Exhibit 10.33

 

AMENDMENT NO. 8

 

TO

 

FINANCING AGREEMENT

 

THIS AMENDMENT NO. 8 (this “Amendment”) is entered into as of February 10, 2009,
by and among RAFAELLA APPAREL GROUP, INC., a Delaware corporation (“Borrower”),
VERRAZANO, INC., a New York corporation (“Verrazano”), HSBC BANK USA, NATIONAL
ASSOCIATION (“HSBC”) and the other financial institutions which are now or which
hereafter become a party hereto (each a “Lender” and collectively, the
“Lenders”) and HSBC, as agent for the Lenders (in such capacity, the “Agent”).

 

BACKGROUND

 

Borrower, Verrazano, Agent and Lenders are parties to a Financing Agreement
dated June 20, 2005 (as amended by Amendment No. 1 to Financing Agreement dated
as of March 31, 2006, Amendment No. 2 to Financing Agreement effective as of
December 31, 2006, Consent and Amendment No. 3 dated as of March 4, 2008,
Amendment No. 4 dated as of March 28, 2008, Amendment No. 5 to Financing
Agreement dated as of May 14, 2008, Amendment No. 6 to Financing Agreement, and
Amendment No. 7 to Financing Agreement dated as of December 16, 2008 and as
hereafter further amended, restated, supplemented or otherwise modified from
time to time, the “Financing Agreement”) pursuant to which Agent and Lenders
provide Borrower with certain financial accommodations.

 

Borrower has requested that Agent and Lenders amend certain provisions of the
Financing Agreement, and Agent and Lenders are willing to do so on the terms and
conditions hereafter set forth.

 

NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Agent and
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.                                       DEFINITIONS.  ALL CAPITALIZED TERMS NOT
OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE FINANCING
AGREEMENT.

 

2.                                       AMENDMENTS TO FINANCING AGREEMENT. 
SUBJECT TO SATISFACTION OF THE CONDITIONS PRECEDENT SET FORTH IN SECTION 3
BELOW, THE FINANCING AGREEMENT IS HEREBY AMENDED EFFECTIVE AS OF FEBRUARY 10,
2009 AS FOLLOWS:

 

(A)                                  THE DEFINITION OF THE TERM “AVAILABILITY
RESERVE” APPEARING IN SECTION 1.2 OF THE FINANCING AGREEMENT IS HEREBY AMENDED
AND RESTATED IN ITS ENTIRETY AS FOLLOWS:

 

“Availability Reserve” shall mean (a) $5,000,000 from April 1, 2006 through
May 31, 2008, (b) $10,000,000 from June 1, 2008 through October 31, 2008,
(c) $7,500,000 from November 1, 2008 through April 30, 2009 and (d) $10,000,000
from May 1, 2009 through June 20, 2010.

 

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(B)                                 SECTION 6.8(B) OF THE FINANCING AGREEMENT IS
HEREBY AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS:

 

(b)                                 Net Income.  Maintain (x) Net Income in
excess of $0 during each period of two consecutive fiscal quarters (on a rolling
basis) ending on September 30, 2008 and December 31, 2008, (y) negative Net
Income of not more than a loss of $750,000 during each period of two consecutive
fiscal quarters (on a rolling basis) ending on March 31, 2009 and June 30, 2009
and (z) Net Income in excess of $0 during each period of two consecutive fiscal
quarters (on a rolling basis) ending on or after September 30, 2009; provided,
further, for each period of two consecutive fiscal quarters (on a rolling basis)
ending on or after September 30, 2008, for purposes of determining compliance
with this Section 6.8(b), Net Income shall be calculated so that, to the extent
in calculating Net Income for such period Net Income was decreased by noncash
expenses consisting of (i) amortization for customer relationships and
non-compete agreements, (ii) original issue discount on the Senior Secured
Notes, (iii) deferred financing costs, and (iv) reduction in value of intangible
assets, the amounts which were deducted in calculating Net Income for such
period for the items described in clauses (i) through (iv) above shall be added
back to Net Income as calculated in accordance with GAAP.

 

3.                                       CONDITION OF EFFECTIVENESS.  THIS
AMENDMENT SHALL BECOME EFFECTIVE UPON SATISFACTION OF THE FOLLOWING CONDITIONS
PRECEDENT:

 

(A)                                  AGENT SHALL HAVE RECEIVED FOUR (4) COPIES
OF THIS AMENDMENT EXECUTED BY BORROWER, VERRAZANO, AGENT AND LENDERS.

 

(B)                                 AGENT SHALL HAVE RECEIVED AN ADMINISTRATIVE
FEE EQUAL TO $10,000 WHICH SHALL BE CHARGED BY AGENT TO BORROWER’S ACCOUNT AND
SHALL BE SHARED PRO RATA BY LENDERS BASED UPON THEIR RESPECTIVE COMMITMENT
PERCENTAGES.

 

(C)                                  ALL REASONABLE OUT-OF-POCKET COSTS AND
EXPENSES INCURRED BY AGENT IN CONNECTION WITH THIS AMENDMENT OR WITH THE
FINANCING AGREEMENT, INCLUDING WITHOUT LIMITATION ATTORNEYS FEES AND
DISBURSEMENTS, SHALL HAVE BEEN PAID BY BORROWER.

 

4.                                       REPRESENTATIONS AND WARRANTIES. 
BORROWER AND VERRAZANO EACH HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

 

(A)                                  THIS AMENDMENT AND THE FINANCING AGREEMENT,
AS AMENDED HEREBY, CONSTITUTE ITS LEGAL, VALID AND BINDING OBLIGATIONS AND ARE
ENFORCEABLE AGAINST IT IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.

 

(B)                                 UPON THE EFFECTIVENESS OF THIS AMENDMENT, IT
HEREBY REAFFIRMS, IN ALL MATERIAL RESPECTS, ALL REPRESENTATIONS, WARRANTIES AND
COVENANTS MADE IN THE FINANCING AGREEMENT ON AND AS OF THE DATE HEREOF EXCEPT: 
(I) TO THE EXTENT SUCH REPRESENTATION, WARRANTIES OR COVENANTS ARE LIMITED BY
THEIR TERMS TO A SPECIFIC DATE IN WHICH CASE THEY SHALL BE TRUE AND CORRECT IN
ALL MATERIAL RESPECTS AS OF SUCH DATE OR (II) FOR CHANGES IN THE NATURE OF ITS
BUSINESS OR

 

2

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OPERATIONS THAT MAY OCCUR AFTER THE CLOSING DATE IN THE ORDINARY COURSE OF
BUSINESS SO LONG AS AGENT HAS CONSENTED TO SUCH CHANGES OR SUCH CHANGES ARE NOT
IN VIOLATION OF ANY PROVISION OF THE FINANCING AGREEMENT OR ANY OTHER DOCUMENT.

 

(C)                                  NO EVENT OF DEFAULT OR DEFAULT HAS OCCURRED
AND IS CONTINUING OR WOULD EXIST AFTER GIVING EFFECT TO THIS AMENDMENT.

 

(D)                                 IT DOES NOT HAVE ANY DEFENSE, COUNTERCLAIM
OR OFFSET WITH RESPECT TO THE FINANCING AGREEMENT.

 

5.                                       EFFECT ON THE FINANCING AGREEMENT.

 

(A)                                  UPON THE EFFECTIVENESS OF SECTION 2 HEREOF,
EACH REFERENCE IN THE FINANCING AGREEMENT TO “THIS AGREEMENT,” “HEREUNDER,”
“HEREOF,” “HEREIN” OR WORDS OF LIKE IMPORT SHALL MEAN AND BE A REFERENCE TO THE
FINANCING AGREEMENT AS AMENDED HEREBY.

 

(B)                                 EXCEPT AS SPECIFICALLY AMENDED HEREIN, THE
FINANCING AGREEMENT, AND ALL OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS
EXECUTED AND/OR DELIVERED IN CONNECTION THEREWITH, SHALL REMAIN IN FULL FORCE
AND EFFECT, AND ARE HEREBY RATIFIED AND CONFIRMED.

 

(C)                                  THE EXECUTION, DELIVERY AND EFFECTIVENESS
OF THIS AMENDMENT SHALL NOT OPERATE AS A WAIVER OF ANY RIGHT, POWER OR REMEDY OF
AGENT OR LENDERS, NOR CONSTITUTE A WAIVER OF ANY PROVISION OF THE FINANCING
AGREEMENT, OR ANY OTHER DOCUMENTS, INSTRUMENTS OR AGREEMENTS EXECUTED AND/OR
DELIVERED UNDER OR IN CONNECTION THEREWITH.

 

6.                                       GOVERNING LAW.  THIS AMENDMENT SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

 

7.                                       HEADINGS.  SECTION HEADINGS IN THIS
AMENDMENT ARE INCLUDED HEREIN FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT
CONSTITUTE A PART OF THIS AMENDMENT FOR ANY OTHER PURPOSE.

 

8.                                       COUNTERPARTS; FACSIMILE.  THIS
AMENDMENT MAY BE EXECUTED BY THE PARTIES HERETO IN ONE OR MORE COUNTERPARTS,
EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ALL OF WHICH WHEN TAKEN TOGETHER
SHALL CONSTITUTE ONE AND THE SAME AGREEMENT.  ANY SIGNATURE DELIVERED BY A PARTY
BY FACSIMILE OR ELECTRONIC TRANSMISSION, INCLUDING VIA “PDF” FORMAT, SHALL BE
DEEMED TO BE AN ORIGINAL SIGNATURE HERETO.

 

3

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
first written above.

 

 

 

RAFAELLA APPAREL GROUP, INC., as Borrower

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

VERRAZANO, INC., as Guarantor

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

HSBC BANK USA, NATIONAL ASSOCIATION, as Agent and as a Lender

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

ISRAEL DISCOUNT BANK OF NEW YORK, as a Lender

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Signature Page to Amendment No.8

 

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