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


 

















 


(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.


 

















 


	
   

  	
  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