Exhibit 10.22

 

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99 PARK AVENUE

NEW YORK, N.Y. 10016

(212) 697-4200

As of January 31, 2006

Cygne Designs, Inc.

11 West 42nd Street

New York, New York 10036

 

  Re: Factoring Agreement dated July 31, 2005

Gentlemen:

We refer to the Factoring Agreement dated as of July 31, 2005 (the “Factoring
Agreement”), which among other things sets forth the terms on which Milberg
Factors, Inc. (“Milberg”) has agreed to make certain discretionary advances
available to Cygne Designs, Inc. (the “Borrower”). All capitalized terms used
but not defined herein shall have the respective meanings ascribed to such terms
in the Factoring Agreement.

WHEREAS, the Factoring Agreement, without limiting Milberg’s discretion with
respect to the provision of advances, requires that the Borrower be in
compliance with certain financial covenants; and

WHEREAS, the Borrower has failed to be in compliance with certain financial
covenants during the period beginning on October 1, 2005 and continuing through
the date hereof; and

WHEREAS, the Borrower has requested that Milberg waive and consent to such
non-compliance and agree to amend (without in any way limiting Milberg’s
discretion with respect to the provision of any such advances) certain financial
covenants with respect to the period from the date hereof through April 30,
2006.

NOW, THEREFORE:

 

1. Milberg hereby waives and consents to the Borrower’s non-compliance with the
Working Capital covenant set forth in clause (p) of Section 6(b) of the
Factoring Agreement (together, the “Financial Covenants”) for the period
beginning on October 1, 2005 and continuing through January 30, 2006; provided
that such waiver and consent shall be expressly conditioned on the accuracy of
the representations of, and the continued compliance from and after the date
hereof with the covenants by, the Borrower as set forth in paragraphs 2 and 3
below. Such waiver and consent is specific to the breaches of the Financial
Covenants with respect to the above specified period, and shall in no way or
manner be construed to apply to any other time period or other term, condition,
covenant or obligation contained in the Factoring Agreement.

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2. Each of the Borrower and Milberg agrees that Section 6(b) of the Factoring
Agreement is hereby amended as follows:

 

  a. Clause (o) of Section 6(b) is hereby amended and restated in its entirety
to read as follows:

“(o) should our Tangible Net Worth (as customarily defined under GAAP but
including debt and any accrued but unpaid interest thereon in each case
expressly subordinated to you in writing) be (A) at anytime during the period
from July 31, 2005 through January 30, 2006, less than $1,000,000, (B) at
anytime during the period from January 31, 2006 through April 30, 2006, less
than $2,000,000 or (C) at anytime thereafter, less than $3,000,000;”

 

  b. Clause (p) of Section 6(b) is hereby amended and restated in its entirety
to read as follows:

“(p) should our Working Capital (as customarily defined under GAAP, but,
provided that debt and any accrued but unpaid interest thereon in each case
expressly subordinated to you in writing shall not be considered a current
liability) be (A) at anytime during the period from July 31, 2005 through
January 30, 2006, less than $1,000,000, (B) at anytime during the period from
January 31, 2006 through April 30, 2006, less than $2,000,000 or (C) at anytime
thereafter, less than $3,000,000.”

 

3. The Borrower represents that as of the date hereof (i) the Tangible Net Worth
of the Borrower was equal to or exceeded $2,000,000 and (ii) the Working Capital
of the Borrower was equal to or exceeded $2,000,000. The Borrower further
represents and warrants that as of the date hereof (x) each representation and
warranty of the Borrower set forth in the Factoring Agreement and all related
agreements is, and will be, true and accurate in all material respects as of the
date such representation or warranty was made or deemed made and (y) the
Borrower is, and will be, in compliance with each covenant (financial or
otherwise) set forth in the Factoring Agreement and all related agreements.

The Borrower agrees, acknowledges and affirms that all advances made under the
Factoring Agreement are payable upon demand and that the enumeration in this
waiver, consent and amendment letter, or in any other document relating to such
advances, of specific obligations and/or conditions to the availability of such
advances shall not be construed to qualify, define or otherwise limit Milberg’s
right, power or ability, at any time, to make demand for payment of the entire
outstanding principal of and interest due under the Factoring Agreement.

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The Borrower acknowledges and agrees that, except as specifically set forth
above, all terms and conditions of the Factoring Agreement remain unchanged and
that the Factoring Agreement remains in full force and effect. Subject to the
waiver, consent and amendments provided for herein, the Borrower hereby
ratifies, confirms and reaffirms all the terms and conditions in the Factoring
Agreement.

All security described in the Factoring Agreement and any related security
agreement entered into in connection therewith shall continue to secure all
indebtedness, liabilities and obligations of the Borrower to Milberg, and all
provisions, covenants and agreements contained in any related security agreement
are hereby confirmed, ratified and reaffirmed, and each such agreement is and
shall remain in full force and effect.

Hubert Guez hereby acknowledges, ratifies and reaffirms his guaranty in favor of
Milberg dated as of July 31, 2005.

*****

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[Signature Page to January 2006 Waiver, Consent and Amendment]

 

Very truly yours, MILBERG FACTORS, INC. By:  

/s/ William A. Zisfein

Name:   William A. Zisfein Title:   Senior V.P.

THE UNDERSIGNED EACH AGREE THAT THE TERMS AND CONDITIONS OF THE FOREGOING
WAIVER, CONSENT AND AMENDMENT ARE HEREBY AGREED TO AND ACCEPTED AS OF THE DATE
FIRST WRITTEN ABOVE.

 

Acknowledged, agreed to and accepted: CYGNE DESIGNS, INC. By:  

/s/ Roy E. Green

Name:   Roy E. Green Title:   Vice President - Finance

 

GUARANTOR:

/s/ Hubert Guez

HUBERT GUEZ