Document:

Exhibit 10.21

CONSENT AND AMENDMENT NO. 3

 

TO

 

FINANCING AGREEMENT

 

THIS CONSENT AND AMENDMENT NO. 3 (this “Amendment”) is entered into as
of March 4, 2008, 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 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 (1) consent to the formation of a
Hong Kong subsidiary to act as buying agent for Borrower, and (2) agree to
an amendment of the fiscal year of the Borrower, 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.               Amendment
to Financing Agreement.
Subject to satisfaction of the condition precedent set forth in Section 4
below, Section 7.13 of the Financing Agreement is hereby amended and
restated in its entirety as follows:

 

“7.13 Fiscal Year And Accounting Changes. Without the consent of Agent, change its
fiscal year from June 30 of each calendar year or make any material change
(i) in accounting treatment and reporting practices except as required by
GAAP, or (ii) in tax reporting treatment except as required by law.”

 

3.               Consent. Subject to the satisfaction of the
condition precedent set forth in Section 4 below, Agent and Lenders hereby
consent to Borrower establishing and capitalizing a Hong Kong subsidiary to act
as a buying agent in Hong Kong for Borrower, so long as (i) no Event of
Default shall exist under the Financing Agreement at the time such Subsidiary
is capitalized , (ii) Borrower does not capitalize the Hong Kong
subsidiary with more than $10,000, and (iii) the only payments to be made
to the Hong Kong subsidiary shall be for payments made in connection with the
Hong Kong subsidiary acting as buying agent for Borrower (other than payments
made to the Hong Kong Subsidiary to be disbursed to third parties in the
ordinary course of business), such payments not to exceed $3,000,000 per annum.

 

 

4.             Condition of Effectiveness. This Amendment shall become effective upon
receipt by Agent of four (4) copies of this Amendment executed by
Borrower, Verrazano, Agent and Lenders.

 

5.             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 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.

 

6.             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.

 

7.             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.

 

8.             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.

 

 

9.             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.

 

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

 

 

	
   

  	
  RAFAELLA
  APPAREL GROUP, INC., as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Chad J. Spooner

  
	
   

  	
   

  	
  Name:

  	
  CHAD
  J. SPOONER

  
	
   

  	
   

  	
  Title:

  	
  CFO

  

 

	
   

  	
  VERRAZANO,
  INC., as Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Chad J. Spooner

  
	
   

  	
   

  	
  Name:

  	
  CHAD
  J. SPOONER

  
	
   

  	
   

  	
  Title:

  	
  CFO

  

 

	
   

  	
  HSBC
  BANK USA, NATIONAL ASSOCIATION., as

  Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lisa H. Augustus

  
	
   

  	
   

  	
  Name:   Lisa
  H. Augustus

  
	
   

  	
   

  	
  Title:   Vice
  President

  

 

	
   

  	
  ISRAEL
  DISCOUNT BANK OF NEW YORK, as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  George Commander

  
	
   

  	
   

  	
  Name:

  	
  George
  Commander

  
	
   

  	
   

  	
  Title:

  	
  Sr.
  Vice President

  

 

 

	
   

  	
  By:

  	
   /s/
  Dina Tourloukis

  
	
   

  	
   

  	
  Name:

  	
  Dina
  Tourloukis

  
	
   

  	
   

  	
  Title:

  	
  Vice
  PresidentExhibit 10.22

 

AMENDMENT NO. 4

 

TO

 

FINANCING AGREEMENT

 

THIS
AMENDMENT NO. 4 (this “Amendment”) is entered into as of March 28, 2008, 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 2006, Amendment No. 2 to
Financing Agreement effective as of December 31, 2006, Consent and
Amendment No. 3 dated as of March      , 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 the Net Income financial covenant
contained in 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.               Amendment to Financing Agreement. Subject to
satisfaction of the conditions precedent set forth in Section 3 below, Section
6.8(b) of the Financing Agreement is hereby amended and restated in its
entirety as follows:

 

“(b) Net Income. Maintain (i) Net
Income in excess of $0 during each fiscal quarter ending on or after September 30,
2005 through and including September 30, 2006, (ii) Net Income during
each fiscal quarter ending on or after December 31, 2006 in excess of
($3,000,000) (i.e. not suffer a loss of greater than $3,000,000 in any fiscal
quarter) and (iii) Net Income in excess of $0 during each period of two
consecutive fiscal quarters (on a rolling basis) ending on or after December 31,
2006; provided, however, for the two consecutive fiscal quarters
ending on March 31, 2008, Net Income shall be in excess of ($2,000,000)
(i.e., for

 

 

such
two fiscal quarter period Borrower shall not suffer a loss of greater than $2,000,000.)”

 

3.             Condition of
Effectiveness. This Amendment shall become effective upon receipt
by Agent of four (4) copies of this Amendment executed by
Borrower, Verrazano, Agent and Lenders.

 

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 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.

 

2

 

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

 

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

 

 

	
   

  	
  RAFAELLA APPAREL GROUP,
  INC., as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Chad J. Spooner

  
	
   

  	
   

  	
  Name:

  	
  CHAD J. SPOONER

  
	
   

  	
   

  	
  Title:

  	
  CFO

  

 

	
   

  	
  VERRAZANO, INC., as
  Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Chad J. Spooner

  
	
   

  	
   

  	
  Name:

  	
  CHAD J. SPOONER

  
	
   

  	
   

  	
  Title:

  	
  CFO

  

 

	
   

  	
  HSBC BANK USA, N.A., as
  Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Lisa H. Augustus

  
	
   

  	
   

  	
  Name:   Lisa
  H. Augustus

  
	
   

  	
   

  	
  Title:   Vice
  President

  

 

	
   

  	
  ISRAEL DISCOUNT BANK OF
  NEW YORK, as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ George
  Commander

  
	
   

  	
   

  	
  Name:

  	
  George Commander

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

 

	
   

  	
  By:

  	
   /s/ Dina
  Tourloukis

  
	
   

  	
   

  	
  Name:

  	
  Dina Tourloukis

  
	
   

  	
   

  	
  Title:

  	
  Vice President

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