Exhibit 10.48

 

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FOURTH MODIFICATION TO

LOAN AND SECURITY AGREEMENT

This Fourth Modification to Loan and Security Agreement (this “Modification”) is
entered into by and between CYGNE DESIGNS, INC., a Delaware corporation (the
“Borrower”) and COMERICA BANK (“Bank”), whose Western Market Headquarters is
located at 333 West Santa Clara Street, San Jose, California as of March 26,
2008.

RECITALS

This Modification is entered into upon the basis of the following facts and
understandings of the parties, which facts and understandings are acknowledged
by the parties to be true and accurate:

Bank and Borrower previously entered into a Loan and Security Agreement
(Accounts and Inventory) dated July 30, 2007. The Loan and Security Agreement
was subsequently amended pursuant to the First Modification to Loan and Security
Agreement dated August 27, 2007, the Second Modification to Loan and Security
Agreement, dated November 7, 2007 and the Third Modification to Loan and
Security Agreement, dated December 20, 2007. The Loan and Security Agreement and
each modification shall collectively be referred to herein as the “Agreement.”

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as set forth below.

AGREEMENT

1. Incorporation by Reference. The Recitals and the documents referred to
therein are incorporated herein by this reference. Except as otherwise noted,
the terms not defined herein shall have the meaning set forth in the Agreement.

2. Modification to the Agreement. Subject to the satisfaction of the conditions
precedent as set forth in Section 3 hereof, the Agreement is hereby modified as
set forth below.

(a) The definition of “Borrowing Base” contained in Section 1.6 of the Agreement
is hereby deleted in its entirety and replaced with the following:

“1.6 ‘Borrowing Base’ shall mean the sum of: (1) Eighty percent (80%) of the net
amount of Eligible Accounts after deducting therefrom all payments, adjustments
and credits applicable thereto; (2) the amount, if any, of the advances against
Inventory agreed to be made pursuant to any Inventory Rider, or other rider,
amendment or modification to this Agreement, that may now or hereafter be
entered into by Bank and Borrower; and (3) the lesser of (i) Fifteen percent
(15%) against all letters of credit naming the Borrower as the beneficiary and
advised by Bank, in form satisfactory to Bank or (ii) Three Hundred Fifty
Thousand Dollars ($350,000). Anything contained in the foregoing to the contrary
notwithstanding, Bank may adjust the Borrowing Base percentage(s) and the
definition of Eligible Accounts and Eligible Inventory, in each case as provided
for under subsection 6.7 hereof.”

(b) In Section 1.18(k) contained within the definition of “Eligible Accounts” in
the Agreement, the percentage “fifty (50%)” is deleted in its entirety and
replaced with “forty percent (40%)”.

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(c) Section 6.5 of the Agreement is hereby deleted in its entirety and replaced
with the following:

“6.5 Borrower shall keep the Inventory only at the following location: 4900
Zambrano Street, Commerce, California 90040 and the owner or mortgagee of the
respective location is RREEF America Reit II Corp. MMMM3 California, a Maryland
corporation.

a. Borrower, immediately upon demand by Bank therefor, shall now and from time
to time hereafter, at such intervals as are reasonably requested by Bank,
deliver to Bank, designations of Inventory specifying Borrower’s cost of
Inventory, the wholesale market value thereof and such other matters and
information relating to the Inventory as Bank may request;

b. Borrower’s Inventory, valued at the lower of Borrower’s cost or the wholesale
market value thereof, at all times pertinent hereto shall not be less than N/A
Dollars ($ N/A) of which no less than N/A Dollars ($ N/A) shall be in raw
materials and finished goods;

c. All of the Inventory is and shall remain free from all purchase money or
other security interests, liens or encumbrances, except as held by Bank;

d. Borrower does now keep and hereafter at all times shall keep correct and
accurate records itemizing and describing the kind, type, quality and quantity
of the Inventory, its cost therefor and selling price thereof, and the daily
withdrawals therefrom and additions thereto, all of which records shall be
available upon demand to any of Bank’s officers, agents and employees for
inspection and copying;

e. All Inventory, now and hereafter at all times, shall be new Inventory of good
and merchantable quality free from material defects;

f. Inventory is not now and shall not at any time or times hereafter be located
or stored with a bailee, warehouseman or other third party without Bank’s prior
written consent, and, in such event, Borrower will concurrently therewith cause
any such bailee, warehouseman or other third party to issue and deliver to Bank,
warehouse receipts in Bank’s name evidencing the storage of Inventory and/or an
acknowledgment by such bailee of Bank’s prior rights in the Inventory, in each
case in form and substance acceptable to Bank. In any event, Borrower shall
instruct any third party to hold all such Inventory for Bank’s account subject
to Bank’s security interests and its instructions; and

g. Bank shall have the right upon demand now and/or at all times hereafter,
during Borrower’s usual business hours, after reasonable notice, to inspect and
examine the Inventory and to check and test the same as to quality, quantity,
value and condition and Borrower agrees to reimburse Bank for Bank’s reasonable
costs and expenses in so doing.

(d) Section 6.16(b) of the Agreement is hereby deleted in its entirety and
replaced with the following:

“b. Borrower shall deliver to Bank within thirty (30) days after the end of each
Month, a Company-Prepared balance sheet and profit and loss statement covering
Borrower’s operations and deliver to Bank within ninety (90) days after the end
of each of Borrower’s fiscal years an Audited statement of the financial
condition of Borrower for each such fiscal year by an independent certified
public accountant of recognized standing selected by Borrower and approved by
Bank, including but not limited to, a balance sheet and profit and loss
statement and any other report requested by Bank relating to the Collateral and
the financial condition of

 

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Borrower, and a certificate signed by an authorized employee of Borrower to the
effect that all reports, statements, computer disk or tape files, computer
printouts, computer runs, or other computer prepared information of any kind or
nature relating to the foregoing or documents delivered or caused to be
delivered to Bank under this subparagraph are complete, correct and thoroughly
present the financial condition of Borrower and that there exists on the date of
delivery to Bank no condition or event which constitutes a breach or Event of
Default under this Agreement.”

3. Legal Effect.

(a) Except as expressly set forth herein, the execution, delivery, and
performance of this Modification shall not operate as a waiver of, or as an
amendment of, any right, power, or remedy of Bank under the Agreement, as in
effect prior to the date hereof. Borrower ratifies and reaffirms the continuing
effectiveness of all promissory notes, security agreements, environmental
agreements, and all other instruments, documents and agreements entered into in
connection with the Agreement.

(b) Borrower represents and warrants that the Representations and Warranties
contained in the Agreement are true and correct as of the date of this
Modification, and that no Event of Default has occurred and is continuing.

(c) The effectiveness of this Modification and each of the documents,
instruments and agreements entered into in connection with this Modification,
including without limit any replacement promissory note entered into in
connection herewith, is conditioned upon receipt by Bank of this Modification,
the Amendment to Note, Addendum and Pledge and Security Agreement of even date
herewith and any other documents which Bank may require to carry out the terms
hereof, and including, but not limited to, each of the following:

(i) Any Bank expenses incurred through the date of this Modification.

4. Integration. This is an integrated Modification and supersedes all prior
negotiations and agreements regarding the subject matter hereof. All amendments
hereto must be in writing and signed by the parties.

5. Counterparts. This Modification may be executed in one or more counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute one and the same Modification, and shall become effective when one or
more counterparts have been signed by each of the parties hereto and delivered
to the other party.

(end of Modification – signature page follows)

 

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IN WITNESS WHEREOF, the parties have agreed to enter into this Fourth
Modification of Loan and Security Agreement as of the date first set forth
above.

 

CYGNE DESIGNS, INC.     COMERICA BANK By:   /s/ Roy E. Green     By:   /s/
Deborah Jenkins Name:   Roy E. Green       Deborah Jenkins Its:   Vice President
– Finance     Its:   Vice President – Western Market

 

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LOGO [g86310ex-10.jpg]    Amendment to Note, Addendum and Pledge and Security
Agreement

This Amendment to Note, Addendum and Pledge and Security Agreement (“Amendment”)
is made, delivered, and effective as of March 26, 2008 by and between CYGNE
DESIGNS, INC., a Delaware corporation (“Borrower”) and COMERICA BANK (“Bank”).

WHEREAS, Borrower and Bank are parties to: (i) that certain Master Revolving
Note in the original principal amount of Two Million Dollars ($2,000,000) dated
July 30, 2007 (“Note”); (ii) the Addendum “A” to Master Revolving Note dated
July 30, 2007 (“Addendum”); and (iii) the Pledge and Security Agreement dated
July 30, 2007 (“Pledge and Security Agreement”); and

WHEREAS, Bank and Borrower desire to amend the Note, Addendum and Pledge and
Security Agreement as set forth below;

NOW, THEREFORE, m consideration of the premises and the mutual promises
contained in this Amendment, Borrower and Bank agree as follows:

 

1. The face amount of the Note is now decreased to Two Hundred Thousand and
00/100 Dollars ($200,000.00).

 

2. The definition of “Note Amount” contained in the introductory paragraph of
the Addendum is hereby deleted in its entirety and replaced with “Two Hundred
Thousand and 00/100 Dollars ($200,000.00) (‘Note Amount’)”.

 

3. In Section A(l) of the Addendum, the dollar amount “Two Million and no/100
Dollars ($2,000,000.00)” is deleted in its entirety and replaced with “Two
Hundred Thousand and 00/100 Dollars ($200,000,00)”.

 

4. The Pledge and Security Agreement is hereby terminated.

 

5. Borrower is responsible for all costs incurred by Bank, including without
limit reasonable attorney fees, with regard to the preparation and execution of
this Amendment.

 

6. The execution of this Amendment shall not be deemed to be a waiver of any
Default or Event of Default.

 

7. All the terms used in this Amendment which are defined in the Note shall have
the same meaning as used in the Note, unless otherwise defined in this
Amendment.

 

8. Borrower waives, discharges, and forever releases Bank, Bank’s employees,
officers, directors, attorneys, stockholders, and their successors and assigns,
from and of any and all claims, causes of action, allegations or assertions that
Borrower has or may have had at any time up through and including the date of
this Amendment, against any or all of the foregoing, regardless of whether any
such claims, causes of action, allegations or assertions are known to Borrower
or whether any such claims, causes of action, allegations or assertions arose as
result of Bank’s actions or omissions in connection with the Note, or any
amendments, extensions or modifications thereto, or Bank’s administration of the
debt evidenced by the Note or otherwise.

 

9. This Amendment is not an agreement to any further or other amendment of the
Note or the Addendum.

 

10. Borrower expressly acknowledges and agrees that except as expressly amended
in this Amendment, the Note and Addendum, as amended, remains in full force and
effect and is ratified, confirmed and restated.

 

11. This Amendment may be executed in one or more counterparts, each of which
shall be deemed an original but all of which taken together shall constitute one
and the same Amendment, and shall become effective when one or more counterparts
have been signed by each of the parties hereto and delivered to the other party.

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on
the date set forth above.

 

CYGNE DESIGNS, INC.     COMERICA BANK By:   /s/ Roy E. Green     By:   /s/
Deborah Jenkins Name:   Roy E. Green       Deborah Jenkins Its:   Vice President
– Finance     Its:   Vice President – Western Market