Exhibit 10.40

 

REAFFIRMATION OF TRADEMARK COLLATERAL SECURITY AGREEMENT

 

May 21, 2010

 

 

HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

 

Ladies and Gentlemen:

 

The undersigned executed and delivered to Agent (as hereafter defined) a
Trademark Collateral Security Agreement dated as of June 20, 2005 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Trademark
Collateral Security Agreement”) pursuant to which the undersigned, Rafaella
Apparel Group, Inc. (“Borrower”), a Delaware corporation, granted to Agent for
its benefit and the ratable benefit of Lenders a security interest in certain
Collateral (the “Grant”) including, without limitation, certain Trademarks.  The
Grant was made in order to secure the Obligations under that certain Financing
Agreement dated as of June 20, 2005 (as amended, restated, modified or
supplemented from time to time, the “Financing Agreement”) among Borrower,
Verrazano, Inc. (“Verrazano”), each other subsidiary of Borrower which becomes a
guarantor of the Obligations thereunder from time to time, the various financial
institutions which are a party thereto (each a “Lender” and collectively,
“Lenders”) and HSBC Bank USA, National Association (“HSBC”), as agent for
Lenders (HSBC in such capacity, “Agent”).  All capitalized terms not otherwise
defined herein shall have the meanings set forth in the Trademark Collateral
Security Agreement.

 

The undersigned hereby:

 

(a)                                  acknowledges that the Financing Agreement
is being amended and restated pursuant to the terms of that certain Amended and
Restated Financing Agreement, dated as of May 21, 2010 (the “Restated Financing
Agreement”), among Borrower, Verrazano, Lenders, the Term Lender (as defined in
the Restated Financing Agreement), Agent and other parties thereto and that this
Reaffirmation of Trademark Collateral Security Agreement is being given to
induce the Lenders, the Term Lender and Agent to enter into the Restated
Financing Agreement;

 

(b)                                 ratifies and confirms that (i) all of the
terms and conditions, representations and covenants contained in the Trademark
Collateral Security Agreement shall remain in full force and effect after giving
effect to the execution and effectiveness of the Restated Financing Agreement;
provided, however, that Schedule A to the Trademark Collateral Security
Agreement is hereby amended and restated as attached hereto; and (ii) the Grant
is for the benefit of the Agent, Lenders and the Term Lender to secure each Loan
Party’s Obligations under the Financing Agreement, the Restated Financing
Agreement and the Other Documents;

 

(c)                                  represents and warrants that no offsets,
counterclaims or defenses exist as of the date hereof with respect to the
undersigned’s obligations under the Trademark Collateral Security Agreement; and

 

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(d)                                 ratifies and confirms that references to the
phrase “Financing Agreement” in the Trademark Collateral Security Agreement
shall mean the Restated Financing Agreement, and that the Obligations under the
Financing Agreement, after giving effect to the Restated Financing Agreement,
remain secured by the security interests and pledges granted by the undersigned
under and pursuant to the terms of the Trademark Collateral Security Agreement,
as reaffirmed hereby.

 

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Very truly yours,

 

 

 

RAFAELLA APPAREL GROUP, INC., as
Borrower

 

 

 

 

 

By:

/s/ Lance D. Arneson

 

 

Name: Lance D. Arneson

 

 

Its: Chief Financial Officer

 

 

ACKNOWLEDGED AND AGREED:

 

 

HSBC BANK USA, NATIONAL ASSOCIATION, as Agent

 

 

 

 

 

By:

/s/ Lisa H. Augustus

 

 

Name: Lisa H. Augustus

 

 

Its: Vice President

 

 

Signature Page to Reaffirmation of Trademark Collateral Security Agreement

 

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