end of each fiscal           $25,000,000
   quarter thereafter


(g)      Unless  otherwise   permitted   hereunder,   Client  shall  not,  until
satisfaction  in full of the  Obligations  and  termination  of this  agreement,
contract for,  purchase or make any net Capital  Expenditures  during any fiscal
quarter in an aggregate  amount in excess of Eight Hundred  Thousand  ($800,000)
Dollars.

(h)      Unless  otherwise   permitted   hereunder,   Client  shall  not,  until
satisfaction  in full of the  Obligations  and  termination  of this  agreement,
become liable upon the  obligations of any Person by assumption,  endorsement or
guaranty  thereof or otherwise  (other than to Factor) except (i) from and after
the date hereof,  with  respect to  guarantees  made in the  ordinary  course of
business in support of the purchase by any Affiliate of fabric, trim or quota in
an aggregate amount not to exceed Two Million  ($2,000,000)  Dollars at any time
outstanding,  (ii) the endorsement of checks in the ordinary course of business,
and (iii) as set forth on Schedule 8(h).

(i)      Unless otherwise permitted hereunder,  Client may make advances,  loans
or extensions of credit to (i) certain Affiliates designated on Schedule 8(i) in
the ordinary course of Client's business as presently conducted, PROVIDED, THAT,
the aggregate  amount owing from any such Affiliate  shall at no time exceed the
amounts  outstanding  as of the date  hereof as more  particularly  set forth on
Schedule  8(i);  and (ii) all  Affiliates not designated on Schedule 8(i) in the
ordinary course of Client's business as presently conducted, PROVIDED, THAT, the
aggregate amount of all such advances, loans or extensions of credit outstanding
at any given time shall not exceed Five Hundred Thousand  ($500,000)  Dollars in
the aggregate.

(j)      Client shall  immediately  notify Factor in writing of any  merchandise
returns or Disputes  and  promptly  notify  Factor in writing of any  discounts,
anticipation  reductions  or other  unilateral  deductions  taken by  Customers,
credits and allowances to Customers.  Client will settle all Disputes at no cost
or expense to Factor; Factor's practice is to allow Client sixty (60) days to do
so. Should Factor so elect,  Factor may at any time in Factor's  discretion  (i)
withdraw  Client's  authority  to issue  credits to Client's  Customers  without
Factor's prior written consent;  (ii) litigate  Disputes or settle them directly
with the Customers on terms  acceptable to Factor in the event that  Obligations
are then  outstanding  or Factor has made  payment to Client with respect to the
Accounts  involved in such  litigation or settlement;  or (iii) direct Client to
set aside,  identify as Factor's property and procure insurance  satisfactory to
Factor on any  Retained  Goods.  All Retained  Goods (and the proceeds  thereof)
shall be (A) held by Client  in trust  for  Factor  as  Factor's  property,  (B)
subject  to  a  security   interest  in  Factor's  favor  as  security  for  the
Obligations, and (C)disposed of only in accordance with Factor's express written
instructions.

(k)      Factor's Credit Risk, if any, on an Account shall immediately terminate
without  any action on  Factor's  part in the event that (i)  Client's  Customer
asserts a Dispute  (regardless  of merit)  as a ground  for  non-payment  of the
Account or returns or attempts to return the goods represented thereby; (ii) any
representation, warranty or covenant by Client as to the Account is breached; or
(iii) there is any change in the terms or dating on the Account without Factor's
prior written approval. Factor may charge to Client's account, at any time after
the Settlement  Date, the gross face amount of any Account (or portion  thereof)
on which  Factor  does not then have the Credit  Risk,  together  with  interest
thereon from the Settlement Date of such Account to the date of chargeback; such
action on Factor's part shall not be deemed a  reassignment  of such Account and
will not impair Factor's rights thereto or security interest therein, which will
continue to be effective  until this agreement is terminated and all Obligations
are fully satisfied.

(l)      CLIENT  WILL NOT  GRANT A  SECURITY  INTEREST  OR  TRANSFER  ANY  OTHER
INTEREST  IN ANY OF THE  COLLATERAL  OR IN ANY OF CLIENT'S  INVENTORY  TO ANYONE
EXCEPT FACTOR WITHOUT (i) FACTOR'S PRIOR WRITTEN CONSENT OR (ii) THE DELIVERY TO
FACTOR OF AN INTERCREDITOR AGREEMENT, IN FORM AND SUBSTANCE ACCEPTABLE TO FACTOR
IN ITS SOLE DISCRETION, EXECUTED BY FACTOR AND THE PARTY RECEIVING SUCH SECURITY
INTEREST OR OTHER INTEREST.  CLIENT SHALL IMMEDIATELY NOTIFY FACTOR IN THE EVENT
THAT ANY OF  CLIENT'S  PROPERTY  HAS BECOME  SUBJECT  TO ANY LIEN OR  ATTACHMENT
(OTHER THAN PERMITTED ENCUMBRANCES).

(m)      Client is and shall  remain in  compliance  with all  applicable  laws,
regulations and rules.


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<PAGE>


(n)      Client shall take all actions  requested by Factor from time to time to
cause the attachment,  perfection and first priority of, and Factor's ability to
enforce,  Factor's  security  interest in any and all of the Collateral.  Client
irrevocably and  unconditionally  authorizes  Factor (or Factor's agent) to file
and  ratifies  the  filing  at any  time and from  time to time  such  financing
statements with respect to the Collateral  naming Factor or Factor's designee as
the secured party and Client as debtor, as Factor may require, and including any
other  information  with  respect to Client or  otherwise  required by part 5 of
Article 9 of the Uniform  Commercial  Code of such  jurisdictions  as Factor may
determine,  and  setting  forth a  notice  that  any  disposition  of any of the
Collateral by Client without  Factor's prior written consent violates the rights
of Factor,  together with any amendment and continuations  with respect thereto,
which authorization  shall apply to all financing  statements filed on, prior to
or after the date hereof. Client agrees that the foregoing  authorizations shall
be  irrevocable  while this  agreement  remains in effect and  thereafter  until
Factor has  received  final  payment  and  satisfaction  in full in  immediately
available funds of all  Obligations.  In no event shall Client at any time file,
or  permit  or  cause to be  filed,  any  correction  statement  or  termination
statement with respect to any financing  statement (or amendment or continuation
with respect  thereto)  naming Factor or Factor's  designee as secured party and
Client as debtor.

(o)      Upon Factor's request,  Client shall, at Client's expense, duly execute
and deliver,  or shall cause to be duly executed and  delivered,  to Factor such
further  instruments  and do and  cause to be done such  further  acts as may be
necessary or proper in the opinion of Factor to effectuate  the  provisions  and
purposes of this agreement.

9.       INVOICING; PAYMENTS; RETURNS; NOTIFICATION

(a)      Each of Client's  invoices and all copies  thereof  shall bear a notice
(in form and substance  satisfactory  to Factor) that it is owned by and payable
directly and only to Factor at locations  designated by Factor.  With respect to
each such  invoice,  Client  shall  either  (i)  furnish  Factor  with a legible
duplicate  original  of the invoice  accompanied  by a  confirmatory  assignment
thereof,  or (ii)  electronically  transmit to Factor the invoice details and an
assignment schedule using a transmission  format acceptable to Factor.  Client's
failure to furnish such specific assignments shall not diminish Factor's rights.
Client  shall  procure  and hold in trust for  Factor  and  furnish to Factor at
Factor's  request  satisfactory  evidence  of  each  shipment  and  delivery  or
rendition of services. For invoices electronically transmitted to Factor, Client
shall also (i) retain and furnish Factor at Factor's  request  legible copies of
sales schedules and registers,  as well as duplicate  originals of the invoices,
and (ii)  reproduce for Factor at Factor's  request any and all such  electronic
transmissions. Each invoice shall bear the terms stated on the Customer's order,
as  submitted to Factor,  whether or not the order has been  approved by Factor,
and no  change  from the  original  terms  of the  order  shall be made  without
Factor's prior written consent.  Any such change not so approved by Factor shall
automatically  terminate  Factor's  Credit Risk, if any, on the Account  arising
from Client's performance of the order. Client will hold in trust for Factor and
deliver to Factor any  payments  received  from  Client's  Customers in the form
received,  and hereby irrevocably  authorizes Factor to endorse Client's name on
all checks and other forms of payment.  Each  payment  made by a Customer  shall
first be applied to Accounts,  if any, on which Factor has the Credit Risk,  and
the balance, if any, of such payment shall be applied to other Accounts due from
such  Customer.  Client  understands  that  Factor  shall not be liable  for any
selling expenses,  orders,  purchases,  contracts or taxes of any kind resulting
from any of Client's  transactions,  and Client  agrees to indemnify  Factor and
hold Factor  harmless  with  respect  thereto,  which  indemnity  shall  survive
termination of this agreement.

(b)      Factor  shall  have the  right to  communicate  with and  instruct  the
Customers on Client's  Accounts to make payments in respect thereof  directly to
Factor.

10.      TERMINATION

(a)      This  agreement  shall  remain in full force and effect for the Term or
until terminated as follows:

         (i)      Factor may  terminate  this  agreement at any time upon ninety
(90) days prior written notice to Client.  If not so terminated,  this agreement
shall remain in full force and effect unless Client gives Factor  written notice
of termination (by certified mail, return receipt requested) no less than ninety
(90) days prior to and effective as of the  anniversary of the Effective Date in
any year; or

         (ii)     Upon  the  occurrence  of an  Event  of  Default,  Factor  may
terminate this agreement at any time without notice.

(b)      On the  effective  date of  termination  all  Obligations  shall become
immediately due and payable in full without  further notice or demand.  Factor's
rights with respect to  Obligations  owing to Factor,  or chargeable to Client's
account,  arising  out of  transactions  having  their  inception  prior  to the
effective  date of  termination,  will not be affected by  termination.  Without
limiting the foregoing,  all of Factor's security  interests and other rights in
and to all Collateral shall continue to be operative until such Obligations have
been  fully and  finally  satisfied  or Client  has  given  Factor an  indemnity
satisfactory to Factor.

(c)      Notwithstanding anything to the contrary set forth herein, in the event
this  agreement  is  terminated  prior  to the  end of the  Term,  other  than a
termination  pursuant to the first sentence of Paragraph 10(a)(i),  Client shall
pay to Factor,  in addition  to all other  Obligations,  an amount  equal to (i)
Seven Hundred Fifty Thousand  ($750,000) Dollars if the termination occurs on or
after the Effective  Date to and including  the date  immediately  preceding the
first  anniversary of the Effective Date, (ii) Five Hundred Thousand  ($500,000)
Dollars  if the  termination  occurs  on or  after  the  Effective  Date  to and
including the date immediately preceding the second anniversary of the Effective
Date, and (iii) Two Hundred Fifty Thousand ($250,000) Dollars if the termination
occurs on or after the  Effective  Date to and  including  the date  immediately
preceding  the third  anniversary  of the Effective  Date.  Such amount shall be
conclusively  presumed to be the amount of Factor's damages  sustained by reason
of such termination, which Client agrees is fair and proper.

11.      PLACE OF PAYMENT; NEW YORK LAW; FORUM SELECTION; WAIVER OF JURY TRIAL

(a)      All Obligations shall be paid at Factor's office in New York, New York.


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<PAGE>


(b)      This agreement shall be governed by and construed according to the laws
of  the  State  of  New  York  (without  giving  effect  to  its  choice  of law
principles).

(c)      Client  agrees  that all  actions  and  proceedings  arising  out of or
relating directly or indirectly to this agreement or any ancillary  agreement or
any other obligations shall be litigated in the United States District Court for
the Southern  District of New York or, at Factor's  option,  in any other courts
located in New York State or  elsewhere  as Factor may select,  that such courts
are convenient forums,  and that Client submits to the personal  jurisdiction of
such  courts.  Client  hereby  consents  to the  service of  process  therein by
registered or certified mail,  return receipt  requested,  directed to Client at
Client's  address set forth above,  and Client agrees that service so made shall
be deemed complete five (5) days after the date of mailing.

(d)      TO THE EXTENT  LEGALLY  PERMISSIBLE,  BOTH CLIENT AND FACTOR  WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY  LITIGATION  RELATING TO  TRANSACTIONS  UNDER THIS
AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

12.      REMEDIES; WAIVERS; LIMITATION OF LIABILITY

(a)      Factor's  rights and remedies  under this  agreement will be cumulative
and not  exclusive  of any other right or remedy  Factor may have  hereunder  or
under the UCC or otherwise.  Without limiting the foregoing, if Factor exercises
Factor's  rights as a secured  party  Factor may, at any time or times,  without
demand,  advertisement  or notice,  all of which Client hereby waives,  sell the
Collateral, or any part of it, at public or private sale, for cash, upon credit,
or  otherwise,  at Factor's  sole option and  discretion,  and Factor may bid or
become  purchaser at any such sale, free of any right of redemption which Client
hereby waives.  After application of all Collateral to Client's  Obligations (in
such order and manner as Factor in Factor's sole  discretion  shall  determine),
Client shall remain liable to Factor for any deficiency.

(b)      Factor shall have the right, in Factor's sole discretion,  to determine
which  rights,  liens,  security  interests  or remedies  Factor may at any time
pursue, relinquish, subordinate, or modify or to take any other action and incur
any costs or expenses with respect  thereto and such  determination  will not in
any way modify or affect any of Factor's rights hereunder.  Failure by Factor to
exercise any right,  remedy or option under this agreement or delay by Factor in
exercising  the same will not  operate as a waiver;  no waiver by Factor will be
effective  unless  Factor  confirms  it in  writing  and then only to the extent
specifically stated.

(c)      Factor shall have no liability  hereunder (i) for any losses or damages
(including,  without limitation,  incidental,  special,  exemplary,  punitive or
consequential  damages)  resulting from Factor's refusal to assume,  or delay in
assuming,  the Credit  Risk,  or any  malfunction,  failure or  interruption  of
communication facilities, or labor difficulties, or other causes beyond Factor's
control;  or (ii) for indirect,  special or  consequential  damages arising from
accounting  errors  with  respect to  Client's  account  with  Factor.  Factor's
liability  for any default by Factor  hereunder  shall be limited to a refund to
Client of any  commission  paid by Client  during  the  period  starting  on the
occurrence  of the default  and ending when it is cured or waived,  or when this
agreement is  terminated,  whichever is earlier.  Except as  prohibited  by law,
Client waives any right which it may have to claim or recover in any  litigation
with  Factor any  incidental,  special,  exemplary,  punitive  or  consequential
damages or any damages other than, or in addition to,  actual  damages.  Client:
(A)  certifies  that neither  Factor nor any  representative,  agent or attorney
acting for or on behalf of Factor has represented,  expressly or otherwise, that
Factor would not, in the event of litigation, seek to enforce any of the waivers
provided  for  in  this  agreement  or  any  of  the  Other  Documents  and  (B)
acknowledges  that in  entering  into this  agreement  and the Other  Documents,
Factor is relying upon, among other things,  the waivers and  certifications set
forth in this Paragraph 12(c) and elsewhere herein and in the Other Documents.

13.      GENERAL

(a)      Factor may charge to Client's  account the amount of  reasonable  legal
fees  (including,  without  limitation,  fees,  expenses  and costs  payable  or
allocable to attorneys retained or employed by Factor) and other costs, fees and
expenses  incurred by Factor in  negotiating or preparing this agreement and any
legal documentation required by Factor or requested by Client in connection with
this  agreement  or any  amendments  or  supplements  thereof,  or in  enforcing
Factor's  rights   hereunder  or  in  connection  with  the  litigation  of  any
controversy  arising out of this  agreement,  or in  protecting,  preserving  or
perfecting  Factor's interest in, any Collateral,  including without  limitation
all costs incurred or payable with respect to any  Collateral,  and the costs of
all public record filings,  appraisals and searches  relating to any Collateral.
Factor may also charge to Client's  account all charges for wire  transfers  and
Factor's then  standard  price for  furnishing  to Client or Client's  designees
copies of any  statements,  records,  files or other data requested by Client or
them other than  statements  and  reports  of the kind  furnished  to Client and
Factor's other clients on a regular,  periodic  basis in the ordinary  course of
Factor's business.

(b)      This  agreement  cannot be changed or terminated  orally and is for the
benefit of and  binding  upon the parties and their  respective  successors  and
assigns except that Client may not assign or transfer any of Client's  rights or
obligations under this Agreement without Factor's prior written consent,  and no
such assignment or transfer of any such obligation  shall relieve Client thereof
unless Factor has consented to such release in a writing specifically  referring
to the obligation from which Client is to be released.  This agreement,  and any
concurrent  or subsequent  written  supplements  thereto or  amendments  thereof
signed by both of Factor and Client,  represent the entire  understanding of the
parties and supersede all inconsistent agreements and communications, written or
oral,  between  Client's  and  Factor's  officers,  employees,  agents and other
representatives.

(c)      As of the date hereof, the terms,  conditions,  agreements,  covenants,
representations and warranties set forth in the Revolving Credit,  Factoring and
Security  Agreement by and among Tarrant Apparel Group,  Tag Mex, Inc.,  Fashion
Resource (TCL),  Inc., United Apparel Ventures,  LLC and GMAC Commercial Finance
LLC, as successor by merger with GMAC  Commercial  Credit LLC, as the lender and
as agent ("GMAC CF") dated as of January 21, 2000 (as


                                       5
<PAGE>


heretofore  amended,  and as the same now exists or may  hereafter  be  amended,
restated, renewed, replaced, substituted,  supplemented,  extended, or otherwise
modified, the "Existing Factoring Agreement") are hereby amended and restated in
their  entirety  by  the  terms,  conditions,  agreements,  representations  and
warranties set forth in this agreement and the Other  Documents.  Without in any
way limiting the foregoing,  all  affirmative  and negative  covenants and other
obligations as set forth in the Existing Factoring  Agreement are hereby amended
and restated in their entirety by the covenants and other  obligations set forth
in  this  agreement  and  all  affirmative  and  negative  covenants  and  other
obligations  as set forth in the  Existing  Factoring  Agreement  shall be of no
further force and effect after the Effective Date. The amendment and restatement
contained  herein shall not, in any manner,  be construed to constitute  payment
of, or impair, limit, cancel or extinguish,  or constitute a novation in respect
of, the indebtedness  and other  obligations and liabilities of, evidenced by or
arising  under  the  Existing   Factoring   Agreement  (which   obligations  and
liabilities  shall be repaid in accordance with this  agreement),  and the liens
and  security  interests  of  GMAC  CF  securing  such  indebtedness  and  other
obligations and liabilities, which shall not in any manner be impaired, limited,
terminated,  waived or released,  but shall continue in full force and effect in
favor of Factor.

(d)      This  agreement  shall not be effective  unless signed by Client below,
and signed by Factor at the place for Factor's acceptance.


                                       6
<PAGE>


                            [SIGNATURE PAGE FOLLOWS]


                                       7
<PAGE>




         IN  WITNESS  WHEREOF,  each of Factor  and  Client  has  executed  this
agreement as of the Effective Date.

                                       Very truly yours,

                                       GMAC COMMERCIAL FINANCE LLC


AGREED TO on this
29th day of September, 2004.

                                       TARRANT APPAREL GROUP.

                                       By:      /S/ CORAZON REYES
                                       ---------------------------------------
                                       Title:   CHIEF FINANCIAL OFFICER

                                       Address: 3151 East Washington Boulevard
                                                Los Angeles, CA 90023


                                       FASHION RESOURCE (TCL), INC.

                                       By:      /S/ CORAZON REYES
                                       ---------------------------------------

                                       Title:   CHIEF FINANCIAL OFFICER

                                       Address: 3151 East Washington Boulevard
                                                Los Angeles, CA 90023


                                       TAG MEX, INC.

                                       By:      /S/ CORAZON REYES
                                       ---------------------------------------
                                       Title:   CHIEF FINANCIAL OFFICER

                                       Address: 3151 East Washington Boulevard
                                                Los Angeles, CA 90023


                                       UNITED APPAREL VENTURES, LLC

                                       By:      /S/ CORAZON REYES
                                       ---------------------------------------
                                       Title:   MANAGER

                                       Address: 3151 East Washington Boulevard
                                                Los Angeles, CA 90023


                                       PRIVATE BRANDS, INC.

                                       By:      /S/ CORAZON REYES
                                       ---------------------------------------
                                       Title:   CHIEF FINANCIAL OFFICER

                                       Address: 3151 East Washington Boulevard
                                                Los Angeles, CA 90023


                                       NO! JEANS, INC.

                                       By:      /S/ CORAZON REYES
                                       ---------------------------------------
                                       Title:   CHIEF FINANCIAL OFFICER

                                       Address: 3151 East Washington Boulevard
                                                Los Angeles, CA 90023


                       [SIGNATURES CONTINUED ON NEXT PAGE]


                                       8
<PAGE>


                    [SIGNATURES CONTINUED FROM PREVIOUS PAGE]



ACCEPTED at New York, New York, as of the Effective Date.

GMAC COMMERCIAL FINANCE LLC

By:      /S/ KEVIN MCGARRY
---------------------------------------
Title:   EXECUTIVE VICE PRESIDENT

Address: 1290 Avenue of the Americas
         New York, New York 10104


                                       9
<PAGE>


                                     RIDER I

                               FACTORING AGREEMENT
                                     BETWEEN
                           GMAC COMMERCIAL FINANCE LLC
                                       AND
                             TARRANT APPAREL GROUP,
                          FASHION RESOURCE (TCL), INC.,
                                 TAG MEX, INC.,
                          UNITED APPAREL VENTURES, LLC,
                            PRIVATE BRANDS, INC., AND
                                 NO! JEANS, INC.


<PAGE>


                                  DEFINITIONS

         "ACCOUNT" shall have the meaning set forth in the UCC.

         "ACTUAL  COMMISSION"  shall mean the  aggregate  amount of  commissions
actually paid by Client or charged to Client's account.

         "ADVANCE"  shall mean a payment to Client of the  purchase  price of an
Account in advance of the Settlement Date thereof.

         "AFFILIATE"  of any  Person  shall mean (a) any  Person  (other  than a
Subsidiary) which,  directly or indirectly,  is in control of, is controlled by,
or is under common control with such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of
any Person  described  in clause (a) above.  For  purposes  of this  definition,
control of a Person shall mean the power, direct or indirect, (x) to vote 10% or
more  of the  securities  having  ordinary  voting  power  for the  election  of
directors  of such  Person,  or (y) to  direct  or cause  the  direction  of the
management and policies of such Person whether by contract or otherwise.

         "BORROWING  BASE"  shall  mean the  lesser of (a) up to ninety  percent
(90%) of Accounts on which  Factor has the Credit  Risk,  and (b) Forty  Million
($40,000,000) Dollars, MINUS in each case, Reserves.

         "BORROWING  RATE" for each month shall mean an interest  rate per annum
which is one-half of one percent  (0.5%) in excess of the average  Prime Rate in
effect during such month;  provided,  however, that said interest rate shall not
be less than six percent (6%) per annum and shall in no event be higher than the
highest rate permitted by New York law.

         "CAPITAL   EXPENDITURES"   means,   without   duplication,   all   cash
expenditures  (including  deposits)  for, or  contracts  for  expenditures  with
respect to any fixed assets or improvements, or for replacements,  substitutions
or additions thereto, which have a useful life of more than one year.

         "CHATTEL PAPER" shall have the meaning set forth in the UCC.

         "CLIENT" shall mean,  individually  and  collectively,  Tarrant Apparel
Group,  Fashion Resource (TCL),  Inc., Tag Mex, Inc.,  United Apparel  Ventures,
LLC, Private Brands,  Inc. and No! Jeans,  Inc.,  together with their respective
successors and assigns.

         "COLLATERAL"  shall mean and include all of Client's present and future
Accounts, Chattel Paper and Instruments, and all Supporting Obligations, General
Intangibles and Documents arising out of or relating to the foregoing;  Retained
Goods;  credit balances and other property of Client held or received by Factor;
rights of stoppage in transit,  replevin,  repossession,  reclamation  and other
rights and remedies of an unpaid vendor; and all of Client's Records relating to
and all proceeds of the foregoing property and rights.

         "CONTRACT  YEAR"  shall  mean  the  twelve-month   period  starting  on
September ___ of each year.

         "CREDIT  RISK"  shall  mean  the  risk of  loss  resulting  solely  and
exclusively from the financial  inability of Client's Customer to pay an Account
at maturity. Credit Risk shall not include such Customer's inability,  financial
or otherwise,  to pay an Account at maturity due to war, civil strife,  currency
restrictions or foreign political impediments.

         "CUSTOMER"  shall mean and include the account  debtor with  respect to
any Account  and/or the  prospective  purchaser of goods,  services or both with
respect to any contract or contract  right,  and/or any party who enters into or
proposes to enter into any contract or other  arrangement with Client,  pursuant
to which Client is to deliver any personal property or perform any services.

         "DISPUTE" shall mean any cause for nonpayment of an Account, including,
without limitation, any alleged defense, counterclaim,  offset, dispute or other
claim  whether  arising  from or relating to the sale of goods or  rendition  of
services or arising  from or relating to any other  transaction  or  occurrence,
except  for  financial  inability  of  Client's  Customer  to pay an  Account at
maturity.

         "DEFAULT  RATE"  shall  mean an  interest  rate per annum  which is two
percent (2%) in excess of the  Borrowing  Rate or the  Overadvance  Rate, as the
case may be.

         "DOCUMENT" shall have the meaning set forth in the UCC.

         "EFFECTIVE  DATE"  shall  mean the date set  forth in the  introductory
paragraph of this agreement.

         "EVENT OF DEFAULT"  shall mean the  occurrence  of any of the following
events:  if Client shall  suspend  business,  sell all or  substantially  all of
Client's assets, become insolvent or unable to pay debts as they mature, make an
assignment  for the  benefit  of  creditors,  or  apply  for an  extension  from
creditors generally;  or if a creditors' committee is formed


                                       2
<PAGE>


following a meeting of Client's creditors;  or if a receiver or trustee shall be
appointed for Client or Client's property;  or if Client's property shall become
subject  to any lien or  attachment  (other  than a lien set  forth on  Schedule
8(a));  or if a petition under the United States  Bankruptcy Code shall be filed
by or against  Client;  or if Client  shall  seek  relief  under any  insolvency
statute,  federal,  state or other; or if a custodian shall be appointed for all
or  substantially  all of  Client's  property;  or if Client  shall  breach this
agreement or any other agreement between Factor and Client or between Client and
any affiliate of Factor after giving effect to any applicable cure period; or if
Client  shall breach any  agreement  between UPS Capital  Global  Trade  Finance
Corporation (or any of its successors or assigns) and Client after giving effect
to any  applicable  cure period;  or if Client shall fail to pay any  Obligation
when due;  or if any  guaranty of the  Obligations  shall be  terminated;  or if
ownership  or  control  of fifty  percent  (50%) or more of  Client's  aggregate
outstanding  stock,  stock  equivalents  and any other equity  changes after the
Effective Date; or if any other  significant  change in the identity of those in
control  of  Client  (whether  or  not  qualifying  under  the  preceding  "50%"
provision);  or if,  after the  Effective  Date,  Gerard Guez is not a member of
Client's  Board of Directors or is not involved in Client's  management;  or the
occurrence of an Event of Default under the PBG7 Factoring Agreement.

         "FACTOR" shall mean GMAC Commercial Finance LLC.

         "GAAP"  shall mean  generally  accepted  accounting  principles  in the
United States of America in effect from time to time.

         "GENERAL INTANGIBLE" shall have the meaning set forth in the UCC.

         "INSTRUMENT" shall have the meaning set forth in the UCC.

         "INTEREST  BEARING  OBLIGATIONS"  shall mean all Advances and all other
loans and  amounts  charged  and  chargeable  to  Client's  account  under  this
agreement.

         "INVENTORY" shall have the meaning set forth in the UCC.

         "MINIMUM COMMISSION" shall mean $0.

         "MINIMUM  COMMISSION  CHARGE"  shall mean the  difference  between  the
Minimum  Commission and the Actual  Commission if the Actual  Commission is less
than the Minimum Commission.

         "NET FACE  AMOUNT"  shall  mean the gross  face  amount of the  invoice
evidencing  an Account,  less returns,  discounts  (which shall be determined by
Factor where  optional  terms are given),  anticipation  reductions or any other
unilateral  deductions  taken by  Customers,  and  credits,  and  allowances  to
Customers of any nature.

         "OBLIGATIONS"   shall  mean  and   include   all  debts,   liabilities,
obligations,  covenants,  duties and amounts of any nature whatsoever, for which
Client is now or  hereafter  obligated  to Factor  (or to any  corporation  that
directly or indirectly  controls or is controlled by or is under common  control
with Factor,  including without limitation any parent,  subsidiary and affiliate
of Factor), of every kind and description  (whether or not evidenced by any note
or  other  instrument  and  whether  or not  for the  payment  of  money  or the
performance  or  non-performance  of any act),  direct or indirect,  absolute or
contingent,  due or to  become  due,  contractual  or  tortious,  liquidated  or
unliquidated,  whether  arising  under  this  or any  other  present  or  future
agreement  or other  documentation,  or by operation  of law or  otherwise,  now
existing  or  hereafter  arising  (whether  before  or after  the  filing of any
petition in bankruptcy  by or against  Client or the  commencement  of any other
insolvency  proceeding,  including  but not  limited  to an  assignment  for the
benefit of creditors),  including,  without limitation,  any debt,  liability or
obligation  now or  hereafter  owing from  Client to others,  including  without
limitation  any other  present or future  client(s) of Factor,  which Factor may
have  obtained  or  may  obtain,  by  purchase,  assignment,   participation  or
otherwise,  and further including without limitation,  all interest,  charges or
any other  payments  Client is  required  to make to Factor,  together  with all
expenses  and  attorneys'  fees and costs  chargeable  to  Client's  account  or
incurred by Factor in connection  with Client's  account,  whether  provided for
herein or in any such other  agreement or  documentation.  Without  limiting the
foregoing,  Obligations shall include the amounts of all interest,  commissions,
customer late payment charges and bank related charges,  costs, fees,  expenses,
taxes and all Accounts charged or chargeable to Client's account hereunder.

         "OTHER  DOCUMENTS"  shall mean,  collectively,  all notes,  guarantees,
security  agreements and other  agreements,  documents and instruments now or at
any time  hereafter  executed  and/or  delivered by Client or any third party in
connection with this agreement.

         "OVERADVANCE"  shall mean that the aggregate amount of Interest Bearing
Obligations  outstanding  on each of five (5) or more days in any month  exceeds
the Borrowing Base on such days.

         "OVERADVANCE RATE" for each month shall mean an interest rate per annum
which is one percent (1%) in excess of the Borrowing  Rate in effect during such
month.

         "PBG7 FACTORING  AGREEMENT" shall mean that certain Factoring Agreement
effective as of the date hereof between Factor and PBG7, Inc.

         "PERMITTED  ENCUMBRANCES"  shall  mean (a)  liens  in favor of  Factor,
which, in each case,  secure  Obligations;  (b) liens disclosed in the financial
statements  referred to in  paragraph  8(e),  the  existence of which Factor has
consented  to in writing;  (c) deposits or pledges to secure  obligations  under
worker's  compensation,  social security or similar laws, or under  unemployment
insurance;  (d) deposits or pledges to secure bids,  tenders,  contracts  (other
than contracts for the payment of money), leases, statutory obligations,  surety
and appeal bonds and other  obligations  of like nature  arising in the ordinary
course of Client's business; (e) mechanics',  workers',  material men's or other
like liens arising in the ordinary  course of Client's  business with respect to
obligations  which  are not due or which are being  contested  in good  faith by
Client; and (f) liens disclosed on Schedule 8(a).

         "PERSON" shall mean any individual,  sole proprietorship,  partnership,
corporation,   business  trust,  joint  stock  company,  trust,   unincorporated
organization,   association,  limited  liability  company,  institution,  public
benefit  corporation,  joint  venture,  entity or government  (whether  Federal,
state,  county,


                                       3
<PAGE>


city, municipal or otherwise,  including any instrumentality,  division, agency,
body or department thereof).

         "PRIME RATE" shall mean the "Prime Rate" as reported in THE WALL STREET
JOURNAL,  such  rate  to be  adjusted  automatically,  without  notice,  on  the
effective date of any change in such rate.

         "RECORDS"  shall  mean all of  Client's  present  and  future  books of
account of every kind or nature, purchase and sale agreements,  invoices, ledger
cards, ledger sheets,  bills of lading and other shipping evidence,  statements,
files, correspondence,  memoranda,  documents, credit files, business papers and
other  data  relating  to the  Collateral  or any  Customer,  together  with the
computer  software  (whether  owned by Client  or in which it has an  interest),
computer programs,  tapes, disks,  diskettes and other data and software storage
media and devices,  computers,  file  cabinets or  containers in or on which the
foregoing are stored (including, without limitation, any of Client's rights with
respect to the foregoing maintained with or by any other person).

         "RESERVES"  shall  mean  all  Obligations  then  chargeable  to  any of
Client's  accounts,   as  well  as  Obligations  which  may,  in  Factor's  sole
discretion, be chargeable to Client's accounts thereafter.

         "RETAINED  GOODS"  shall mean all  merchandise  returned or rejected by
Customers  or  repossessed  from  Customers  relating to or securing  any of the
Accounts.

         "SETTLEMENT  DATE" shall mean (a) for each  Account on which Factor has
the Credit Risk and which is not due from a department  or chain store,  two (2)
business  days after the day on which the  payment  of the  Account is posted to
Client's  account by Factor  (the  "Collection  Settlement  Date") or the day on
which such payment becomes one hundred twenty (120) days past due,  whichever is
earlier,  (b) for each  Account on which Factor has the Credit Risk and which is
due from a department or chain store,  the Collection  Settlement Date or twenty
(20)  business  days  after the day on which  Factor  receives  notice  that the
Account has been  allowed as a claim under the United  States  Bankruptcy  Code,
whichever is earlier, and (c) for each Account on which Factor does not have the
Credit Risk, the Collection Settlement Date.

         "SUBSIDIARY"  shall mean a corporation  or other entity of whose shares
of stock or other ownership  interests  having ordinary voting power (other than
stock or other  ownership  interests  having  such  power  only by reason of the
happening  of a  contingency)  to  elect a  majority  of the  directors  of such
corporation,  or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.

         "SUPPORTING OBLIGATION" shall have the meaning set forth in the UCC.

         "TANGIBLE  NET  WORTH"  shall  mean,  at a  particular  date,  (a)  the
aggregate  amount of all assets of Client as may be properly  classified as such
in accordance with GAAP consistently  applied excluding (i) such other assets as
are properly classified as intangible assets under GAAP, and (ii) moneys due and
payable by Mr.  Gerard  Guez to  Client,  LESS (b) the  aggregate  amount of all
liabilities of Client.

         "TERM" shall mean the period from the Effective Date hereof through and
including  the third (3rd)  anniversary  of the  Effective  Date hereof,  unless
terminated pursuant to Paragraph 10(a)(i) hereof.

         "TRADE  NAMES"  shall  mean  all  trade  names or  styles,  trademarks,
divisions or other names under which Client conducts business.

         "UCC"  shall  mean the  Uniform  Commercial  Code as in  effect  on the
Effective Date in the State of New York, as from time to time amended.


                                       4

</TEXT>
</DOCUMENT>
