[EXECUTION COPY]
SECOND LIEN CREDIT AGREEMENT,
dated as of September 5, 2006,
among
HBI BRANDED APPAREL LIMITED, INC.,
as the Borrower,
HANESBRANDS INC.,
as the Company,
VARIOUS FINANCIAL INSTITUTIONS AND
OTHER PERSONS FROM TIME TO TIME
PARTY HERETO,
as the Lenders,
HSBC BANK USA, NATIONAL ASSOCIATION,
LASALLE BANK NATIONAL ASSOCIATION, and
BARCLAYS BANK PLC,
as the Co-Documentation Agents,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as the Co-Syndication Agents,
CITICORP USA, INC.,
as the Administrative Agent,
and
CITIBANK, N.A., as the Collateral Agent.
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as the Joint Lead Arrangers and Joint Bookrunners
*Portions of this document have been omitted pursuant to a Confidential
Treatment Request.

 

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TABLE OF CONTENTS

                              Page ARTICLE I DEFINITIONS AND ACCOUNTING TERMS  
  2  
 
  Section 1.1   Defined Terms     2  
 
  Section 1.2   Use of Defined Terms     28  
 
  Section 1.3   Cross-References     28  
 
  Section 1.4   Accounting and Financial Determinations     28   ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES     29  
 
  Section 2.1   Commitments     29  
 
  Section 2.2   Borrowing Procedures     29  
 
  Section 2.3   Continuation and Conversion Elections     30  
 
  Section 2.4   Funding     30  
 
  Section 2.5   Register; Notes     30   ARTICLE III REPAYMENTS, PREPAYMENTS,
INTEREST AND FEES     31  
 
  Section 3.1   Repayments and Prepayments; Application     31  
 
  Section 3.2   Interest Provisions     33  
 
  Section 3.3   Fees     34   ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
    34  
 
  Section 4.1   LIBO Rate Lending Unlawful     34  
 
  Section 4.2   Deposits Unavailable     35  
 
  Section 4.3   Increased LIBO Rate Loan Costs, etc     35  
 
  Section 4.4   Funding Losses     35  
 
  Section 4.5   Increased Capital Costs     36  
 
  Section 4.6   Taxes     36  
 
  Section 4.7   Payments, Computations; Proceeds of Collateral, etc     39  
 
  Section 4.8   Sharing of Payments     40  
 
  Section 4.9   Setoff     40  
 
  Section 4.10   Mitigation     41  
 
  Section 4.11   Removal of Lenders     41  
 
  Section 4.12   Limitation on Additional Amounts, etc     42   ARTICLE V
CONDITIONS TO LOANS     42  
 
  Section 5.1   Resolutions, etc     42  
 
  Section 5.2   Closing Date Certificate     43  
 
  Section 5.3   Consummation of Transaction     43  

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                              Page
 
  Section 5.4   Patriot Act Disclosures     43  
 
  Section 5.5   Delivery of Notes     43  
 
  Section 5.6   Financial Information, etc     43  
 
  Section 5.7   Compliance Certificate     44  
 
  Section 5.8   Guaranty     44  
 
  Section 5.9   Security Agreement; Intercreditor Agreement     44  
 
  Section 5.10   Intellectual Property Security Agreements     45  
 
  Section 5.11   Filing Agent, etc     45  
 
  Section 5.12   Insurance     45  
 
  Section 5.13   Opinions of Counsel     46  
 
  Section 5.14   Closing Fees, Expenses, etc     46  
 
  Section 5.15   Form 10     46  
 
  Section 5.16   Litigation     46  
 
  Section 5.17   Approval     46  
 
  Section 5.18   Debt Rating     46  
 
  Section 5.19   Satisfactory Legal Form     46  
 
  Section 5.20   Compliance with Warranties, No Default, etc     46  
 
  Section 5.21   Borrowing Request, etc     47   ARTICLE VI REPRESENTATIONS AND
WARRANTIES     47  
 
  Section 6.1   Organization, etc     47  
 
  Section 6.2   Due Authorization, Non-Contravention, etc     47  
 
  Section 6.3   Government Approval, Regulation, etc     48  
 
  Section 6.4   Validity, etc     48  
 
  Section 6.5   Financial Information     48  
 
  Section 6.6   No Material Adverse Change     48  
 
  Section 6.7   Litigation, Labor Controversies, etc     49  
 
  Section 6.8   Subsidiaries     49  
 
  Section 6.9   Ownership of Properties     49  
 
  Section 6.10   Taxes     49  
 
  Section 6.11   Pension and Welfare Plans     49  
 
  Section 6.12   Environmental Warranties     49  
 
  Section 6.13   Accuracy of Information     51  
 
  Section 6.14   Regulations U and X     51  

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                              Page
 
  Section 6.15   Compliance with Contracts, Laws, etc     51  
 
  Section 6.16   Solvency     51   ARTICLE VII COVENANTS     51  
 
  Section 7.1   Affirmative Covenants     51  
 
  Section 7.2   Negative Covenants     58   ARTICLE VIII EVENTS OF DEFAULT    
73  
 
  Section 8.1   Listing of Events of Default     73  
 
  Section 8.2   Action if Bankruptcy     75  
 
  Section 8.3   Action if Other Event of Default     75   ARTICLE IX    THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT; THE LEAD ARRANGERS, THE SYNDICATION
AGENT AND THE DOCUMENTATION AGENT   76  
 
  Section 9.1   Actions     76  
 
  Section 9.2   Funding Reliance, etc     76  
 
  Section 9.3   Exculpation     76  
 
  Section 9.4   Successor     77  
 
  Section 9.5   Loans by Citibank     77  
 
  Section 9.6   Credit Decisions     77  
 
  Section 9.7   Copies, etc     78  
 
  Section 9.8   Reliance by Agents     78  
 
  Section 9.9   Defaults     78  
 
  Section 9.10   Lead Arrangers, Syndication Agents and Documentation Agents    
78  
 
  Section 9.11   Posting of Approved Electronic Communications     79   ARTICLE
X MISCELLANEOUS PROVISIONS     80  
 
  Section 10.1   Waivers, Amendments, etc     80  
 
  Section 10.2   Notices; Time     81  
 
  Section 10.3   Payment of Costs and Expenses     82  
 
  Section 10.4   Indemnification     83  
 
  Section 10.5   Survival     84  
 
  Section 10.6   Severability     84  
 
  Section 10.7   Headings     84  
 
  Section 10.8   Execution in Counterparts, Effectiveness, etc     84  

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                              Page
 
  Section 10.9   Governing Law; Entire Agreement     84  
 
  Section 10.10   Successors and Assigns     85  
 
  Section 10.11   Sale and Transfer of Loans; Participations in Loans; Notes    
85  
 
  Section 10.12   Other Transactions     87  
 
  Section 10.13   Forum Selection and Consent to Jurisdiction     87  
 
  Section 10.14   Waiver of Jury Trial     88  
 
  Section 10.15   Patriot Act     88  
 
  Section 10.16   Counsel Representation     88  
 
  Section 10.17   Confidentiality     88  
 
  Section 10.18   Intercreditor Agreement     89  

         
SCHEDULE I
  —   Disclosure Schedule
SCHEDULE II
  —   Percentages; LIBOR Office; Domestic Office
 
       
EXHIBIT A
  —   Form of Note
EXHIBIT B
  —   Form of Borrowing Request
EXHIBIT C
  —   Form of Continuation/Conversion Notice
EXHIBIT D
  —   Form of Lender Assignment Agreement
EXHIBIT E
  —   Form of Compliance Certificate
EXHIBIT F
  —   Form of Guaranty
EXHIBIT G
  —   Form of Pledge and Security Agreement
EXHIBIT H
  —   Form of Intercreditor Agreement
EXHIBIT I
  —   Form of Closing Date Certificate

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SECOND LIEN CREDIT AGREEMENT
     THIS SECOND LIEN CREDIT AGREEMENT, dated as of September 5, 2006, is among
HBI BRANDED APPAREL LIMITED, INC., a Delaware corporation (the “Borrower”),
HANESBRANDS INC., a Maryland corporation (the “Company”), the various financial
institutions and other Persons from time to time party hereto (the “Lenders”),
HSBC BANK USA, NATIONAL ASSOCIATION, LASALLE BANK NATIONAL ASSOCIATION and
BARCLAYS BANK PLC, as the co-documentation agents (in such capacities, the
“Documentation Agents”), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
(“Merrill Lynch”) and MORGAN STANLEY SENIOR FUNDING, INC. (“Morgan Stanley”), as
the co-syndication agents (in such capacities, the “Syndication Agents”),
CITICORP USA, INC., as the administrative agent (in such capacity, the
“Administrative Agent”), CITIBANK, N.A., as the collateral agent (in such
capacity, the “Collateral Agent”), and MERRILL LYNCH and MORGAN STANLEY, as the
joint lead arrangers and joint bookrunners (in such capacities, the “Lead
Arrangers”).
W I T N E S S E T H:
     WHEREAS, Sara Lee Corporation, a Maryland corporation (“Sara Lee”) intends,
among other things, to (i) transfer all the assets and certain associated
liabilities it attributes to its branded apparel Americas/Asia business (the
“Contributed Business”) to the Company, (ii) sell certain trademarks and other
intellectual property related to the Contributed Business (the “IP Purchase”,
with such trademarks and other intellectual property being herein collectively
referred to as the “HBI IP”) to the Borrower, and (iii) distribute 100% of the
Company’s common stock to Sara Lee’s stockholders (the transfer of the
Contributed Business and such distribution being herein called the “Spin-Off”),
pursuant to which, among other things, (A) Sara Lee’s common stockholders will
receive, on a pro rata basis, a dividend of all of the issued and outstanding
shares of common stock of the Company and (B) concurrently with the consummation
of the Spin-Off and the IP Purchase, Sara Lee will receive a cash dividend from
the Company in the approximate amount of $2,400,000,000 (the “Dividend”);
     WHEREAS, for purposes of consummating the Spin-Off, the Dividend and the IP
Purchase, the Borrower and the Company intend to utilize the proceeds from
(i) the Loans, (ii) senior secured first lien loans in an aggregate principal
amount of $2,150,000,000 (the “First Lien Loans”) and (iii)(A) senior unsecured
notes issued by the Company (the “Senior Notes”) and/or (B) unsecured increasing
rate loans (the “Bridge Loans”) collectively resulting in aggregate gross
proceeds of $500,000,000; and
     WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to extend the Commitments and make Loans;
     NOW, THEREFORE, the parties hereto agree as follows.

 

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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
     SECTION 1.1 Defined Terms. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and plural forms thereof):
     “Acquired Permitted Capital Expenditure Amount” is defined in clause (a) of
Section 7.2.7.
     “Administrative Agent” is defined in the preamble and includes each other
Person appointed as the successor Administrative Agent pursuant to Section 9.4.
     “Affected Lender” is defined in Section 4.11.
     “Affiliate” of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. “Control” of a Person means the power, directly or indirectly, (i) to
vote 10% or more of the Capital Securities (on a fully diluted basis) of such
Person having ordinary voting power for the election of directors, managing
members or general partners (as applicable), or (ii) to direct or cause the
direction of the management and policies of such Person (whether by contract or
otherwise).
     “Agents” means, as the context may require, the Administrative Agent and
the Collateral Agent, collectively, or either of them individually.
     “Agreement” means, on any date, this Second Lien Credit Agreement as
originally in effect on the Closing Date and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified from time to
time and in effect on such date.
     “Alternate Base Rate” means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum (rounded upward, if necessary,
to the next highest 1/16 of 1%) equal to the higher of (i) the Base Rate in
effect on such day, and (ii) the Federal Funds Rate in effect on such day plus
1/2 of 1%. Changes in the rate of interest on that portion of any Loans
maintained as Base Rate Loans will take effect simultaneously with each change
in the Alternate Base Rate. The Administrative Agent will give notice promptly
to the Borrower and the Lenders of changes in the Alternate Base Rate; provided
that, the failure to give such notice shall not affect the Alternate Base Rate
in effect after such change.
     “Applicable Margin” means in the case of Loans maintained as (a) LIBO Rate
Loans, a percentage per annum equal to 3.75% and (b) Base Rate Loans, a
percentage per annum equal to 2.75%.
     “Applicable Percentage” means, at any time of determination, (i) with
respect to a mandatory prepayment in respect of Net Equity Proceeds pursuant to
clause (c) of Section 3.1.1, (A) 50.0%, if the Leverage Ratio set forth in the
Compliance Certificate most recently delivered by the Company to the
Administrative Agent was greater than or equal to 3.75:1, (B) 25.0%, if the
Leverage Ratio set forth in such Compliance Certificate was less than 3.75:1 but
greater than

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or equal to 3.00:1, and (C) 0%, if the Leverage Ratio set forth in such
Compliance Certificate was less than 3.00:1, and (ii) with respect to a
mandatory prepayment in respect of Excess Cash Flow pursuant to clause (e) of
Section 3.1.1, (A) 50.0%, if the Leverage Ratio set forth in the Compliance
Certificate most recently delivered by the Company to the Administrative Agent
was greater than or equal to 3.75:1, (B) 25.0%, if the Leverage Ratio set forth
in such Compliance Certificate was less than 3.75:1 but greater than or equal to
3.00:1, and (C) 0%, if the Leverage Ratio set forth in such Compliance
Certificate was less than 3.00:1.
     “Approved Foreign Bank” is defined in the definition of “Cash Equivalent
Investment”.
     “Approved Fund” means any Person (other than a natural Person) that (i) is
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course, and (ii) is
administered or managed by a Lender, an Affiliate of a Lender or a Person or an
Affiliate of a Person that administers or manages a Lender.
     “Authorized Officer” means, relative to any Obligor, the chief executive
officer, president, chief financial officer, treasurer, assistant treasurer,
secretary, assistant secretary and those of its other officers, general partners
or managing members (as applicable), in each case whose signatures and
incumbency shall have been certified to the Agents and the Lenders pursuant to
Section 5.1.1.
     “Base Rate” means, at any time, the rate published in the Wall Street
Journal as the “prime rate"(or equivalent) at such time.
     “Base Rate Loan” means a Loan denominated in Dollars bearing interest at a
fluctuating rate determined by reference to the Alternate Base Rate.
     “Borrower” is defined in the preamble.
     “Borrowing” means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by all Lenders required to make such
Loans on the same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.2.
     “Borrowing Request” means a Loan request and certificate duly executed by
an Authorized Officer of the Borrower substantially in the form of Exhibit B
hereto.
     “Branded Apparel Business” means, collectively, the HBI IP and the
Contributed Business.
     “Bridge Loan Administrative Agent” means the “Administrative Agent”
pursuant to, and as defined in, the Bridge Loan Documents, and any successor
thereto.
     “Bridge Loan Credit Agreement” means the Bridge Loan Credit Agreement,
dated as of the Closing Date, among the Company, the lenders from time to time
party thereto and the Bridge Loan Administrative Agent, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with this Agreement.

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     “Bridge Loan Documents” means the Bridge Loan Credit Agreement and the
related guarantees, notes and other agreements and instruments entered into in
connection with the Bridge Loan Credit Agreement, in each case as the same may
be amended, supplemented, amended and restated or otherwise modified from time
to time in accordance with this Agreement.
     “Bridge Loans” is defined in the second recital.
     “Business Day” means (i) any day which is neither a Saturday or Sunday nor
a legal holiday on which banks are authorized or required to be closed in New
York, New York and (ii) relative to the making, continuing, prepaying or
repaying of any LIBO Rate Loans, any day which is a Business Day described in
clause (i) above and on which dealings are carried on in the London interbank
eurodollar market.
     “CapEx Pull Forward Amount” is defined in clause (b) of Section 7.2.7.
     “Capital Expenditures” means, for any period, the aggregate amount of
(i) all expenditures of the Company and its Subsidiaries for fixed or capital
assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures and (ii) Capitalized Lease Liabilities
incurred by the Company and its Subsidiaries during such period; provided that
Capital Expenditures shall not include any such expenditures which constitute
any of the following, without duplication: (a) a Permitted Acquisition, (b) to
the extent permitted by this Agreement, capital expenditures consisting of Net
Disposition Proceeds or Net Casualty Proceeds not otherwise required to be used
to repay the Loans, (c) capital expenditures made utilizing Excluded Equity
Proceeds, (d) imputed interest capitalized during such period incurred in
connection with Capitalized Lease Liabilities not paid or payable in cash and
(e) any capital expenditure made in connection with the Transaction as a result
of the Company or any Subsidiary buying assets from Sara Lee. For the avoidance
of doubt (x) to the extent that any item is classified under clause (i) of this
definition and later classified under clause (ii) of this definition or could be
classified under either clause, it will only be required to be counted once for
purposes hereunder and (y) in the event the Company or any Subsidiary owns an
asset that was not used and is now being reused, no portion of the unused asset
shall be considered Capital Expenditures hereunder; provided that any
expenditure necessary in order to permit such asset to be reused shall be
included as a Capital Expenditure during the period that such expenditure
actually is made.
     “Capital Securities” means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued after the Closing Date.
     “Capitalized Lease Liabilities” means, with respect to any Person, all
monetary obligations of such Person and its Subsidiaries under any leasing or
similar arrangement which, in accordance with GAAP, should be classified as
capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.

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     “Cash Equivalent Investment” means, at any time:
     (a) any direct obligation of (or unconditionally guaranteed by) the United
States or a State thereof (or any agency or political subdivision thereof, to
the extent such obligations are supported by the full faith and credit of the
United States or a State thereof) maturing not more than one year after such
time;
     (b) commercial paper maturing not more than 270 days from the date of
issue, which is issued by (i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 or higher by S&P or P-1 or higher by Moody’s,
or (ii) any Lender (or its holding company);
     (c) any certificate of deposit, time deposit or bankers acceptance,
maturing not more than one year after its date of issuance, which is issued by
either (i) any bank organized under the laws of the United States (or any State
thereof) and which has (A) a credit rating of A2 or higher from Moody’s or A or
higher from S&P and (B) a combined capital and surplus greater than
$500,000,000, or (ii) any Lender;
     (d) any repurchase agreement having a term of 30 days or less entered into
with any Lender or any commercial banking institution satisfying the criteria
set forth in clause (c)(i) which (i) is secured by a fully perfected security
interest in any obligation of the type described in clause (a), and (ii) has a
market value at the time such repurchase agreement is entered into of not less
than 100% of the repurchase obligation of such commercial banking institution
thereunder;
     (e) with respect to any Foreign Subsidiary, non-Dollar denominated
(i) certificates of deposit of, bankers acceptances of, or time deposits with,
any commercial bank which is organized and existing under the laws of the
country in which such Person maintains its chief executive office or principal
place of business or is organized provided such country is a member of the
Organization for Economic Cooperation and Development, and which has a
short-term commercial paper rating from S&P of at least “A-1” or the equivalent
thereof or from Moody’s of at least “P-1” or the equivalent thereof (any such
bank being an “Approved Foreign Bank”) and maturing within one year of the date
of acquisition and (ii) equivalents of demand deposit accounts which are
maintained with an Approved Foreign Bank; or
     (f) readily marketable obligations issued or directly and fully guaranteed
or insured by the government or any agency or instrumentality of any member
nation of the European Union whose legal tender is the Euro and which are
denominated in Euros or any other foreign currency comparable in credit quality
and tenor to those referred to above and customarily used by corporations for
cash management purposes in any jurisdiction outside the United States to the
extent reasonably required in connection with any business conducted by any
Foreign Subsidiary organized in such jurisdiction, having (i) one of the three
highest ratings from either Moody’s or S&P and (ii) maturities of not more than
one year from the date of acquisition thereof; provided that the full faith and
credit of any such member nation of the European Union is pledged in support
thereof.

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     “Cash Restructuring Charges” is defined in the definition of “EBITDA.”
     “Cash Spin-Off Charges” is defined in the definition of “EBITDA.”
     “Casualty Event” means the damage, destruction or condemnation, as the case
may be, of property of any Person or any of its Subsidiaries.
     “CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
     “CERCLIS” means the Comprehensive Environmental Response Compensation
Liability Information System List.
     “Change in Control” means
     (a) any person or group (within the meaning of Sections 13(d) and 14(d)
under the Exchange Act) shall become the ultimate “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
Capital Securities representing more than 35% of the Capital Securities of the
Company on a fully diluted basis;
     (b) during any period of 24 consecutive months, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or
     (c) the occurrence of any “Change of Control” (or similar term) under (and
as defined in) any First Lien Loan Document, Bridge Loan Document or Senior Note
Document.
     “Citibank” means, as the context may require, Citicorp USA and CitiNA,
collectively, or either of them, individually.
     “Citicorp USA” means Citicorp USA, Inc., in its individual capacity, and
any successor thereto by merger, consolidation or otherwise.
     “CitiNA” means Citibank, N.A., in its individual capacity, and any
successor thereto by merger, consolidation or otherwise.
     “Closing Date Certificate” means the closing date certificate executed and
delivered by an Authorized Officer of the Borrower and the Company substantially
in the form of Exhibit I hereto.
     “Closing Date” means the date of the making of the Loans hereunder.

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     “Code” means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
     “Collateral Agent” is defined in the preamble and includes each other
Person appointed as successor Collateral Agent pursuant to Section 9.4.
     “Commitment” means, relative to any Lender, such Lender’s obligation to
make Loans pursuant to Section 2.1.1.
     “Commitment Amount” means, on any date, $450,000,000.
     “Commitment Termination Date” means the earliest of
     (a) October 15, 2006 (if the Loans have not been made on or prior to such
date); and
     (b) the Closing Date (immediately after the making of the Loans on such
date).
     Upon the occurrence of any event described above, the Commitments shall
automatically terminate without any further action by any party hereto.
     “Communications” is defined in clause (a) of Section 9.11.
     “Company” is defined in the preamble.
     “Compliance Certificate” means a certificate duly completed and executed by
an Authorized Officer of the Company, substantially in the form of Exhibit E
hereto.
     “Contingent Liability” means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person. The amount of any Person’s
obligation under any Contingent Liability shall (subject to any limitation with
respect thereto) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
     “Continuation/Conversion Notice” means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
     “Contributed Business” is defined in the first recital.
     “Controlled Group” means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under

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common control which, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.
     “Copyright Security Agreement” means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
the Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
     “Default” means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
     “Defaulting Lender” means any Lender that (i) refuses (which refusal has
not been retracted prior to an Eligible Assignee agreeing to replace such Lender
as a “Lender” hereunder) or has failed to make available its portion of any
Borrowing or (ii) has notified in writing the Borrower or the Administrative
Agent that such Lender does not intend to comply with its obligations under
Section 2.1.
     “Disclosure Schedule” means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with the written consent
of, in the case of non-material modification, the Administrative Agent and, in
the case of material modifications the Required Lenders.
     “Disposition” (or similar words such as “Dispose”) means any sale,
transfer, lease (as lessor), contribution or other conveyance (including by way
of merger) of, or the granting of options, warrants or other rights to, any of
the Company’s or its Subsidiaries’ assets (including accounts receivable and
Capital Securities of Subsidiaries) to any other Person in a single transaction
or series of transactions other than (i) to another Obligor, (ii) by a Foreign
Subsidiary to any other Foreign Subsidiary or (iii) by a Receivables Subsidiary
to any other Person.
     “Dividend” is defined in the first recital.
     “Documentation Agents” is defined in the preamble.
     “Dollar” and the sign “$” mean lawful money of the United States.
     “Domestic Office” means the office of a Lender designated as its “Domestic
Office” on Schedule II hereto or in a Lender Assignment Agreement, or such other
office within the United States as may be designated from time to time by notice
from such Lender to the Administrative Agent and the Borrower.
     “EBITDA” means, for any applicable period, the sum of
     (a) Net Income, plus
     (b) to the extent deducted in determining Net Income, the sum of
(i) amounts attributable to amortization (including amortization of goodwill and
other intangible assets), (ii) Federal, state, local and foreign income
withholding, franchise, state single business unitary and similar Tax expense,
(iii) Interest Expense, (iv) depreciation of assets, (v) all non-cash charges,
including all non-cash charges associated with

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announced restructurings, whether announced previously or in the future (such
non-cash restructuring charges being “Non-Cash Restructuring Charges”), (vi) net
cash charges associated with or related to any contemplated restructurings (such
cost restructuring charges being “Cash Restructuring Charges”) in an aggregate
amount not to exceed, in any Fiscal Year, the Permitted Cash Restructuring
Charge Amount for such Fiscal Year, (vii) net cash restructuring charges
associated with or related to the Spin-Off (such cost restructuring charges
being “Cash Spin-Off Charges”) in an aggregate amount not to exceed, in any
Fiscal Year, the Permitted Cash Spin-Off Charge Amount for such Fiscal Year,
(viii) all amounts in respect of extraordinary losses, (ix) non-cash
compensation expense, or other non-cash expenses or charges, arising from the
sale of stock, the granting of stock options, the granting of stock appreciation
rights and similar arrangements (including any repricing, amendment,
modification, substitution or change of any such stock, stock option, stock
appreciation rights or similar arrangements), (x) any financial advisory fees,
accounting fees, legal fees and other similar advisory and consulting fees, cash
charges in respect of strategic market reviews, management bonuses and early
retirement of Indebtedness, and related out-of-pocket expenses incurred by the
Company or any of its Subsidiaries as a result of the Transaction, including
fees and expenses in connection with the issuance, redemption or exchange of the
Bridge Loans, all determined in accordance with GAAP, (xi) non-cash or
unrealized losses on agreements with respect to Hedging Obligations and (xii) to
the extent non-recurring and not capitalized, any financial advisory fees,
accounting fees, legal fees and similar advisory and consulting fees and related
costs and expenses of the Company and its Subsidiaries incurred as a result of
Permitted Acquisitions, Investments, Dispositions permitted hereunder and the
issuance of Capital Securities or Indebtedness permitted hereunder, all
determined in accordance with GAAP and in each case eliminating any increase or
decrease in income resulting from non-cash accounting adjustments made in
connection with the related Permitted Acquisition or Dispositions, (xiii) to the
extent the related loss in not added back pursuant to clause (c), all proceeds
of business interruption insurance policies, (xiv) expenses incurred by the
Company or any Subsidiary to the extent reimbursed in cash by a third party, and
(xv) extraordinary, unusual or non-recurring cash charges not to exceed
$10,000,000 in any Fiscal Year, minus
     (c) to the extent included in determining such Net Income, the sum of
(i) all amounts in respect of extraordinary gains or extraordinary losses,
(ii) non-cash gains on agreements with respect to Hedging Obligations,
(iii) reversals (in whole or in part) of any restructuring charges previously
treated as Non-Cash Restructuring Charges in any prior period and (iv) non-cash
items increasing such Net Income for such period, other than (A) the accrual of
revenue consistent with past practice and (B) the reversal in such period of an
accrual of, or cash reserve for, cash expenses in a prior period, to the extent
such accrual or reserve did not increase EBITDA in a prior period.
     “Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender,
(iii) an Approved Fund or (iv) any other Person (other than an Ineligible
Assignee).
     “Environmental Laws” means all applicable federal, state or local statutes,
laws, ordinances, codes, rules, regulations and legally binding guidelines
(including consent decrees

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and administrative orders) relating to protection of public health and safety
from environmental hazards and protection of the environment.
     “Equity Equivalents” means with respect to any Person any rights, warrants,
options, convertible securities, exchangeable securities, indebtedness or other
rights, in each case exercisable for or convertible or exchangeable into,
directly or indirectly, Capital Securities of such Person or securities
exercisable for or convertible or exchangeable into Capital Securities of such
Person, whether at the time of issuance or upon the passage of time or the
occurrence of some future event.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
     “European TM SPV” means Playtex Bath LLC, a Delaware limited liability
company.
     “Event of Default” is defined in Section 8.1.
     “Excess Cash Flow” means, for any Fiscal Year, the excess (if any), of
     (a) EBITDA for such Fiscal Year
     minus
     (b) the sum (for such Fiscal Year) of (i) Interest Expense actually paid in
cash by the Company and its Subsidiaries, (ii) scheduled principal repayments
with respect to the permanent reduction of Indebtedness, to the extent actually
made and permitted to be made hereunder, (iii) all Federal, state, local and
foreign income withholding, franchise, state single business unitary and similar
Taxes actually paid in cash or payable (only to the extent related to Taxes
associated with such Fiscal Year) by the Company and its Subsidiaries,
(iv) Capital Expenditures to the extent (x) actually made by the Company and its
Subsidiaries in such Fiscal Year or (y) committed to be made by the Company and
its Subsidiaries and that are permitted to be carried forward to the next
succeeding Fiscal Year pursuant to Section 7.2.7; provided that the amounts
deducted from Excess Cash Flow pursuant to preceding clause (y) shall not
thereafter be deducted in the determination of Excess Cash Flow for the Fiscal
Year during which such payments were actually made, (v) the portion of the
purchase price paid in cash with respect to Permitted Acquisitions to the extent
such Permitted Acquisition was made in connection with the Company’s offshore
migration of its supply chain, (vi) cash Investments permitted to be made in
Foreign Supply Chain Entities, (vii) to the extent permitted to be included in
the calculation of EBITDA for such Fiscal Year, the amount of Cash Restructuring
Charges and Cash Spin-Off Charges actually so included in such calculation and
(viii) without duplication to any amounts deducted in preceding clauses
(i) through (vii), all items added back to EBITDA pursuant to clause (b) of the
definition thereof that represent amounts actually paid in cash.
     “Exemption Certificate” is defined in clause (e) of Section 4.6.

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     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Excluded Contracts” means the intellectual property rights, licenses,
leases and other agreements set forth in Item 1.2 of the Disclosure Schedule.
     “Excluded Equity Proceeds Amount” means with respect to the sale or
issuance of Capital Securities of the Company, an amount equal to the proceeds
(net of all fees, commissions, disbursements, costs and expenses incurred in
connection therewith) thereof which are utilized for Capital Expenditures or
Permitted Acquisitions less the amount of such proceeds which have been
previously used for such purposes.
     “Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal for each day during such period to (i) the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or (ii) if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
     “Fee Letter” means the confidential letter, dated July 24, 2006, among
Merrill Lynch Capital Corporation, Morgan Stanley and the Company.
     “Filing Agent” is defined in Section 5.1.11.
     “Filing Statements” is defined in Section 5.1.11.
     “First Lien Administrative Agent” means the “Administrative Agent” pursuant
to, and as defined in, the First Lien Loan Documents, and any successor thereto.
     “First Lien Collateral Agent” means the “Collateral Agent” pursuant to, and
as defined in, the First Lien Loan Documents, and any successor thereto.
     “First Lien Credit Agreement” means the First Lien Credit Agreement, dated
as of the Closing Date, among the Company, the lenders from time to time party
thereto, the First Lien Collateral Agent, the First Lien Administrative Agent
and the various other agents and lead arrangers party thereto, as the same may
be amended, supplemented, amended and restated or otherwise modified from time
to time in accordance with this Agreement.
     “First Lien Loan Documents” means the First Lien Credit Agreement and the
related guarantees, pledge agreements, security agreements, mortgages, notes and
other agreements and instruments entered into in connection with the First Lien
Credit Agreement, in each case as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with this
Agreement.
     “First Lien Loans” is defined in the second recital.

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     “First Lien Obligations” means “Obligations” as defined in the First Lien
Credit Agreement.
     “First Lien Termination Date” means the “Termination Date” as defined in
the First Lien Credit Agreement.
     “Fiscal Quarter” means a quarter ending on the Saturday nearest to the last
day of March, June, September or December.
     “Fiscal Year” means any period of fifty-two or fifty-three consecutive
calendar weeks ending on the Saturday nearest to the last day of June;
references to a Fiscal Year with a number corresponding to any calendar year
(e.g., the “2006 Fiscal Year”) refer to the Fiscal Year ending on the Saturday
nearest to the last day of June of such calendar year; provided that in the
event that the Company gives notice to the Administrative Agent that it intends
to change its Fiscal Year, Fiscal Year will mean any period of fifty-two or
fifty-three consecutive calendar weeks or twelve consecutive calendar months
ending on the date set forth in such notice.
     “Foreign Pledge Agreement” means any supplemental pledge agreement governed
by the laws of a jurisdiction other than the United States or a State thereof
executed and delivered by the Company or any of its Subsidiaries pursuant to the
terms of this Agreement, in form and substance reasonably satisfactory to the
Lead Arrangers, as necessary under the laws of organization or incorporation of
a Foreign Subsidiary to further protect or perfect the Lien on and security
interest in any Capital Securities issued by such Foreign Subsidiary
constituting Collateral (as defined in the Security Agreement).
     “Foreign Subsidiary” means any Subsidiary that is not a U.S. Subsidiary or
a Receivables Subsidiary.
     “Foreign Supply Chain Entity” means (i) a Person listed on Item 1.1 of the
Disclosure Schedule and (ii) any other Person (a) that is not organized or
incorporated under the laws of the United States, (b) the Capital Securities of
which are owned by the Company or any of its Subsidiaries and another Person who
is not the Company or any Subsidiary (other than a third party represented by
any director’s qualifying shares or investments by foreign nationals mandated by
applicable laws), (c) that is created in connection with the Company’s offshore
migration of its supply chain and (d) any Investments in such Person are to be
made pursuant to clause (e) of Section 7.2.5 or clause (f) of Section 7.2.2;
provided that the Company may, upon notice to the Administrative Agent,
redesignate any Person who was, before such redesignation, a Foreign Supply
Chain Entity as a Foreign Subsidiary and at such time such Foreign Supply Chain
Entity will be treated as a Foreign Subsidiary for all purposes hereunder.
     “F.R.S. Board” means the Board of Governors of the Federal Reserve System
or any successor thereto.
     “GAAP” is defined in Section 1.4.
     “Governmental Authority” means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive,

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legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
     “Guaranty” means the guaranty executed and delivered by an Authorized
Officer of the Company and each U.S. Subsidiary (other than the Borrower)
pursuant to the terms of this Agreement, substantially in the form of Exhibit F
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
     “Hazardous Material” means (i) any “hazardous substance”, as defined by
CERCLA, (ii) any “hazardous waste”, as defined by the Resource Conservation and
Recovery Act, as amended, or (iii) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance (including any petroleum
product) within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended.
     “HBI IP” is defined in the first recital.
     “Hedging Obligations” means, with respect to any Person, all liabilities of
such Person under foreign exchange contracts, commodity hedging agreements,
currency exchange agreements, interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.
     “herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in
any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
     “Impermissible Qualification” means any qualification or exception to the
opinion or certification of any independent public accountant as to any
financial statement of the Company (i) which is of a “going concern” or similar
nature, (ii) which relates to the limited scope in any material respect of
examination of matters relevant to such financial statement, or (iii) which
relates to the treatment or classification of any item in such financial
statement (excluding treatment or classification changes which are the result of
changes in GAAP or the interpretation of GAAP) and which, as a condition to its
removal, would require an adjustment to such item the effect of which would be
to cause the Company to be in Default.
     “including” and “include” means including without limiting the generality
of any description preceding such term, and, for purposes of each Loan Document,
the parties hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
     “Indebtedness” of any Person means, (i) all obligations of such Person for
borrowed money or advances and all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (ii) all monetary obligations,
contingent or otherwise, relative to the face amount of all letters of credit,
whether or not drawn, and banker’s acceptances issued for the account of such
Person, (iii) all Capitalized Lease Liabilities of such Person, (iv) for
purposes of

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Section 8.1.5 only, net Hedging Obligations of such Person, (v) whether or not
so included as liabilities in accordance with GAAP, all obligations of such
Person to pay the deferred purchase price of property or services (excluding
trade accounts payable and accrued expenses in the ordinary course of business
which are not overdue for a period of more than 90 days or, if overdue for more
than 90 days, as to which a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of such Person), (vi) indebtedness
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on property owned or being
acquired by such Person (including indebtedness arising under conditional sales
or other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse (provided that in the
event such indebtedness is limited in recourse solely to the property subject to
such Lien, for the purposes of this Agreement the amount of such indebtedness
shall not exceed the greater of the book value or the fair market value (as
determined in good faith by the Borrower’s board of directors) of the property
subject to such Lien), (vii) monetary obligations arising under Synthetic
Leases, (viii) the full outstanding balance of trade receivables, notes or other
instruments sold with full recourse (and the portion thereof subject to
potential recourse, if sold with limited recourse), other than in any such case
any thereof sold solely for purposes of collection of delinquent accounts and
other than in connection with any Permitted Securitization, (ix) all obligations
(other than intercompany obligations) of such Person pursuant to any Permitted
Securitization (other than Standard Securitization Undertakings), and (x) all
Contingent Liabilities of such Person in respect of any of the foregoing. The
Indebtedness of any Person shall include the Indebtedness of any other Person
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefore as a result of such Person’s ownership
interest in or other relationship with such Person, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefore.
     “Indemnified Liabilities” is defined in Section 10.4.
     “Indemnified Parties” is defined in Section 10.4.
     “Ineligible Assignee” means a natural Person, the Company, any Affiliate of
the Borrower or any other Person taking direction from, or working in concert
with, the Borrower or any of the Borrower’s Affiliates.
     “Information” is defined in Section 10.18.
     “Interco Subordination Agreement” means a Subordination Agreement, in form
and substance satisfactory to the Lead Arrangers, executed and delivered by two
or more Obligors pursuant to the terms of this Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
     “Intercreditor Agreement” means the Intercreditor Agreement, dated as of
the Closing Date, executed and delivered by each Person party thereto,
substantially in the form of Exhibit H hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.

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     “Interest Coverage Ratio” means, as of the last day of any Fiscal Quarter,
the ratio computed for the period consisting of such Fiscal Quarter and each of
the three immediately preceding Fiscal Quarters of:
     (a) EBITDA (for all such Fiscal Quarters)
     to
     (b) the sum (for all such Fiscal Quarters) of Interest Expense;
provided that, for purposes of calculating (i) Interest Expense with respect to
the calculation of the Interest Coverage Ratio with respect to the four
consecutive Fiscal Quarter period ending (A) nearest to December 31, 2006,
Interest Expense shall be actual Interest Expense for the Fiscal Quarter ending
nearest to December 31, 2006 multiplied by four, (B) nearest to March 31, 2007,
Interest Expense shall be actual Interest Expense for the two Fiscal Quarter
period ending nearest to March 31, 2007 multiplied by two, and (C) nearest to
June 30, 2007, Interest Expense shall be actual Interest Expense for the three
Fiscal Quarter period ending nearest to June 30, 2007 multiplied by one and
one-third and (ii) EBITDA with respect to the calculation of the Interest
Coverage such calculation shall be made in accordance with the proviso to the
definition of “Leverage Ratio.”
     “Interest Expense” means, for any applicable period, the aggregate interest
expense (both, without duplication, when accrued or paid and net of interest
income paid during such period to the Company and its Subsidiaries) of the
Company and its Subsidiaries for such applicable period, including the portion
of any payments made in respect of Capitalized Lease Liabilities allocable to
interest expense.
     “Interest Period” means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Sections 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three or six months and, if available to all Lenders, one or two
weeks or 9 or 12 months thereafter (or, if any such month has no numerically
corresponding day, on the last Business Day of such month), as the Borrower may
select in its relevant notice pursuant to Sections 2.3 or 2.4; provided that,
     (a) the Borrower shall not be permitted to select Interest Periods to be in
effect at any one time which have expiration dates occurring on more than twelve
different dates; and
     (b) if such Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next following Business Day
(unless such next following Business Day is the first Business Day of a calendar
month, in which case such Interest Period shall end on the Business Day next
preceding such numerically corresponding day).
     “Investment” means, relative to any Person, (i) any loan, advance or
extension of credit made by such Person to any other Person, including the
purchase by such Person of any bonds, notes, debentures or other debt securities
of any other Person, and (ii) any Capital Securities held

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by such Person in any other Person. The amount of any Investment shall be the
original principal or capital amount thereof less all returns of principal or
equity thereon and shall, if made by the transfer or exchange of property other
than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property at the time of such
Investment.
     “IP Purchase” is defined in the first recital.
     “Lead Arrangers” is defined in the preamble.
     “Lender Assignment Agreement” means an assignment agreement substantially
in the form of Exhibit D hereto.
     “Lenders” is defined in the preamble.
     “Lender’s Environmental Liability” means any and all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages (including consequential damages), disbursements or
expenses of any kind or nature whatsoever (including reasonable attorneys’ fees
at trial and appellate levels and experts’ fees and disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against the Administrative Agent or any Lender or any of
such Person’s Affiliates, shareholders, directors, officers, employees, and
agents in connection with or arising from:
     (a) any Hazardous Material on, in, under or affecting all or any portion of
any property of the Company or any of its Subsidiaries, the groundwater
thereunder, or any surrounding areas thereof to the extent caused by Releases
from the Company’s or any of its Subsidiaries’ or any of their respective
predecessors’ properties;
     (b) any misrepresentation, inaccuracy or breach of any warranty, contained
or referred to in Section 6.12;
     (c) any violation or claim of violation by the Company or any of its
Subsidiaries of any Environmental Laws; or
     (d) the imposition of any lien for damages caused by or the recovery of any
costs for the cleanup, release or threatened release of Hazardous Material by
the Company or any of its Subsidiaries, or in connection with any property owned
or formerly owned by the Company or any of its Subsidiaries.
     “Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio
of
     (a) Total Debt outstanding on the last day of such Fiscal Quarter
     to
     (b) EBITDA computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters;

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provided that, for purposes of calculating the Leverage Ratio with respect to
the four consecutive Fiscal Quarter period ending (i) nearest to December 31,
2006, EBITDA shall be actual EBITDA for the Fiscal Quarter ending nearest to
December 31, 2006 multiplied by four; (ii) nearest to March 31, 2007, EBITDA
shall be actual EBITDA for the two Fiscal Quarter period ending nearest to
March 31, 2007 multiplied by two; and (iii) nearest to June 30, 2007, EBITDA
shall be actual EBITDA for the three Fiscal Quarter period ending nearest to
June 30, 2007 multiplied by one and one-third.
     “LIBO Rate” means, relative to any Interest Period, the rate of interest
equal to the average (rounded upwards, if necessary, to the nearest 1/16 of 1%)
of the rates per annum at which Dollar deposits in immediately available funds
are offered to the Administrative Agent’s LIBOR Office in the London interbank
market as at or about 11:00 a.m. London, England time two Business Days prior to
the beginning of such Interest Period for delivery on the first day of such
Interest Period, and in an amount approximately equal to the amount of the
Administrative Agent’s LIBO Rate Loan and for a period approximately equal to
such Interest Period.
     “LIBO Rate Loan” means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
     “LIBO Rate (Reserve Adjusted)” means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:

                 
 
  LIBO Rate   =   LIBO Rate    
 
               
 
  (Reserve Adjusted)       1.00 - LIBOR Reserve Percentage    

The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect, and the applicable rates furnished to and received by the
Administrative Agent, two Business Days before the first day of such Interest
Period.
     “LIBOR Office” means the office of a Lender designated as its “LIBOR
Office” on Schedule II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Borrower
and the Administrative Agent, whether or not outside the United States, which
shall be making or maintaining the LIBO Rate Loans of such Lender.
     “LIBOR Reserve Percentage” means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including “Eurocurrency Liabilities”, as

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currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
     “Lien” means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever.
     “Loan Documents” means, collectively, this Agreement, the Notes, the Fee
Letter, the Intercreditor Agreement, the Security Agreement, each Mortgage, each
Foreign Pledge Agreement, each other agreement pursuant to which the Collateral
Agent is granted by the Company or its Subsidiaries a Lien to secure the
Obligations, the Guaranty and each other agreement, certificate, document or
instrument delivered in connection with any Loan Document, whether or not
specifically mentioned herein or therein.
     “Loans” is defined in Section 2.1.1.
     “Material Adverse Effect” means a material adverse effect on (i) the
business, financial condition, operations, performance, or assets of the Company
or the Company and its Subsidiaries (other than a Receivables Subsidiary) taken
as a whole, (ii) the rights and remedies of any Secured Party under any Loan
Document or (iii) the ability of any Obligor to perform when due its Obligations
under any Loan Document.
     “Merrill Lynch” is defined in the preamble and includes any successor
Person thereto by merger, consolidation or otherwise.
     “Moody’s” means Moody’s Investors Service, Inc. and its successors.
     “Morgan Stanley” is defined in the preamble and includes any successor
Person thereto by merger, consolidation or otherwise.
     “Mortgage” means each mortgage, deed of trust or agreement executed and
delivered by any Obligor in favor of the Administrative Agent for the benefit of
the Secured Parties pursuant to the requirements of this Agreement in form and
substance reasonably satisfactory to the Lead Arrangers, under which a Lien is
granted on such real property and fixtures described therein, in each case as
amended, supplemented, amended and restated or otherwise modified from time to
time.
     “Mortgaged Property” means each parcel of real property owned by an Obligor
in the United States on the Closing Date with a fair market value (as determined
by the Company in good faith) in excess of $2,000,000 on the Closing Date.
     “Net Casualty Proceeds” means, with respect to any Casualty Event, the
amount of any insurance proceeds or condemnation awards received by the Company
or any of its U.S. Subsidiaries in connection with such Casualty Event (net of
all collection or similar expenses related thereto), but excluding any proceeds
or awards required to be paid to a creditor (other than the Lenders) which holds
a first priority Lien permitted by clause (d) of Section 7.2.3 on the property
which is the subject of such Casualty Event.

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     “Net Debt Proceeds” means, with respect to the sale or issuance by the
Company or any of its U.S. Subsidiaries (other than a Receivables Subsidiary) of
any Indebtedness to any other Person after the Closing Date pursuant to clause
(b)(ii) of Section 7.2.2 or which is not expressly permitted by Section 7.2.2,
the excess of (i) the gross cash proceeds actually received by such Person from
such sale or issuance, over (ii) all arranging or underwriting discounts, fees,
costs, expenses and commissions, and all legal, investment banking, brokerage
and accounting and other professional fees, sales commissions and disbursements
and other closing costs and expenses actually incurred in connection with such
sale or issuance other than any such fees, discounts, commissions or
disbursements paid to Affiliates of the Borrower or any such Subsidiary in
connection therewith.
     “Net Disposition Proceeds” means the gross cash proceeds received by the
Company or its U.S. Subsidiaries from any Disposition pursuant to clauses (j)
(l), (m) or (n) of Section 7.2.11 or Section 7.2.15 and any cash payment
received in respect of promissory notes or other non-cash consideration
delivered to the Company or its U.S. Subsidiaries in respect thereof, minus the
sum of (i) all legal, investment banking, brokerage, accounting and other
professional fees, costs, sales commissions and expenses and other closing
costs, fees and expenses incurred in connection with such Disposition, (ii) all
taxes actually paid or estimated by the Company to be payable in cash in
connection with such Disposition, (iii) payments made by the Company or its
Subsidiaries to retire Indebtedness (other than the Loans) where payment of such
Indebtedness is required in connection with such Disposition and (iv) any
liability reserves established by the Company or such U.S. Subsidiary in respect
of such Disposition in accordance with GAAP; provided that, if the amount of any
estimated taxes pursuant to clause (ii) exceeds the amount of taxes actually
required to be paid in cash in respect of such Disposition, the aggregate amount
of such excess shall constitute Net Disposition Proceeds and to the extent any
such reserves described in clause (iv) are not fully used at the end of any
applicable period for which such reserves were established, such unused portion
of such reserves shall constitute Net Disposition Proceeds.
     “Net Equity Proceeds” means with respect to the sale or issuance after the
Closing Date by the Company to any Person of its Capital Securities, warrants or
options or the exercise of any such warrants or options (other than such Capital
Securities, warrants and options, in each case with respect to common or
ordinary equity interests, issued (i) by the Company pursuant to the Company’s
equity incentive plans, (ii) to qualified employees, officers and directors as
compensation or to qualify employees, officers and directors as required by
applicable law, (iii) that constitute an Excluded Equity Proceeds Amount or
(iv) by the Company to a wholly owned Subsidiary of the Company), the excess of
(A) the gross cash proceeds received by such Person from such sale, exercise or
issuance, over (B) the sum of (i) all arranging, underwriting commissions and
legal, investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements and other closing costs and expenses
actually incurred in connection with such sale or issuance which have not been
paid to Affiliates of the Company in connection therewith and (ii) all taxes
actually paid or estimated by the Company to be payable in cash in connection
with such sale or issuance; provided that, if the amount of any estimated taxes
pursuant to clause (B)(ii) exceeds the amount of taxes actually required to be
paid in cash in respect of such sale or issuance, the aggregate amount of such
excess shall constitute Net Equity Proceeds.

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     “Net Income” means, for any period, the aggregate of all amounts which
would be included as net income on the consolidated financial statements of the
Company and its Subsidiaries for such period; provided that, for purposes of
this Agreement, the calculation of Net Income shall not include any net income
of any Foreign Supply Chain Entity, except to the extent cash is distributed by
such Foreign Supply Chain Entity during such period to the Company or any other
Subsidiary as a dividend or other distribution.
     “Net Receivables Proceeds” means (i) the gross amount invested (in the form
of a loan, purchased interest, or otherwise) by a Person other than the Company
or a Subsidiary in a Receivables Subsidiary or the Receivables or an interest in
the Receivables held by a Receivables Subsidiary in connection with a Permitted
Securitization minus (ii) the sum of (a) all reasonable and customary legal,
investment banking, brokerage and accounting and other professional fees, costs
and expenses incurred in connection with such Permitted Securitization, (b) all
taxes actually paid or estimated by the Company to be payable in connection with
such Permitted Securitization, and (c) payments made by the Company or its U.S.
Subsidiaries to retire Indebtedness (other than the Loans) where payment of such
Indebtedness is required in connection with such Permitted Securitization;
provided that, if the amount of any estimated taxes pursuant to clause (ii)(b)
exceeds the amount of taxes actually required to be paid in cash in respect of
such Permitted Securitization, the aggregate amount of such excess shall
constitute Net Receivables Proceeds; it being understood that the calculation of
Net Receivables Proceeds with respect to any additional or subsequent investment
in connection with a Permitted Securitization shall include only the increase in
such investment over the previous highest investment used in a prior calculation
and expenses, taxes and repayments not included in a prior calculation.
     “Non-Cash Restructuring Charges” is defined in the definition of “EBITDA”.
     “Non-Consenting Lender” is defined in Section 4.11.
     “Non Defaulting Lender” means a Lender other than a Defaulting Lender.
     “Non-Excluded Taxes” means any Taxes other than (i) net income and
franchise Taxes imposed on (or measured by) net income or net profits with
respect to any Secured Party by any Governmental Authority under the laws of
which such Secured Party is organized or in which it maintains its applicable
lending office and (ii) any branch profit taxes or any similar taxes imposed by
the United States of America or any other Governmental Authority described in
clause (ii).
     “Non-U.S. Lender” means any Lender that is not a “United States person”, as
defined under Section 7701(a)(30) of the Code.
     “Note” means a promissory note of the Borrower payable to any Lender, in
the form of Exhibit A hereto (as such promissory note may be amended, endorsed
or otherwise modified from time to time), evidencing the aggregate Indebtedness
of the Borrower to such Lender resulting from outstanding Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.

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     “Obligations” means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of the Borrower and each other
Obligor arising under or in connection with a Loan Document, including the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any proceeding of the type described in Section 8.1.9,
whether or not allowed in such proceeding) on the Loans.
     “Obligor” means, as the context may require, the Borrower, the Company,
each Subsidiary Guarantor and each other Person (other than a Secured Party)
obligated (other than Persons solely consenting to or acknowledging such
document) under any Loan Document.
     “OFAC” is defined in Section 6.15.
     “Organic Document” means, relative to any Obligor, as applicable, its
articles or certificate of incorporation, by-laws, certificate of partnership,
partnership agreement, certificate of formation, limited liability agreement,
operating agreement and all shareholder agreements, voting trusts and similar
arrangements applicable to any of such Obligor’s Capital Securities.
     “Other Taxes” means any and all stamp, documentary or similar Taxes, or any
other excise or property Taxes or similar levies that arise on account of any
payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
     “Participant” is defined in clause (e) of Section 10.11.
     “Patent Security Agreement” means any Patent Security Agreement executed
and delivered by any Obligor in substantially the form of Exhibit A to the
Security Agreement, as amended, supplemented, amended and restated or otherwise
modified from time to time.
     “Patriot Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), as amended and supplemented from time to
time.
     “Patriot Act Disclosures” means all documentation and other information
available to the Borrower or its Subsidiaries which a Lender, if subject to the
Patriot Act, is required to provide pursuant to the applicable section of the
Patriot Act and which required documentation and information the Administrative
Agent or any Lender reasonably requests in order to comply with their ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act.
     “PBGC” means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
     “Pension Plan” means a “pension plan”, as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Company or any corporation, trade or business that is, along with the Company, a
member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.

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     “Percentage” means, relative to any Lender, the applicable percentage
relating to the Loans set forth opposite its name on Schedule II hereto under
the Commitment column or set forth in a Lender Assignment Agreement under the
Commitment column, as such percentage may be adjusted from time to time pursuant
to Lender Assignment Agreements executed by such Lender and its assignee Lender
and delivered pursuant to Section 10.11. A Lender shall not have any Commitment
if its percentage under the Commitment column is zero.
     “Permitted Acquisition” means an acquisition (whether pursuant to an
acquisition of a majority of the Capital Securities of a target or all or
substantially all of a target’s assets) by the Company or any Subsidiary from
any Person of a business in which the following conditions are satisfied:
     (a) the Company shall have delivered a certificate certifying that before
and after giving effect to such acquisition, the representations and warranties
set forth in each Loan Document shall, in each case, be true and correct in all
material respects with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date) and
no Default has occurred and is continuing or would result therefrom; and
     (b) the Company shall have delivered to the Administrative Agent a
Compliance Certificate for the period of four full Fiscal Quarters immediately
preceding such acquisition (prepared in good faith and in a manner and using
such methodology which is consistent with the most recent financial statements
delivered pursuant to Section 7.1.1) giving pro forma effect to the consummation
of such acquisition and evidencing compliance with the covenants set forth in
Section 7.2.4.
     “Permitted Additional Restricted Payment” means, for any Fiscal Year set
forth below, Restricted Payments made by the Company in the amount set forth
opposite such Fiscal Year:

          Fiscal Year   Cash Amount
2006
  $ 24,000,000  
2007
  $ 30,000,000  
2008
  $ 36,000,000  
2009
  $ 42,000,000  
2010 and thereafter
  $ 48,000,000  

; provided, to the extent that the amount of Permitted Additional Restricted
Payments made by the Company during any Fiscal Year is less than the aggregate
amount permitted (including after giving effect to this proviso) for such Fiscal
Year, then such unutilized amount may be carried forward and utilized by the
Company to make Permitted Additional Restricted Payments in any succeeding
Fiscal Year and provided further that, to the extent (i) additional Capital
Securities are issued by the Company which result in the payment of Net Equity
Proceeds pursuant to Sections 3.1.1 and 3.1.2, the amounts set forth above shall
be increased by a percentage of such amounts equal to the percentage increase of
additional outstanding Capital Securities of the Company resulting from any such
issuance by the Company and (ii) for Fiscal Year 2009 and each Fiscal Year
thereafter, the amounts set forth above in such Fiscal Years shall be increased

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(after giving effect to any increases permitted pursuant to preceding clause
(i)) by an additional $120,000,000 so long as both before and after giving
effect to such Restricted Payment, the Leverage Ratio is less than 3.75:1.00.
     “Permitted Cash Restructuring Charge Amount” means, $120,000,000 in the
aggregate for Fiscal Year 2006 and all Fiscal Years ending after the Closing
Date.
     “Permitted Cash Spin-Off Charge Amount” means, for any Fiscal Year set
forth below, the amount set forth opposite such Fiscal Year:

          Fiscal Year   Cash Amount
2006
  $ 20,000,000  
2007
  $ 55,000,000  

     “Permitted Liens” is defined in Section 7.2.3.
     “Permitted Securitization” means any Disposition by the Company or any of
its Subsidiaries consisting of Receivables and related collateral, credit
support and similar rights and any other assets that are customarily transferred
in a securitization of receivables, pursuant to one or more securitization
programs, to a Receivables Subsidiary or a Person who is not an Affiliate of the
Company; provided that (i) the consideration to be received by the Company and
its Subsidiaries other than a Receivables Subsidiary for any such Disposition
consists of cash, a promissory note or a customary contingent right to receive
cash in the nature of a “hold-back” or similar contingent right, (ii) no Default
shall have occurred and be continuing or would result therefrom, (iii) the
aggregate outstanding balance of the Indebtedness in respect of all such
programs at any point in time is not in excess of $250,000,000, and (iv) the Net
Receivables Proceeds from such Disposition are applied to the extent required
pursuant to Sections 3.1.1 and 3.1.2.
     “Person” means any natural person, corporation, limited liability company,
partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
     “Platform” is defined in clause (b) of Section 9.11.
     “Purchase Money Note” means a promissory note evidencing a line of credit,
or evidencing other Indebtedness owed to the Company or any Subsidiary in
connection with a Permitted Securitization, which note shall be repaid from cash
available to the maker of such note, other than amounts required to be
established as reserves, amounts paid to investors in respect of interest,
principal and other amounts owing to such investors and amounts paid in
connection with the purchase of newly generated accounts receivable.
     “Quarterly Payment Date” means the last day of March, June, September and
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
     “Receivable” shall mean a right to receive payment arising from a sale or
lease of goods or the performance of services by a Person pursuant to an
arrangement with another Person

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pursuant to which such other Person is obligated to pay for good or services
under terms that permit the purchase of such goods and services on credit and
shall include, in any event, any items of property that would be classified as
an “account,” “chattel paper,” “payment intangible” or “instrument” under the
UCC and any supporting obligations.
     “Receivables Subsidiary” shall mean any wholly owned Subsidiary of the
Company (or another Person in which the Company or any Subsidiary makes an
Investment and to which the Company or one or more of its Subsidiaries transfer
Receivables and related assets) which engages in no activities other than in
connection with the financing of Receivables and which is designated by the
Board of Directors of the applicable Subsidiary (as provided below) as a
Receivables Subsidiary and which meets the following conditions:
     (a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of such Subsidiary:
     (i) is guaranteed by the Company or any Subsidiary (that is not a
Receivables Subsidiary);
     (ii) is recourse to or obligates the Company or any Subsidiary (that is not
a Receivables Subsidiary); or
     (iii) subjects any property or assets of the Company or any Subsidiary
(that is not a Receivables Subsidiary), directly or indirectly, contingently or
otherwise, to the satisfaction thereof;
     (b) with which neither the Company nor any Subsidiary (that is not a
Receivables Subsidiary) has any material contract, agreement, arrangement or
understanding (other than Standard Securitization Undertakings); and
     (c) to which neither the Company nor any Subsidiary (that is not a
Receivables Subsidiary) has any obligation to maintain or preserve such entity’s
financial condition or cause such entity to achieve certain levels of operating
results.
     Any such designation by the Board of Directors of the applicable Subsidiary
shall be evidenced by a certified copy of the resolution of the Board of
Directors of such Subsidiary giving effect to such designation and an officers
certificate certifying, to the best of such officer’s knowledge and belief, that
such designation complies with the foregoing conditions
     “Register” is defined in clause (a) of Section 2.5.
     “Release” means a “release”, as such term is defined in CERCLA.
     “Replacement Lender” is defined in Section 4.11.
     “Replacement Notice” is defined in Section 4.11.
     “Required Lenders” means, at any time, Non-Defaulting Lenders holding more
than 50% of the Total Exposure Amount of all Non-Defaulting Lenders.

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     “Resource Conservation and Recovery Act” means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
     “Restricted Payment” means (i) the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of the Company or any
Subsidiary) (other than a Receivables Subsidiary) on, or the making of any
payment or distribution on account of, or setting apart assets for a sinking or
other analogous fund for the purchase, redemption, defeasance, retirement or
other acquisition of, any class of Capital Securities of the Company or any
Subsidiary (other than a Receivables Subsidiary) or any warrants, options or
other right or obligation to purchase or acquire any such Capital Securities,
whether now or hereafter outstanding, or (ii) the making of any other
distribution in respect of such Capital Securities, in each case either directly
or indirectly, whether in cash, property or obligations of the Company or any
Subsidiary or otherwise.
     “S&P” means Standard & Poor’s Rating Services, a division of The
McGraw-Hill Companies, Inc. and its successors.
     “Sara Lee” is defined in the first recital.
     “SEC” means the Securities and Exchange Commission.
     “Secured Parties” means, collectively, the Lenders, the Administrative
Agent, the Collateral Agent, the Lead Arrangers and each of their respective
successors, transferees and assigns.
     “Security Agreement” means the Pledge and Security Agreement executed and
delivered by each Obligor, substantially in the form of Exhibit G hereto,
together with any supplemental Foreign Pledge Agreements delivered pursuant to
the terms of this Agreement, in each case as amended, supplemented, amended and
restated or otherwise modified from time to time.
     “Senior Note Documents” means the Senior Notes, the Senior Note Indenture
and all other agreements, documents and instruments executed and delivered with
respect to the Senior Notes or the Senior Note Indenture, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with this Agreement.
     “Senior Note Indenture” means the Indenture, between the Company and the
Person acting as trustee thereunder (the “Senior Notes Trustee”), pursuant to
which the Senior Notes and any supplemental issuance of “senior notes”
thereunder are issued, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with this
Agreement.
     “Senior Notes” is defined in the second recital.
     “Senior Notes Trustee” is defined in the definition of “Senior Note
Indenture”.
     “Solvent” means, with respect to any Person and its Subsidiaries on a
particular date, that on such date (i) the fair value of the property (on a
going-concern basis) of such Person and its Subsidiaries on a consolidated basis
is greater than the total amount of liabilities, including

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contingent liabilities, of such Person and its Subsidiaries on a consolidated
basis, (ii) the present fair salable value of the assets (on a going-concern
basis) of such Person and its Subsidiaries on a consolidated basis is not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured in the ordinary course of business, (iii) such Person does
not intend to, and does not believe that it or its Subsidiaries will, incur
debts or liabilities beyond the ability of such Person and its Subsidiaries to
pay as such debts and liabilities mature in the ordinary course of business
(including through refinancings, asset sales and other capital market
transactions), and (iv) such Person and its Subsidiaries on a consolidated basis
is not engaged in business or a transaction, and such Person and its
Subsidiaries on a consolidated basis is not about to engage in a business or a
transaction, for which the property of such Person and its Subsidiaries on a
consolidated basis would constitute an unreasonably small capital. The amount of
Contingent Liabilities at any time shall be computed as the amount that, in
light of all the facts and circumstances existing at such time, can reasonably
be expected to become an actual or matured liability.
     “Specified Default” means (i) any Default under Section 8.1.1 or Section
8.1.9 or (ii) any other Event of Default.
     “Spin-Off” is defined in the first recital.
     “Standard Securitization Undertakings” shall mean representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary which are reasonably customary in a securitization of Receivables.
     “Stated Maturity Date” means the seven year and six month anniversary of
the Closing Date.
     “Subsidiary” means, with respect to any Person, any other Person of which
more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term “Subsidiary” shall be a
reference to a Subsidiary of the Company (other than a Receivables Subsidiary).
No Foreign Supply Chain Entity shall be considered to be a Subsidiary of the
Company or any Subsidiary for purposes hereof except as set forth in the
definition of Foreign Supply Chain Entity. Further, the European TM SPV shall
not be considered to be a Subsidiary for any purpose hereunder.
     “Subsidiary Guarantor” means each U.S. Subsidiary that has executed and
delivered to the Administrative Agent the Guaranty (including by means of a
delivery of a supplement thereto).
     “Syndication Agents” is defined in the preamble.
     “Syndication Date” means the date upon which the Lead Arrangers determine
in their sole discretion (and notify the Company) and in accordance with the
terms of the Fee Letter that

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a Successful Syndication (as defined in the Fee Letter) (and the resultant
addition of Persons as Lenders pursuant to Section 10.11) has been completed.
     “Synthetic Lease” means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (i) that is not a capital lease in accordance
with GAAP and (ii) in respect of which the lessee retains or obtains ownership
of the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
     “Taxes” means all income, stamp or other taxes, duties, levies, imposts,
charges, assessments, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
and all interest, penalties or similar liabilities with respect thereto.
     “Termination Date” means the date on which all Obligations have been paid
in full in cash (other than contingent indemnification obligations for which no
claim has been asserted) and all Commitments shall have terminated.
     “Total Debt” means, on any date, the outstanding principal amount of all
Indebtedness of the Company and its Subsidiaries (other than a Receivables
Subsidiary) of the type referred to in clause (i) of the definition of
“Indebtedness”, clause (ii) of the definition of “Indebtedness”, clause (iii) of
the definition of “Indebtedness” and clause (vii) of the definition of
“Indebtedness”, in each case exclusive of intercompany Indebtedness between the
Company and its Subsidiaries and any Contingent Liability in respect of any of
the foregoing.
     “Total Exposure Amount” means, on any date of determination (and without
duplication), the outstanding principal amount of all Loans.
     “Trademark Security Agreement” means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
the Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
     “Transaction” means , collectively, (i) the consummation of the Spin-Off,
(ii) the issuance of the Dividend, (iii) the consummation of the IP Purchase,
(iv) the entering into of the Loan Documents (other than this Agreement) and the
making of the Loans hereunder on the Closing Date, (v) the entering into of the
First Lien Loan Documents and the making of the First Lien Loans, (vi) the
receipt by the Company of the proceeds from the Bridge Loans and the entering
into of the Bridge Loan Documents and/or the entering into of the Senior Notes
Documents and the issuance of the Senior Notes in an aggregate amount of
$500,000,000, and (vii) the payment of fees and expenses in connection and in
accordance with the foregoing.
     “Transaction Documents” means, collectively, the First Lien Loan Documents,
the Bridge Loan Documents, the Senior Note Documents and any other material
document executed or delivered in connection with the Transaction, including any
transition services agreements and tax sharing agreements, in each case as
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with Section 7.2.12.

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     “type” means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
     “UCC” means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that if, with respect to any Filing Statement or
by reason of any provisions of law, the perfection or the effect of perfection
or non-perfection of the security interests granted to the Collateral Agent
pursuant to the applicable Loan Document is governed by the Uniform Commercial
Code as in effect in a jurisdiction of the United States other than New York,
then “UCC” means the Uniform Commercial Code as in effect from time to time in
such other jurisdiction for purposes of the provisions of each Loan Document and
any Filing Statement relating to such perfection or effect of perfection or
non-perfection.
     “United States” or “U.S.” means the United States of America, its fifty
states and the District of Columbia.
     “U.S. Subsidiary” means any Subsidiary (other than a Receivables
Subsidiary) that is incorporated or organized under the laws of the United
States.
     “Voting Securities” means, with respect to any Person, Capital Securities
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
     “Welfare Plan” means a “welfare plan”, as such term is defined in
Section 3(1) of ERISA.
     “wholly owned Subsidiary” means any Subsidiary all of the outstanding
Capital Securities of which (other than any director’s qualifying shares or
investments by foreign nationals mandated by applicable laws) is owned directly
or indirectly by the Company.
     SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
     SECTION 1.3 Cross-References. Unless otherwise specified, references in a
Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
     SECTION 1.4 Accounting and Financial Determinations. (a) Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations thereunder (including under
Section 7.2.4 and the definitions used in such calculations) shall be made, in
accordance with those generally accepted accounting principles (“GAAP”) applied
in the preparation of the financial statements referred to in clause (a) of
Section 5.6. Unless otherwise expressly provided, all financial covenants and
defined financial terms shall be computed on a consolidated basis for the
Company and its Subsidiaries, in each case without duplication.

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          (b) As of any date of determination, for purposes of determining the
Interest Coverage Ratio or Leverage Ratio (and any financial calculations
required to be made or included within such ratios, or required for purposes of
preparing any Compliance Certificate to be delivered pursuant to the definition
of “Permitted Acquisition”), the calculation of such ratios and other financial
calculations shall include or exclude, as the case may be, the effect of any
assets or businesses that have been acquired or Disposed of by the Company or
any of its Subsidiaries pursuant to the terms hereof (including through mergers
or consolidations) as of such date of determination, as determined by the
Company on a pro forma basis in accordance with GAAP, which determination may
include one-time adjustments or reductions in costs, if any, directly
attributable to any such permitted Disposition or Permitted Acquisition, as the
case may be, in each case (i) calculated in accordance with Regulation S-X of
the Securities Act of 1933, as amended from time to time, and any successor
statute, for the period of four Fiscal Quarters ended on or immediately prior to
the date of determination of any such ratios (without giving effect to any
cost-savings or adjustments relating to synergies resulting from a Permitted
Acquisition except as permitted by Regulation S-X of the Securities Act of 1933
or otherwise as the Administrative Agent shall otherwise agree) and (ii) giving
effect to any such Permitted Acquisition or permitted Disposition as if it had
occurred on the first day of such four Fiscal Quarter period.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
     SECTION 2.1 Commitments. On the terms and subject to the conditions of this
Agreement, the Lenders agree to make the Loans as set forth below.
     SECTION 2.1.1 Commitments. In a single Borrowing (which shall be made on a
Business Day) occurring on or prior to the Commitment Termination Date, each
Lender agrees that it will make loans (relative to such Lender, its “Loans”) to
the Borrower equal to such Lender’s Percentage of the aggregate amount of the
Borrowing of Loans requested by the Borrower to be made on such day. No Lender
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of all Loans (i) of all Lenders made
on the Closing Date would exceed the Commitment Amount or (ii) of such Lender
made on the Closing Date would exceed such Lender’s Percentage of the Commitment
Amount. No amounts paid or prepaid with respect to Loans may be reborrowed.
     SECTION 2.2 Borrowing Procedures. Loans shall be made by the Lenders in
accordance with Section 2.1.1.
     SECTION 2.2.1 Borrowing Procedure. By delivering a Borrowing Request to the
Administrative Agent on or before 10:00 a.m. on a Business Day, the Borrower may
irrevocably request, on such Business Day in the case of Base Rate Loans, on not
less than three Business Days’ notice and not more than five Business Days’
notice in the case of LIBO Rate Loans, that a Borrowing be made in a single
drawing on or prior to the Commitment Termination Date; provided that only Base
Rate Loans and LIBO Rate Loans with a one month Interest Period may be incurred
prior to the earlier to occur of (a) the 30th day following the Closing Date and
(b) the date upon which the Lead Arrangers have determined that the Syndication
Date has occurred. On or before 12:00 noon on such Business Day each Lender
shall deposit with the

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Administrative Agent same day funds in an amount equal to such Lender’s
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No Lender’s
obligation to make any Loan shall be affected by any other Lender’s failure to
make any Loan.
     SECTION 2.3 Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before
10:00 a.m. on a Business Day, the Borrower may from time to time irrevocably
elect on not less than three nor more than five Business Days’ notice before the
last day of the then current Interest Period with respect thereto, to convert
any Base Rate Loan into one or more LIBO Rate Loans or to continue any LIBO Rate
Loan; provided that (i) any portion of any Loan which is continued or converted
hereunder shall be in a minimum amount of $1,000,000 and in an integral multiple
amount of $1,000,000 and (ii) in the absence of prior notice as required above
(which notice may be delivered telephonically followed by written confirmation
within 24 hours thereafter by delivery of a Continuation/Conversion Notice),
with respect to any LIBO Rate Loan such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan; provided further that (A) each such
conversion or continuation shall be pro rated among the applicable outstanding
Loans of all Lenders that have made such Loans, and (B) no portion of the
outstanding principal amount of any Loans may be continued as, or be converted
into, LIBO Rate Loans when any Event of Default has occurred and is continuing.
     SECTION 2.4 Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided that,
such LIBO Rate Loan shall nonetheless be deemed to have been made and to be held
by such Lender, and the obligation of the Borrower to repay such LIBO Rate Loan
shall nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. Subject to Section 4.10, each
Lender may, at its option, make any Loan available to the Borrower by causing
any foreign or domestic branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay Loans in accordance with the terms of this Agreement.
     SECTION 2.5 Register; Notes. The Register shall be maintained on the
following terms.
     (a) The Borrower hereby designates the Administrative Agent to serve as the
Borrower’s agent, solely for the purpose of this clause, to maintain a register
(the “Register”) on which the Administrative Agent will record each Lender’s
Commitment, the Loans made by each Lender and each repayment in respect of the
principal amount of the Loans, annexed to which the Administrative Agent shall
retain a copy of each Lender Assignment Agreement delivered to the
Administrative Agent pursuant to Section 10.11. Failure to make any recordation,
or any error in such recordation, shall not affect any Obligor’s Obligations.
The entries in the Register shall constitute prima facie evidence and shall be
binding, in the absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person in whose name a Loan is registered
(or, if applicable, to which a Note has been issued) as

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the owner thereof for the purposes of all Loan Documents, notwithstanding notice
or any provision herein to the contrary. Any assignment or transfer of a
Commitment or the Loans made pursuant hereto shall be registered in the Register
only upon delivery to the Administrative Agent of a Lender Assignment Agreement
that has been executed by the requisite parties pursuant to Section 10.11. No
assignment or transfer of a Lender’s Commitment or Loans shall be effective
unless such assignment or transfer shall have been recorded in the Register by
the Administrative Agent as provided in this Section.
     (b) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will execute and deliver to such Lender a Note
evidencing the Loans made by, and payable to the order of, such Lender in a
maximum principal amount equal to such Lender’s Percentage of the original
Commitment Amount. The Borrower hereby irrevocably authorizes each Lender to
make (or cause to be made) appropriate notations on the grid attached to such
Lender’s Note (or on any continuation of such grid), which notations, if made,
shall evidence, inter alia, the date of, the outstanding principal amount of,
and the interest rate and Interest Period applicable to the Loans evidenced
thereby. Such notations shall, to the extent not inconsistent with notations
made by the Administrative Agent in the Register, constitute prima facie
evidence and shall be binding on each Obligor absent manifest error; provided
that, the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of any Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
     SECTION 3.1 Repayments and Prepayments; Application. The Borrower agrees
that the Loans shall be repaid and prepaid pursuant to the following terms,
subject in all cases to the terms, conditions and restrictions set forth in the
Intercreditor Agreement.
     SECTION 3.1.1 Repayments and Prepayments. The Borrower shall repay in full
the unpaid principal amount of each Loan on the Stated Maturity Date. Prior
thereto, payments and prepayments of the Loans shall or may be made as set forth
below.
     (a) From time to time on any Business Day on or after the first anniversary
of the Closing Date and following the First Lien Termination Date, the Borrower
may make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Loans; provided that, the Borrower shall have paid the
following prepayment premium in connection therewith:

              Prepayment Premium     (as a percentage of the Loans Year   being
prepaid)
First anniversary of the Closing Date through (and including) the second
anniversary of the Closing Date
    2 %
 
       
Following the second anniversary of the Closing Date through (and including)
third anniversary of the Closing Date
    1 %
 
       
thereafter
    0 %

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All such voluntary prepayments shall require at least (1) in the case of Base
Rate Loans, one but no more than five Business Days’ prior notice to the
Administrative Agent and (2) in the case of LIBO Rate Loans three but no more
than five Business Days’ prior notice to the Administrative Agent; and all such
voluntary partial prepayments shall be in an aggregate minimum amount of
$1,000,000 and an integral multiple of $500,000.
     (b) [Intentionally Omitted].
     (c) Following the First Lien Termination Date, concurrently with the
receipt by the Company of any Net Equity Proceeds, the Borrower shall make a
mandatory prepayment of the Loans in an amount equal to the product of (i) such
Net Equity Proceeds multiplied by (ii) the Applicable Percentage, to be applied
as set forth in Section 3.1.2.
     (d) Following the First Lien Termination Date, the Borrower shall (subject
to the next proviso) within 5 Business Days receipt of any Net Disposition
Proceeds or Net Casualty Proceeds, by the Borrower or any of its U.S.
Subsidiaries, deliver to the Administrative Agent a calculation of the amount of
such proceeds, and, to the extent the aggregate amount of such (i) Net
Disposition Proceeds received by the Borrower and its U.S. Subsidiaries in any
period of twelve consecutive calendar months since the Closing Date exceeds
$10,000,000 and (ii) Net Casualty Proceeds received by the Borrower and its U.S.
Subsidiaries in any period of twelve consecutive calendar months since the
Closing Date exceeds $50,000,000, the Borrower shall make a mandatory prepayment
of the Loans in an amount equal to 100% of such excess Net Disposition Proceeds
or Net Casualty Proceeds, as applicable; provided that, so long as (i) no Event
of Default has occurred and is continuing, such proceeds may be retained by the
Borrower and its U.S. Subsidiaries (and be excluded from the prepayment
requirements of this clause) to be invested or reinvested within one year or,
subject to immediately succeeding clause (ii), 18 months or 36 months, as
applicable, to the acquisition or construction of other assets or properties
consistent with the businesses permitted to be conducted pursuant to
Section 7.2.1 (including by way of merger or Investment), and (ii) within one
year following the receipt of such Net Disposition Proceeds or Net Casualty
Proceeds, such proceeds are (A) applied or (B) committed to be, and actually
are, applied within (I) 18 months following the receipt of such Net Disposition
Proceeds or (II) 36 months following the receipt of such Net Casualty Proceeds,
in each case to such acquisition or construction plan. The amount of such Net
Disposition Proceeds or Net Casualty Proceeds unused or uncommitted after such
one year, 18 months or 36 months, as applicable, period shall be applied to
prepay the Loans as set forth in Section 3.1.2. Following the First Lien
Termination Date, at any time after receipt of any such Net Casualty Proceeds in
excess of $25,000,000 but prior to the application thereof to such mandatory
prepayment or the acquisition of other assets or properties as described above,
upon the request by the Administrative Agent (acting at the direction of the
Required Lenders) to the Borrower, the Borrower shall deposit an amount equal to
such excess Net Casualty Proceeds into a cash collateral account maintained with
(and subject to documentation reasonably satisfactory to) the Collateral Agent
for the benefit of the Secured Parties (and over which the Collateral Agent
shall have a first priority perfected Lien) pending application as a prepayment
or to be released as

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requested by the Borrower in respect of such acquisition. Amounts deposited in
such cash collateral account shall be invested in Cash Equivalent Investments,
as directed by the Borrower.
     (e) Following the First Lien Termination Date, within 100 days after the
close of each Fiscal Year (beginning with the Fiscal Year ending 2007) the
Borrower shall make a mandatory prepayment of the Loans in an amount equal to
the product of (i) the Excess Cash Flow (if any) for such Fiscal Year multiplied
by (ii) the Applicable Percentage minus (iii) the aggregate amount of all
voluntary prepayments of Loans during such Fiscal Year, to be applied as set
forth in Section 3.1.2;
     (f) Following the First Lien Termination Date, concurrently with the
receipt by the Company or any of its U.S. Subsidiaries of any Net Debt Proceeds,
the Borrower shall make a mandatory prepayment of the Loans in an amount equal
to 100% of such Net Debt Proceeds, to be applied as set forth in Section 3.1.2.
     (g) Following the First Lien Termination Date, concurrently with the
receipt by the Company or any of its U.S. Subsidiaries of any Net Receivables
Proceeds, the Borrower shall make a mandatory prepayment of the Loans in an
amount equal to 100% of such Net Receivables Proceeds, to be applied as set
forth in Section 3.1.2.
     (h) Immediately upon any acceleration of the Stated Maturity Date of the
Loans pursuant to Section 8.2 or Section 8.3, the Borrower shall repay all the
Loans, unless, pursuant to Section 8.3, only a portion of all the Loans is so
accelerated (in which case the portion so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by clause (a) or Section 4.4.
     SECTION 3.1.2 Application. Amounts prepaid pursuant to Section 3.1.1 shall
, subject to the terms, conditions and restrictions set forth in the
Intercreditor Agreement, be applied to the extent of such prepayment or
repayment, first, to the principal amount thereof being maintained as Base Rate
Loans, and second, subject to the terms of Section 4.4, to the principal amount
thereof being maintained as LIBO Rate Loans.
     SECTION 3.2 Interest Provisions. Interest on the outstanding principal
amount of the Loans shall accrue and be payable in accordance with the terms set
forth below.
     SECTION 3.2.1 Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that the Loans
comprising a Borrowing accrue interest at a rate per annum:
     (a) on that portion maintained from time to time as a Base Rate Loan, equal
to the sum of the Alternate Base Rate from time to time in effect plus the
Applicable Margin; and
     (b) on that portion maintained as a LIBO Rate Loan, during each Interest
Period applicable thereto, equal to the sum of the LIBO Rate (Reserve Adjusted)
for such Interest Period plus the Applicable Margin.

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All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
     SECTION 3.2.2 Post-Default Rates. After the occurrence and during the
continuance of an Event of Default, the Borrower shall pay, but only to the
extent permitted by law, interest (after as well as before judgment) on all
outstanding Obligations at a rate per annum equal to (a) in the case of
principal on any Loan, the rate of interest that otherwise would be applicable
to such Loan plus 2% per annum; and (b) in the case of overdue interest, fees,
and other monetary Obligations, the Alternate Base Rate from time to time in
effect, plus the Applicable Margin accruing interest at the Alternate Base Rate,
plus 2% per annum.
     SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
     (a) on the Stated Maturity Date;
     (b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan on the principal amount so paid or prepaid;
     (c) with respect to Base Rate Loans, on each Quarterly Payment Date
occurring after the Closing Date;
     (d) with respect to LIBO Rate Loans, on the last day of each applicable
Interest Period (and, if such Interest Period shall exceed three months, on the
date occurring on each three-month interval occurring after the first day of
such Interest Period);
     (e) with respect to any Base Rate Loans converted into LIBO Rate Loans on a
day when interest would not otherwise have been payable pursuant to clause (c),
on the date of such conversion; and
     (f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
acceleration.
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
     SECTION 3.3 Fees. The Borrower agrees to pay to each of the Agents and each
Lead Arranger, for its own account, the fees in the amounts and on the dates set
forth in the Fee Letter or in such other fee letter(s) negotiated by the parties
thereto.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
     SECTION 4.1 LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the
Administrative Agent,

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constitute prima facie evidence thereof and shall be binding on the Borrower
absent manifest error) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any Governmental Authority
asserts that it is unlawful, for such Lender to make or continue any Loan as, or
to convert any Loan into, a LIBO Rate Loan, the obligations of such Lender to
make, continue or convert any such LIBO Rate Loan shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all outstanding LIBO Rate Loans payable to such Lender shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
     SECTION 4.2 Deposits Unavailable. If the Administrative Agent shall have
determined that
     (a) Dollar deposits in the relevant amount and for the relevant Interest
Period are not available to it in its relevant market; or
     (b) by reason of circumstances affecting it’s relevant market, adequate
means do not exist for ascertaining the interest rate applicable hereunder to
LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.2 and Section 2.3 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.
     SECTION 4.3 Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Secured Party in respect
of, such Secured Party’s Commitments and the making of Loans hereunder
(including the making, continuing or maintaining (or of its obligation to make
or continue) any Loans as, or of converting (or of its obligation to convert)
any Loans into, LIBO Rate Loans) that arise in connection with any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in after the Closing Date of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any Governmental
Authority, except for such changes with respect to increased capital costs and
Taxes which are governed by Sections 4.5 and 4.6, respectively. Each affected
Secured Party shall promptly notify the Administrative Agent and the Borrower in
writing of the occurrence of any such event, stating the reasons therefor and
the additional amount required fully to compensate such Secured Party for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower directly to such Secured Party within five Business Days of its
receipt of such notice, and such notice shall, in the absence of manifest error,
constitute prima facie evidence thereof and shall be binding on the Borrower.
     SECTION 4.4 Funding Losses. In the event any Lender shall incur any actual
loss or expense (including any actual loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
(if any) to make or continue any portion of the principal amount of any Loan as,
or to convert any portion of the principal amount of any Loan into, a LIBO Rate
Loan) as a result of

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     (a) any conversion or repayment or prepayment of the principal amount of
any LIBO Rate Loan on a date other than the scheduled last day of the Interest
Period applicable thereto, whether pursuant to Article III or otherwise;
     (b) any Loans not being made continued or converted as LIBO Rate Loans in
accordance with the Borrowing Request or other notice therefor;
     (c) any Loans not being continued as, or converted into, LIBO Rate Loans in
accordance with the Continuation/Conversion Notice therefor; or
     (d) the assignment of any LIBO Rate Loan other than on the last day of an
Interest Period therefor as a result of a request by the Borrower pursuant to
Section 4.11.
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such actual loss or
expense. Such written notice shall, in the absence of manifest error, constitute
prima facie evidence thereof and shall be binding on the Borrower.
     SECTION 4.5 Increased Capital Costs. If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any Governmental Authority after the Closing Date
affects or would affect the amount of capital required or expected to be
maintained by any Secured Party or any Person controlling such Secured Party,
and such Secured Party determines (in good faith but in its sole and absolute
discretion) that as a result thereof the rate of return on its or such
controlling Person’s capital as a consequence of the Commitments or the Loans
made by such Secured Party is reduced to a level below that which such Secured
Party or such controlling Person could have achieved but for the occurrence of
any such circumstance, then upon notice (together with reasonably detailed
supporting documentation) from time to time by such Secured Party to the
Borrower, the Borrower shall within five Business Days following receipt of such
notice pay directly to such Secured Party additional amounts sufficient to
compensate such Secured Party or such controlling Person for such reduction in
rate of return. A statement in reasonable detail of such Secured Party as to any
such additional amount or amounts shall, in the absence of manifest error,
constitute prima facie evidence thereof and shall be binding on the Borrower. In
determining such amount, such Secured Party may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem applicable.
     SECTION 4.6 Taxes. The Borrower covenants and agrees as follows with
respect to Taxes.
     (a) Any and all payments by the Borrower under each Loan Document shall be
made without setoff, counterclaim or other defense, and free and clear of, and
without deduction or withholding for or on account of, any Taxes. In the event
that any Taxes are imposed and required to be deducted or withheld from any
payment required to be made by any Obligor to or on behalf of any Secured Party
under any Loan Document, then:

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     (i) subject to clause (f), if such Taxes are Non-Excluded Taxes, the amount
of such payment shall be increased as may be necessary so that such payment is
made, after withholding or deduction for or on account of such Taxes, in an
amount that is not less than the amount provided for in such Loan Document; and
     (ii) the Borrower shall withhold the full amount of such Taxes from such
payment (as increased pursuant to clause (a)(i)) and shall pay such amount to
the Governmental Authority imposing such Taxes in accordance with applicable
law.
     (b) In addition, the Borrower shall pay all Other Taxes imposed to the
relevant Governmental Authority imposing such Other Taxes in accordance with
applicable law.
     (c) Upon the written request of the Administrative Agent, as promptly as
practicable after the payment of any Taxes or Other Taxes, and in any event
within 45 days of any such written request, the Borrower shall furnish to the
Administrative Agent a copy of an official receipt (or a certified copy thereof)
evidencing the payment of such Taxes or Other Taxes. The Administrative Agent
shall make copies thereof available to any Lender upon request therefor.
     (d) Subject to clause (f), the Borrower shall indemnify each Secured Party
for any Non-Excluded Taxes and Other Taxes levied, imposed or assessed on (and
whether or not paid directly by) such Secured Party whether or not such
Non-Excluded Taxes or Other Taxes are correctly or legally asserted by the
relevant Governmental Authority; provided that if the Borrower reasonably
believes that such Taxes were not correctly or legally asserted, such Secured
Party will use reasonable efforts to cooperate with the Borrower to obtain a
refund of such Taxes so long as such efforts would not, in the sole
determination of such Secured Party, result in any additional costs, expenses or
risks or be otherwise disadvantageous to it. Promptly upon having knowledge that
any such Non-Excluded Taxes or Other Taxes have been levied, imposed or
assessed, and promptly upon notice thereof by any Secured Party, the Borrower
shall pay such Non-Excluded Taxes or Other Taxes directly to the relevant
Governmental Authority (provided that no Secured Party shall be under any
obligation to provide any such notice to the Borrower). In addition, the
Borrower shall indemnify each Secured Party for any incremental Taxes that may
become payable by such Secured Party as a result of any failure of the Borrower
to pay any Taxes when due to the appropriate Governmental Authority or to
deliver to the Administrative Agent, pursuant to clause (c), documentation
evidencing the payment of Taxes or Other Taxes (other than incidental taxes
resulting directly as a result of the willful misconduct or gross negligence of
the Administrative Agent or a respective Secured Party); provided that if the
Secured Party or the Administrative Agent, as applicable, fails to give notice
to the Borrower of the imposition of any Non-Excluded Taxes or Other Taxes
within 120 days following its receipt of actual written notice of the imposition
of such Non-Excluded Taxes or Other Taxes, there will be no obligation for the
Borrower to pay interest or penalties attributable to the period beginning after
such 120th day and ending seven days after the Borrower receives notice from the
Secured Party or the Administrative Agent as applicable. With respect to
indemnification for Non-Excluded Taxes and Other Taxes actually paid by any
Secured Party or the indemnification provided in the immediately preceding
sentence, such indemnification shall be made within 30 days after the date such
Secured Party makes written demand therefor (together with supporting
documentation in reasonable detail). The Borrower acknowledges that any payment
made to any Secured Party or to any Governmental Authority in respect of the
indemnification obligations of

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the Borrower provided in this clause shall constitute a payment in respect of
which the provisions of clause (a) and this clause shall apply.
     (e) Each Non-U.S. Lender, on or prior to the date on which such Non-U.S.
Lender becomes a Lender hereunder (and from time to time thereafter upon the
request of the Borrower or the Administrative Agent, but only for so long as
such non-U.S. Lender is legally entitled to do so), shall deliver to the
Borrower and the Administrative Agent either (i) two duly completed copies of
either (x) Internal Revenue Service Form W-8BEN claiming eligibility of the
Non-U.S. Lender for benefits of an income tax treaty to which the United States
is a party or (y) Internal Revenue Service Form W-8ECI, or in either case an
applicable successor form; or (ii) in the case of a Non-U.S. Lender that is not
legally entitled to deliver either form listed in clause (e)(i), (x) a
certificate to the effect that such Non-U.S. Lender is not (A) a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder”
of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a
controlled foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code (referred to as an “Exemption
Certificate”) and (y) two duly completed copies of Internal Revenue Service Form
W-8BEN or applicable successor form.
     (f) The Borrower shall not be obligated to pay any additional amounts to
any Lender pursuant to clause (a)(i), or to indemnify any Lender pursuant to
clause (d), in respect of United States federal withholding taxes to the extent
imposed as a result of (i) the failure of such Lender to deliver to the Borrower
the form or forms and/or an Exemption Certificate, as applicable to such Lender,
pursuant to clause (e), (ii) such form or forms and/or Exemption Certificate not
establishing a complete exemption from U.S. federal withholding tax or the
information or certifications made therein by the Lender being untrue or
inaccurate on the date delivered in any material respect, or (iii) the Lender
designating a successor lending office at which it maintains its Loans which has
the effect of causing such Lender to become obligated for tax payments in excess
of those in effect immediately prior to such designation; provided that the
Borrower shall be obligated to pay additional amounts to any such Lender
pursuant to clause (a)(i) and to indemnify any such Lender pursuant to clause
(d), in respect of United States federal withholding taxes if (i) any such
failure to deliver a form or forms or an Exemption Certificate or the failure of
such form or forms or Exemption Certificate to establish a complete exemption
from U.S. federal withholding tax or inaccuracy or untruth contained therein
resulted from a change in any applicable statute, treaty, regulation or other
applicable law or any interpretation of any of the foregoing occurring after the
Closing Date, which change rendered such Lender no longer legally entitled to
deliver such form or forms or Exemption Certificate or otherwise ineligible for
a complete exemption from U.S. federal withholding tax, or rendered the
information or certifications made in such form or forms or Exemption
Certificate untrue or inaccurate in a material respect, (ii) the redesignation
of the Lender’s lending office was made at the request of the Borrower or
(iii) the obligation to pay any additional amounts to any such Lender pursuant
to clause (a)(i) or to indemnify any such Lender pursuant to clause (d) is with
respect to an Eligible Assignee that becomes an assignee Lender as a result of
an assignment made at the request of the Borrower.
     (g) If the Administrative Agent or a Lender determines in its sole, good
faith discretion that amounts recovered or refunded are a recovery or refund of
any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the
Borrower pursuant to clause (d),

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or to which the Borrower has paid additional amounts pursuant to clause (a)(i),
it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 4.6 with respect to the Non-Excluded Taxes or Other Taxes that give rise
to such refund), net of all reasonable out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided that in no event will any Lender be required to pay an amount
to the Borrower that would place such Lender in a less favorable net after-tax
position than such Lender would have been in if the additional amounts giving
rise to such refund of any Non-Excluded Taxes or Other Taxes had never been
paid, and provided further that the Borrower, upon the written request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest, or other charges imposed by the relevant
Governmental Authority unless the Governmental Authority assessed such
penalties, interest, or other charges due to the gross negligence or willful
misconduct of the Administrative Agent or such Lender) to the Administrative
Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to the Governmental Authority. Nothing in this
clause (g) shall require any Lender to make available its tax returns or any
other information related to its taxes that it deems confidential.
     SECTION 4.7 Payments, Computations; Proceeds of Collateral, etc. (a) Unless
otherwise expressly provided in a Loan Document, all payments by the Borrower
pursuant to each Loan Document shall be made subject to the terms, conditions
and restrictions set forth in the Intercreditor Agreement and shall be made by
the Borrower to the Administrative Agent for the pro rata account of the Secured
Parties entitled to receive such payment. All payments shall be made without
setoff, deduction or counterclaim not later than 11:00 a.m. on the date due in
same day or immediately available funds, in Dollars, to such account as the
Administrative Agent shall specify from time to time by notice to the Borrower.
Funds received after that time shall be deemed to have been received by the
Administrative Agent on the next succeeding Business Day. The Administrative
Agent shall promptly remit in same day funds to each Secured Party its share, if
any, of such payments received by the Administrative Agent for the account of
such Secured Party. All interest (including interest on LIBO Rate Loans) and
fees shall be computed on the basis of the actual number of days (including the
first day but excluding the last day) occurring during the period for which such
interest or fee is payable over a year comprised of 360 days (or, in the case of
interest on a Base Rate Loan (calculated at other than the Federal Funds Rate),
365 days or, if appropriate, 366 days). Payments due on other than a Business
Day shall be made on the next succeeding Business Day and such extension of time
shall be included in computing interest and fees in connection with that
payment.
     (b) All amounts received as a result of the exercise of remedies under the
Loan Documents (including from the proceeds of collateral securing the
Obligations) or under applicable law shall be applied subject to the terms,
conditions and restrictions set forth in the Intercreditor Agreement; provided,
that after the First Lien Termination Date, they shall be applied upon receipt
to the Obligations as follows: (i) first, to the payment of all Obligations
owing to the Agents, in their capacity as Agents (including the fees and
expenses of counsel to the Agents), (ii) second, after payment in full in cash
of the amounts specified in clause (b)(i), to the ratable payment of all
interest (including interest accruing after the commencement of a proceeding in
bankruptcy, insolvency or similar law, whether or not permitted as a claim under
such law) and fees owing under the Loan Documents, and all costs and expenses
owing to the

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Secured Parties pursuant to the terms of the Loan Documents, until paid in full
in cash, (iii) third, after payment in full in cash of the amounts specified in
clauses (b)(i) and (b)(ii), to the ratable payment of the principal amount of
the Loans then outstanding, (iv) fourth, after payment in full in cash of the
amounts specified in clauses (b)(i) through (b)(iii), to the ratable payment of
all other Obligations owing to the Secured Parties, and (v) fifth, after payment
in full in cash of the amounts specified in clauses (b)(i) through (b)(iv), and
following the Termination Date, to each applicable Obligor or any other Person
lawfully entitled to receive such surplus.
     SECTION 4.8 Sharing of Payments. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms of
Sections 4.3, 4.4, 4.5 or 4.6) in excess of its pro rata share of payments
obtained by all Secured Parties, such Secured Party shall purchase from the
other Secured Parties such participations in Loans made by them as shall be
necessary to cause such purchasing Secured Party to share the excess payment or
other recovery ratably (to the extent such other Secured Parties were entitled
to receive a portion of such payment or recovery) with each of them; provided
that, if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Secured Party, the purchase shall be
rescinded and each Secured Party which has sold a participation to the
purchasing Secured Party shall repay to the purchasing Secured Party the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Secured Party’s ratable share (according to the proportion
of (a) the amount of such selling Secured Party’s required repayment to the
purchasing Secured Party to (b) total amount so recovered from the purchasing
Secured Party) of any interest or other amount paid or payable by the purchasing
Secured Party in respect of the total amount so recovered. The Borrower agrees
that any Secured Party purchasing a participation from another Secured Party
pursuant to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including pursuant to Section 4.9) with respect to
such participation as fully as if such Secured Party were the direct creditor of
the Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any Secured Party receives a secured
claim in lieu of a setoff to which this Section applies, such Secured Party
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Secured Parties entitled
under this Section to share in the benefits of any recovery on such secured
claim.
     SECTION 4.9 Setoff. Each Secured Party shall, subject to the terms,
conditions and restrictions of the Intercreditor Agreement, upon the occurrence
and during the continuance of any Event of Default described in clauses (a)
through (d) of Section 8.1.9 or, with the consent of the Required Lenders, upon
the occurrence and during the continuance of any other Event of Default, have
the right to appropriate and apply to the payment of the Obligations owing to it
(if then due and payable), and (as security for such Obligations) the Borrower
hereby grants to each Secured Party a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Secured Party (other than payroll, trust or tax
accounts); provided that any such appropriation and application shall be subject
to the provisions of Section 4.8. Each Secured Party agrees promptly to notify
the Borrower and the Administrative Agent after any such appropriation and
application made by such Secured Party; provided that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of each Secured Party under this Section are in addition

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to other rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Secured Party may have.
     SECTION 4.10 Mitigation. Each Lender agrees that, if it makes any demand
for payment under Sections 4.3 or 4.6, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Section 4.3 or 4.6.
     SECTION 4.11 Removal of Lenders. If any Lender (an “Affected Lender”) (i)
fails to consent to an election, consent, amendment, waiver or other
modification to this Agreement or other Loan Document (a “Non-Consenting
Lender”) that requires the consent of a greater percentage of the Lenders than
the Required Lenders and such election, consent, amendment, waiver or other
modification is otherwise consented to by Non-Defaulting Lenders holding more
than 66 and 2/3% of the Total Exposure Amount of all Non-Defaulting Lenders,
(ii) makes a demand upon the Borrower for (or if the Borrower is otherwise
required to pay) amounts pursuant to Section 4.3, 4.5 or 4.6, or gives notice
pursuant to Section 4.1 requiring a conversion of such Affected Lender’s LIBO
Rate Loans to Base Rate Loans or any change in the basis upon which interest is
to accrue in respect of such Affected Lender’s LIBO Rate Loans or suspending
such Lender’s obligation to make Loans as, or to convert Loans into, LIBO Rate
Loans or (iii) becomes a Defaulting Lender, the Borrower may, at its sole cost
and expense, within 90 days of receipt by the Borrower of such demand or notice
(or the occurrence of such other event causing Borrower to be required to pay
such compensation) or within 90 days of such Lender becoming a Non-Consenting
Lender or a Defaulting Lender, as the case may be, give notice (a “Replacement
Notice”) in writing to the Administrative Agent and such Affected Lender of its
intention to cause such Affected Lender to sell all or any portion of its Loans,
Commitments and/or Notes to another financial institution or other Person (a
“Replacement Lender”) designated in such Replacement Notice; provided that no
Replacement Notice may be given by the Borrower if (A) such replacement
conflicts with any applicable law or regulation or (B) prior to any such
replacement, such Lender shall have taken any necessary action under Section 4.5
or 4.6 (if applicable) so as to eliminate the continued need for payment of
amounts owing pursuant to Section 4.5 or 4.6 and withdrew its request for
compensation under Section 4.3, 4.5 or 4.6 . If the Administrative Agent shall,
in the exercise of its reasonable discretion and within 30 days of its receipt
of such Replacement Notice, notify the Borrower and such Affected Lender in
writing that the Replacement Lender is reasonably satisfactory to the
Administrative Agent (such consent not being required where the Replacement
Lender is already a Lender), then such Affected Lender shall, subject to the
payment of any amounts due pursuant to Section 4.4, assign, in accordance with
Section 10.11, the portion of its Commitments, Loans, Notes (if any) and other
rights and obligations under this Agreement and all other Loan Documents
designated in the replacement notice to such Replacement Lender; provided that
(A) such assignment shall be without recourse, representation or warranty and
shall be on terms and conditions reasonably satisfactory to such Affected Lender
and such Replacement Lender, and (B) the purchase price paid by such Replacement
Lender shall be in the amount of such Affected Lender’s Loans designated in the
Replacement Notice and/or its Percentage of outstanding Reimbursement
Obligations, as applicable, together with all accrued and unpaid interest and
fees in respect thereof, plus all other amounts (including the amounts demanded
and unreimbursed under

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Sections 4.3, 4.5 and 4.6), owing to such Affected Lender hereunder. Upon the
effective date of an assignment described above, the Replacement Lender shall
become a “Lender” for all purposes under the Loan Documents. Each Lender hereby
grants to the Administrative Agent an irrevocable power of attorney (which power
is coupled with an interest) to execute and deliver, on behalf of such Lender as
assignor, any assignment agreement necessary to effectuate any assignment of
such Lender’s interests hereunder in the circumstances contemplated by this
Section.
     SECTION 4.12 Limitation on Additional Amounts, etc. Notwithstanding
anything to the contrary contained in Sections 4.3 or 4.5 of this Agreement,
unless a Lender gives notice to the Borrower that it is obligated to pay an
amount under any such Section within 90 days after the later of (i) the date
such Lender incurs the respective increased costs, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital or
(ii) the date such Lender has actual knowledge of its incurrence of their
respective increased costs, loss, expense or liability, reductions in amounts
received or receivable or reduction in return on capital, then such Lender shall
only be entitled to be compensated for such amount by the Borrower pursuant to
Sections 4.3 or 4.5, as the case may be, to the extent the costs, loss, expense
or liability, reduction in amounts received or receivable or reduction in return
on capital are incurred or suffered on or after the date which occurs 90 days
prior to such Lender giving notice to the Borrower that it is obligated to pay
the respective amounts pursuant to Sections 4.3 or 4.5, as the case may be. This
Section shall have no applicability to any Section of this Agreement other than
Sections 4.3 and 4.5.
ARTICLE V
CONDITIONS TO LOANS
Subject to Section 7.1.11, the obligations of the Lenders to make the Loans
shall be subject to the prior or concurrent satisfaction (or waiver) in all
material respects of each of the conditions precedent set forth in this Article.
     SECTION 5.1 Resolutions, etc. The Lead Arrangers shall have received from
each Obligor, as applicable, (i) a copy of a good standing certificate, dated a
date reasonably close to the Closing Date, for each such Obligor from its
jurisdiction of organization and (ii) a certificate, dated as of the Closing
Date, duly executed and delivered by such Obligor’s Secretary or Assistant
Secretary, managing member or general partner, as applicable, as to
     (a) resolutions of each such Obligor’s Board of Directors (or other
managing body, in the case of a Person other than a corporation) then in full
force and effect authorizing, to the extent relevant, all aspects of the
Transaction applicable to such Obligor and the execution, delivery and
performance of each Loan Document to be executed by such Obligor and the
transactions contemplated hereby and thereby;
     (b) the incumbency and signatures of those of its officers, managing member
or general partner, as applicable, authorized to act with respect to each Loan
Document to be executed by such Obligor; and

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     (c) the full force and validity of each Organic Document of such Obligor
and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Obligor canceling
or amending the prior certificate of such Obligor.
     SECTION 5.2 Closing Date Certificate. The Lead Arrangers shall have
received the Closing Date Certificate, dated as of the Closing Date and duly
executed and delivered by an Authorized Officer of the Borrower and the Company,
in which certificate the Borrower and the Company shall agree and acknowledge
and certify that the statements made therein are, true and correct
representations and warranties of the Borrower and the Company as of such date,
and, at the time each such certificate is delivered, such statements shall in
fact be true and correct. All documents and agreements (including Transaction
Documents) required to be appended to the Closing Date Certificate shall be in
form and substance reasonably satisfactory to the Lead Arrangers, shall have
been executed and delivered by the requisite parties, and shall be in full force
and effect.
     SECTION 5.3 Consummation of Transaction. The Lead Arrangers shall have
received evidence reasonably satisfactory to it that all actions necessary to
consummate the Transaction (other than the entering into of the Senior Notes
Documents and the issuance of the Senior Notes) shall have been taken in
accordance in all material respects with all applicable law and in accordance
with the terms of each applicable Transaction Document, without amendment or
waiver of any material provision thereof, unless approved by the Lead Arrangers
in their reasonable discretion.
     SECTION 5.4 Patriot Act Disclosures. Within five Business Days’ prior to
the Closing Date, the Lenders or the Lead Arrangers shall have received copies
of all Patriot Act Disclosures as reasonably requested by the Lenders or the
Lead Arrangers.
     SECTION 5.5 Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender that has requested a Note, such
Lender’s Notes duly executed and delivered by an Authorized Officer of the
Borrower.
     SECTION 5.6 Financial Information, etc. The Lead Arrangers shall have
received,
     (a) audited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of (i) the Company and its Subsidiaries as
at July 2, 2003, July 2, 2004 and July 2, 2005;
     (b) unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows for the 39-week period ended April 1, 2006;
     (c) a pro forma consolidated balance sheet and related pro forma
consolidated statements of income and cash flows as of and for the twelve-month
period ending at the most recent Fiscal Quarter ending at least 45 days prior to
the Closing Date, prepared after giving effect to the Transaction as if the
Transaction had occurred as of such date (in the case of such balance sheet) or
at the beginning of such period (in the case of such

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other financial statements), in each case which financial statements shall not
be materially inconsistent with the financial statements or forecasts previously
provided to the Lenders; and
     (d) detailed projected financial statements of the Company and its
Subsidiaries for the seven Fiscal Years ended after the Closing Date, which
projections shall include quarterly projections for the first two Fiscal Years
after the Closing Date.
     SECTION 5.7 Compliance Certificate. The Lead Arrangers shall have received
an initial Compliance Certificate on a pro forma basis as if the Transaction had
been consummated and the Loans had been made as of April 1, 2006 and as to such
items therein as the Lead Arrangers reasonably request, dated the date of the
Loans, duly executed (and with all schedules thereto duly completed) and
delivered by the chief financial or accounting Authorized Officer of the Company
which Compliance Certificate shall set forth such items therein as the Lead
Arrangers may reasonably request, including demonstrating that the Company’s pro
forma Leverage Ratio is not greater than 4.80:1.00.
     SECTION 5.8 Guaranty. The Lead Arrangers shall have received counterparts
of the Guaranty, dated as of the Closing Date, duly executed and delivered by an
Authorized Officer of Company and each U.S. Subsidiary (other than the
Borrower).
     SECTION 5.9 Security Agreement; Intercreditor Agreement.
     (a) The Lead Arrangers shall have received executed counterparts of the
Security Agreement, dated as of the Closing Date, duly executed, authorized or
delivered by each Obligor, as applicable, together with
     (i) certificates (in the case of Capital Securities that are securities (as
defined in the UCC)) evidencing all of the issued and outstanding Capital
Securities owned by each Obligor in its U.S. Subsidiaries and, subject to
Section 7.1.11, 65% of the issued and outstanding Voting Securities (to the
extent certificated and permitted by applicable law to be removed from any
particular jurisdiction) of each Foreign Subsidiary (together with all the
issued and outstanding non-voting Capital Securities (to the extent certificated
and permitted by applicable law to be removed from any particular jurisdiction)
of such Foreign Subsidiary) directly owned by each Obligor, which certificates
in each case shall be accompanied by undated instruments of transfer duly
executed in blank, or, if any Capital Securities (in the case of Capital
Securities that are uncertificated securities (as defined in the UCC)),
confirmation and evidence reasonably satisfactory to the Lead Arrangers that the
security interest therein has been transferred to and perfected by the
Collateral Agent for the benefit of the Secured Parties in accordance with
Articles 8 and 9 of the UCC and all U.S. laws otherwise applicable to the
perfection of the pledge of such Capital Securities (provided, the foregoing may
be delivered to the First Lien Collateral Agent subject to the terms, conditions
and restrictions set forth in the Intercreditor Agreement);

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     (ii) Filing Statements suitable in form and naming each Obligor as a debtor
and the Collateral Agent as the secured party, or other similar instruments or
documents to be filed under the UCC of all jurisdictions as may be necessary or,
in the opinion of the Lead Arrangers, desirable to perfect the security
interests of the Collateral Agent pursuant to the Security Agreement;
     (iii) UCC Form UCC-3 termination statements, if any, necessary to release
all Liens and other rights of any Person in any collateral described in any
security agreement previously granted by any Person, together with such other
UCC Form UCC-3 termination statements as the Lead Arrangers may reasonably
request from such Obligors; and
     (iv) certified copies of UCC Requests for Information or Copies (Form
UCC-11), or a similar search report certified by a party reasonably acceptable
to the Lead Arrangers, dated a date reasonably near to the Closing Date, listing
all effective financing statements which name any Obligor (under its present
legal name) as the debtor, together with copies of such financing statements
(none of which shall evidence a Lien on any collateral described in any Loan
Document, other than a Permitted Lien).
     (b) The Lead Arrangers shall have received the Intercreditor Agreement,
executed and delivered by the First Lien Collateral Agent.
     SECTION 5.10 Intellectual Property Security Agreements. The Administrative
Agent shall have received a Patent Security Agreement, a Copyright Security
Agreement and a Trademark Security Agreement, as applicable, each dated as of
the Closing Date, duly executed and delivered by each Obligor that, pursuant to
the Security Agreement, is required to provide such intellectual property
security agreements to the Collateral Agent.
     SECTION 5.11 Filing Agent, etc. All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial Code
(Form UCC-3) termination statements (collectively, the “Filing Statements”)
required pursuant to the Loan Documents shall have been delivered by counsel to
the Lead Arrangers to CT Corporation System or another similar filing service
company acceptable to the Lead Arrangers (the “Filing Agent”). The Filing Agent
shall have acknowledged in a writing satisfactory to the Lead Arrangers and
their counsel (i) the Filing Agent’s receipt of all Filing Statements, (ii) that
the Filing Statements required pursuant to the Loan Documents, have either been
submitted for filing in the appropriate filing offices or will be submitted for
filing in the appropriate offices within ten days following the Closing Date and
(iii) that the Filing Agent will notify the Agents and their counsel of the
results of such submissions and will provide recorded copies of the same within
30 days following the Closing Date.
     SECTION 5.12 Insurance. The Lead Arrangers and the Collateral Agent shall
have received, certificates of insurance in form and substance reasonably
satisfactory to the Lead Arrangers, evidencing coverage required to be
maintained pursuant to each Loan Document and naming the Collateral Agent as
loss payee or additional insured, as applicable.

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     SECTION 5.13 Opinions of Counsel. The Lead Arrangers shall have received
opinions, dated the Closing Date and addressed to the Lead Arrangers, the Agents
and all Lenders, from
     (a) Kirkland & Ellis LLP, counsel to the Obligors, in form and substance
reasonably satisfactory to the Lead Arrangers; and
     (b) Maryland counsel to the Company, in form and substance, and from
counsel, reasonably satisfactory to the Lead Arrangers.
     SECTION 5.14 Closing Fees, Expenses, etc. The Lead Arrangers shall have
received for its own account, or for the account of each Lender, as the case may
be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and,
if then invoiced, 10.3.
     SECTION 5.15 Form 10. The financial information concerning the Branded
Apparel Business, the Company, the Borrower and its Subsidiaries and the
management, corporate and legal structure of the Company, the Borrower and each
of the Subsidiary Guarantors contained in the Company’s Form 10 filed with the
Securities and Exchange Commission in connection with the Spin-Off, including
all amendments and modifications thereto, shall be consistent in all material
respects with the information previously provided to the Lead Arrangers and the
other Lenders.
     SECTION 5.16 Litigation. There shall exist no action, suit, investigation
or other proceeding pending or threatened in writing in any court or before any
arbitrator or governmental or regulatory agency or authority that could
reasonably be expected to have a Material Adverse Effect.
     SECTION 5.17 Approval. All material and necessary governmental and third
party consents and approvals shall have been obtained (without the imposition of
any material and adverse conditions that are not reasonably acceptable to the
Lenders) and shall remain in effect and all applicable waiting periods shall
have expired without any material and adverse action being taken by any
competent authority. The Lead Arrangers shall be reasonably satisfied that the
Spin-Off is to be consummated and the Dividend issued, in each case in
accordance with applicable laws and governmental regulations.
     SECTION 5.18 Debt Rating. The Company shall have obtained a senior secured
debt rating (of any level) in respect of the Loans from each of S&P and Moody’s,
which ratings (of any level) shall remain in effect on the Closing Date.
     SECTION 5.19 Satisfactory Legal Form. All documents executed or submitted
pursuant hereto by or on behalf of any Obligor on or before the Closing Date
shall be reasonably satisfactory in form and substance to the Lead Arrangers,
and the Lead Arrangers shall have received all information, approvals, opinions,
documents or instruments as the Lead Arrangers or their counsel may reasonably
request.
     SECTION 5.20 Compliance with Warranties, No Default, etc. Both before and
after giving effect to any Loan (but, if any Default of the nature referred to
in Section 8.1.5 shall have occurred with respect to any other Indebtedness,
without giving effect to the application, directly or indirectly, of the
proceeds thereof) the following statements shall be true and correct:

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     (a) the representations and warranties set forth in each Loan Document
shall, in each case, be true and correct in all material respects with the same
effect as if then made (unless stated to relate solely to an earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date); and
     (b) no Default shall have then occurred and be continuing.
     SECTION 5.21 Borrowing Request, etc. The Administrative Agent shall have
received a Borrowing Request. Each of the delivery of a Borrowing Request and
the acceptance by the Borrower of the proceeds of such Loan shall constitute a
representation and warranty by the Borrower that on the date of such Loan (both
immediately before and after giving effect to such Loan and the application of
the proceeds thereof) the statements made in Section 5.20 are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
     In order to induce the Secured Parties to enter into this Agreement and to
make Loans hereunder, the Company and the Borrower represent and warrant to each
Secured Party, after giving effect to the consummation of the IP Purchase and
the Spin-Off, as set forth in this Article.
     SECTION 6.1 Organization, etc. Each Obligor (i) is validly organized and
existing and in good standing under the laws of the state or jurisdiction of its
incorporation or organization, (ii) is duly qualified to do business and is in
good standing as a foreign entity in each jurisdiction where the nature of its
business requires such qualification, except where the failure to be so
qualified or in good standing could not reasonably be expected to have a
Material Adverse Effect and (iii) has full organizational power and authority
and holds all requisite governmental licenses, permits and other approvals to
enter into and perform its Obligations under each Loan Document to which it is a
party, and except to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect, to (a) own and hold under lease its
property and (b) to conduct its business substantially as currently conducted by
it.
     SECTION 6.2 Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Obligor of each Loan Document executed or to be
executed by it, each Obligor’s participation in the consummation of all aspects
of the Transaction, and the execution, delivery and performance by the Company
or (if applicable) any Obligor of the agreements executed and delivered by it in
connection with the Transaction are in each case within such Person’s powers,
have been duly authorized by all necessary action, and do not
     (a) contravene any (i) Obligor’s Organic Documents, (ii) court decree or
order binding on or affecting any Obligor or (iii) law or governmental
regulation binding on or affecting any Obligor; or
     (b) result in (i) or require the creation or imposition of, any Lien on any
Obligor’s properties (except as permitted by this Agreement) or (ii) a default
under any material contractual restriction binding on or affecting any Obligor.

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     SECTION 6.3 Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or other Person (other than those that have been, or on the Closing
Date will be, duly obtained or made and which are, or on the Closing Date will
be, in full force and effect) is required for the consummation of the
Transaction or the due execution, delivery or performance by any Obligor of any
Loan Document to which it is a party, or for the due execution, delivery and/or
performance of Transaction Documents, in each case by the parties thereto or the
consummation of the Transaction. Neither the Company nor any of its Subsidiaries
is required to be registered as an “investment company” within the meaning of
the Investment Company Act of 1940, as amended.
     SECTION 6.4 Validity, etc. Each Obligor has duly executed and delivered
each of the Loan Documents and each of the Transaction Documents to which it is
a party, and each Loan Document and each Transaction Document to which any
Obligor is a party constitutes the legal, valid and binding obligations of such
Obligor, enforceable against such Obligor in accordance with their respective
terms (except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally and by principles of equity).
     SECTION 6.5 Financial Information. The financial statements of the Company
and its Subsidiaries furnished to the Administrative Agent and each Lender
pursuant to Section 5.6 (other than forecasts, projections, budgets and
forward-looking information) have been prepared in accordance with GAAP
consistently applied (except where specifically so noted on such financial
statements), and present fairly in all material respects the consolidated
financial condition of the Persons covered thereby as at the dates thereof and
the results of their operations for the periods then ended. All balance sheets,
all statements of income and of cash flow and all other financial information of
each of the Company and its Subsidiaries furnished pursuant to Section 7.1.1
have been and will for periods following the Closing Date be prepared in
accordance with GAAP consistently applied with the financial statements
delivered pursuant to Section 5.6, and do or will present fairly in all material
respects the consolidated financial condition of the Persons covered thereby as
at the dates thereof and the results of their operations for the periods then
ended. Notwithstanding anything contained herein to the contrary, it is hereby
acknowledged and agreed by the Administrative Agent, each Lead Arranger and each
Lender that (i) any financial or business projections furnished to the
Administrative Agent, any Lead Arranger or any Lender by the Company or any of
its Subsidiaries under any Loan Document are subject to significant
uncertainties and contingencies, which may be beyond the Company’s and/or its
Subsidiaries’ control, (ii) no assurance is given by any of the Company or its
Subsidiaries that the results forecast in any such projections will be realized
and (iii) the actual results may differ from the forecast results set forth in
such projections and such differences may be material.
     SECTION 6.6 No Material Adverse Change. There has been no material adverse
change in the business, financial condition, operations, performance or assets
of the Company and its Subsidiaries, taken as a whole, since July 2, 2005.

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     SECTION 6.7 Litigation, Labor Controversies, etc. There is no pending or,
to the knowledge of the Company or any of its Subsidiaries, threatened (in
writing) litigation, action, proceeding, labor controversy or investigation:
     (a) affecting the Company, any of its Subsidiaries or any other Obligor, or
any of their respective properties, businesses, assets or revenues, which could
reasonably be expected to have a Material Adverse Effect; or
     (b) which purports to affect the legality, validity or enforceability of
any Loan Document, the Transaction Documents or the Transaction.
     SECTION 6.8 Subsidiaries. The Company has no Subsidiaries, except those
Subsidiaries which are (a) identified in Item 6.8 of the Disclosure Schedule,
(b) permitted to have been organized or acquired in accordance with
Sections 7.2.5 or 7.2.10 or (c) a Foreign Supply Chain Entity that has been
redesignated as a Foreign Subsidiary.
     SECTION 6.9 Ownership of Properties. The Company and each of its
Subsidiaries (other than a Receivables Subsidiary) owns (a) in the case of owned
real property, good and legal title to, (b) in the case of owned personal
property, good and valid title to, and (c) in the case of leased real or
personal property, valid and enforceable (subject to bankruptcy, insolvency,
reorganization or similar laws) leasehold interests (as the case may be) in, all
of its properties and assets, tangible and intangible, of any nature whatsoever,
free and clear in each case of all Liens or claims, except for Permitted Liens.
Set forth in Item 6.9 of the Disclosure Schedule is a true and complete list of
each Mortgaged Property.
     SECTION 6.10 Taxes. The Company and each of its Subsidiaries has filed all
material tax returns and reports required by law to have been filed by it and
has paid all Taxes thereby shown to be due and owing, except any such Taxes
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books or except to the extent such failure could not reasonably be
expected to result in a Material Adverse Effect.
     SECTION 6.11 Pension and Welfare Plans. During the twelve-consecutive-month
period prior to the Closing Date and prior to the date of any Loan hereunder, no
steps have been taken to terminate any Pension Plan which has caused or could
reasonably be expected to cause Company or any Subsidiary to incur any
liability, and no contribution failure has occurred with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA with
respect to any assets of Company or any Subsidiary. No condition exists or event
or transaction has occurred with respect to any Pension Plan which might result
in the incurrence by the Company of any material liability, fine or penalty.
     SECTION 6.12 Environmental Warranties.
     (a) All facilities and property (including underlying groundwater) owned or
leased by the Company or any of its Subsidiaries have been, and continue to be,
owned or leased by the Company and its Subsidiaries in compliance with all
Environmental Laws, except for any such noncompliance which could not reasonably
be expected to have a Material Adverse Effect;

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     (b) there have been no past, and there are no pending or, to the Company’s
knowledge (after due inquiry), threatened (in writing) (i) claims, complaints,
notices or requests for information received by the Company or any of its
Subsidiaries with respect to any alleged violation of any Environmental Law, or
(ii) complaints, notices or inquiries to the Company or any of its Subsidiaries
regarding potential liability under any Environmental Law except for claims,
complaints, notices, requests for information or inquiries with respect to
violations of or potential liability under any Environmental Laws that could not
reasonably be expected to have a Material Adverse Effect;
     (c) there have been no Releases of Hazardous Materials at, on or under any
property now or previously owned, operated or leased by the Company or any of
its Subsidiaries that have had, or could reasonably be expected to have, a
Material Adverse Effect;
     (d) the Company and its Subsidiaries have been issued and are in compliance
with all permits, certificates, approvals, licenses and other authorizations
relating to environmental matters, except for any such non-issuance or any such
noncompliance which could not reasonably be expected to have a Material Adverse
Effect;
     (e) no property now or, to the Company’s knowledge (after due inquiry),
previously owned, operated or leased by the Company or any of its Subsidiaries
is listed or proposed for listing (with respect to owned, operated property
only) on the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any similar state list of sites requiring investigation or clean-up, which
listing could reasonably be expected to have a Material Adverse Effect;
     (f) there are no underground storage tanks, active or abandoned, including
petroleum storage tanks, on or under any property now or previously owned,
operated or leased by the Company or any of its Subsidiaries that, singly or in
the aggregate, have, or could reasonably be expected to have, a Material Adverse
Effect;
     (g) neither the Company nor any Subsidiary has directly transported or
directly arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list or which is the
subject of federal, state or local enforcement actions or other investigations
which could reasonably be expected to lead to material claims against the
Company or such Subsidiary for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA which, if adversely resolved
could, in any of the foregoing cases, reasonably be expected to have a Material
Adverse Effect;
     (h) there are no polychlorinated biphenyls or friable asbestos present at
any property now or previously owned, operated or leased by the Company or any
Subsidiary that, singly or in the aggregate, have, or could reasonably be
expected to have, a Material Adverse Effect; and

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     (i) no conditions exist at, on or under any property now or, to the
knowledge of the Company (after due inquiry), previously owned, operated or
leased by the Company which, with the passage of time, or the giving of notice
or both, would give rise to liability under any Environmental Law, except for
such liability that could not reasonably be expected to have a Material Adverse
Effect.
     SECTION 6.13 Accuracy of Information. None of the factual information
(other than projections, forecasts, budgets and forward-looking information)
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of any Obligor in connection with any Loan Document or any transaction
contemplated hereby (including the Transaction) (taken as a whole) contains any
untrue statement of a material fact, or omits to state any material fact
necessary to make any such information not materially misleading as of the date
such information was furnished; provided however that (i) any financial or
business projections furnished to the Administrative Agent, any Lead Arranger or
any Lender by the Company or any of its Subsidiaries under any Loan Document are
subject to significant uncertainties and contingencies, which may be beyond the
Company’s and/or its Subsidiaries’ control, (ii) no assurance is given by any of
the Company or its Subsidiaries that the results forecast in any such
projections will be realized and (iii) the actual results may differ from the
forecast results set forth in such projections and such differences may be
material.
     SECTION 6.14 Regulations U and X. No Obligor is engaged in the business of
extending credit for the purpose of buying or carrying margin stock, and no
proceeds of any Loans will be used to purchase or carry margin stock or
otherwise for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation U or Regulation X. Terms for which meanings are provided in
F.R.S. Board Regulation U or Regulation X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
     SECTION 6.15 Compliance with Contracts, Laws, etc. The Company and each of
its Subsidiaries have performed their obligations under agreements to which the
Company or a Subsidiary is a party and have complied with all applicable laws,
rules, regulations and orders except were the failure to do so could not
reasonably be expected to have a Material Adverse Effect. The Company and each
of its Subsidiaries (a) are not listed on the “Specially Designated Nationals
and Blocked Person List” maintained by the Office of Foreign Assets Control
(“OFAC”), the Department of the Treasury, or included in any executive orders
relating thereto and (b) have used the proceeds of the Loans without violating
in any material respect any of the foreign asset control regulations of OFAC or
any enabling statute or executive order relating thereto having the force of
law.
     SECTION 6.16 Solvency. The Company and its Subsidiaries (taken as a whole),
both before and after giving effect to any Loans, are Solvent.
ARTICLE VII
COVENANTS
     SECTION 7.1 Affirmative Covenants. The Company agrees with each Lender and
each Agent that until the Termination Date has occurred, the Company will, and
will cause its Subsidiaries to, perform or cause to be performed the obligations
set forth below. The Borrower

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agrees with each Lender and each Agent that after giving effect to the
consummation of the IP Purchase and the Spin-Off until the Termination Date has
occurred, the Borrower will perform, comply with and be bound by all of the
agreements, covenants and obligations contained in this Article which are
applicable to the Borrower or its properties.
     SECTION 7.1.1 Financial Information, Reports, Notices, etc. The Company
will furnish each Lender and the Administrative Agent copies of the following
financial statements, reports, notices and information:
     (a) within the earlier of (i) 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year and (ii) so long as the Company is a
public reporting company at such time, such earlier date as the SEC requires the
filing of such information (or if the Company is required to file such
information on a Form 10-Q with the SEC, promptly following such filing), an
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
the end of such Fiscal Quarter and consolidated statements of income and cash
flow of the Company and its Subsidiaries for such Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, and including (in each case), in comparative form, the
figures for the corresponding Fiscal Quarter in, and year to date portion of,
the immediately preceding Fiscal Year, certified as complete and correct in all
material respects (subject to audit, normal year-end adjustments and the absence
of footnote disclosure) by the chief financial officer, chief executive officer,
president, treasurer or assistant treasurer of the Company;
     (b) within the earlier of (i) 90 days after the end of each Fiscal Year and
(ii) so long as the Company is a public reporting company at such time, such
earlier date as the SEC requires the filing of such information (or if the
Company is required to file such information on a Form 10-K with the SEC,
promptly following such filing), (i) a copy of the consolidated balance sheet of
the Company and its Subsidiaries, and the related consolidated statements of
income and cash flow of the Company and its Subsidiaries for such Fiscal Year,
setting forth in comparative form the figures for the immediately preceding
Fiscal Year, audited (without any Impermissible Qualification) by
Pricewaterhouse Coopers LLP or such other independent public accountants
selected by the Company and reasonably acceptable to the Administrative Agent,
which shall include a calculation of the financial covenants set forth in
Section 7.2.4 and stating that, in performing the examination necessary to
deliver the audited financial statements of the Company, no knowledge was
obtained of any Event of Default with respect to financial matters and (ii) a
consolidated budget (within level of detail comparable to the quarterly
financial statements delivered pursuant to clause (a)) for the following Fiscal
Year including a projected consolidated balance sheet and related statements of
projected operations and cash flows as of the end of and for such following
Fiscal Year;
     (c) concurrently with the delivery of the financial information pursuant to
clauses (a) and (b), a Compliance Certificate, executed by the chief financial
officer, chief executive officer, president, treasurer or assistant treasurer of
the Company, (i) showing compliance with the financial covenants set forth in
Section 7.2.4 and stating that no Default has occurred and is continuing (or, if
a Default has occurred, specifying

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the details of such Default and the action that the Company or an Obligor has
taken or proposes to take with respect thereto), (ii) stating that no Subsidiary
has been formed or acquired since the delivery of the last Compliance
Certificate (or, if a Subsidiary has been formed or acquired since the delivery
of the last Compliance Certificate, a statement that such Subsidiary has
complied with Section 7.1.8 if applicable) and (iii) in the case of a Compliance
Certificate delivered concurrently with the financial information pursuant to
clause (b), a calculation of Excess Cash Flow;
     (d) as soon as possible and in any event within three Business Days after
the Company or any other Obligor obtains knowledge of the occurrence of a
Default, a statement of an Authorized Officer on behalf of the Company setting
forth details of such Default and the action which the Company or such Obligor
has taken and proposes to take with respect thereto;
     (e) as soon as possible and in any event within three Business Days after
the Company or any other Obligor obtains knowledge of (i) the commencement of
any litigation, action, proceeding or labor controversy of the type and
materiality described in Section 6.7 or (ii) any other event, change or
circumstance that has had, or could reasonably be expected to have, a Material
Adverse Effect, notice thereof and, to the extent the Administrative Agent
requests, copies of all documentation relating thereto, if any;
     (f) within three Business Days after the sending or filing thereof, copies
of all reports, notices, prospectuses and registration statements which any
Obligor files with the SEC or any national securities exchange; provided that
such delivery shall be deemed to have been made upon delivery of notice to the
Administrative Agent that such statements or reports are available on the
Internet via the EDGAR system of the SEC;
     (g) promptly upon becoming aware of (i) the institution of any steps by any
Person to terminate any Pension Plan, (ii) the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give rise to a
Lien under Section 302(f) of ERISA, (iii) the taking of any action with respect
to a Pension Plan which could result in the requirement that any Obligor furnish
a bond or other security to the PBGC or such Pension Plan, or (iv) the
occurrence of any event with respect to any Pension Plan which could reasonably
be expected to result in the incurrence by any Obligor of any material
liability, fine or penalty, notice thereof and copies of all documentation
relating thereto;
     (h) promptly upon receipt thereof, copies of all final “management letters”
submitted to the Company or any other Obligor by the independent public
accountants referred to in clause (b) in connection with each audit made by such
accountants;
     (i) promptly following the mailing or receipt of any notice or report
(other than identical reports or notices delivered hereunder) delivered under
the terms of the First Lien Loan Documents, the Bridge Loan Documents or the
Senior Note Documents, copies of such notice or report;

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     (j) all Patriot Act Disclosures, to the extent reasonably requested by the
Administrative Agent or any Lender; and
     (k) such other financial and other information as any Lender through the
Administrative Agent may from time to time reasonably request (including
information and reports in such detail as the Administrative Agent may request
with respect to the terms of and information provided pursuant to the Compliance
Certificate).
Information required to be delivered pursuant to clauses (a) and (b) of
Section 7.1.1 shall be deemed to have been delivered to the Administrative Agent
on the date on which the Company provides written notice to the Administrative
Agent that such information is available on the Internet via the EDGAR system of
the SEC (to the extent such information is available as described in such
notice). Information required to be delivered pursuant to this Section 7.1.1 may
also be delivered by electronic communication pursuant to procedures approved by
the Administrative Agent pursuant to Section 9.11.
     SECTION 7.1.2 Maintenance of Existence; Material Obligations; Compliance
with Contracts, Laws, etc. The Company will, and will cause each of its
Subsidiaries to, preserve and maintain its legal existence, rights (charter and
statutory), franchises, permits, licenses and approvals (in each case, except as
otherwise permitted by Section 7.2.10), perform in all respects their
obligations, including obligations under agreements to which the Company or a
Subsidiary is a party, and comply in all respects with all applicable laws,
rules, regulations and orders, including the payment (before the same become
delinquent), of all obligations, including all Taxes imposed upon the Company or
its Subsidiaries or upon their property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside on the books of the Company
or its Subsidiaries, as applicable except, in each case, where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
     SECTION 7.1.3 Maintenance of Properties. Except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect the Company will, and will cause each of its Subsidiaries to, maintain,
preserve, protect and keep its and their respective properties in good repair,
working order and condition (ordinary wear and tear, casualty and condemnation
excepted), and make necessary repairs, renewals and replacements so that the
business carried on by the Company and its Subsidiaries may be properly
conducted at all times, unless the Company or such Subsidiary determines in good
faith that the continued maintenance of such property is no longer economically
desirable, necessary or useful to the business of the Company or any of its
Subsidiaries or the Disposition of such property is otherwise permitted by
Sections 7.2.10 or 7.2.11.
     SECTION 7.1.4 Insurance. The Company will, and will cause each of its
Subsidiaries to maintain:
     (a) insurance on its property with financially sound and reputable
insurance companies against loss and damage in at least the amounts (and with
only those deductibles) customarily maintained, and against such risks as are
typically insured

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against in the same general area, by Persons of comparable size engaged in the
same or similar business as the Company and its Subsidiaries; and
     (b) all worker’s compensation, employer’s liability insurance or similar
insurance as may be required under the laws of any state or jurisdiction in
which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section shall (i) name the Collateral Agent on behalf of the Secured Parties as
mortgagee (in the case of property insurance) or additional insured (in the case
of liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty days’ prior written
notice to the Collateral Agent and (ii) without duplication, be in addition to
any requirements to maintain specific types of insurance contained in the other
Loan Documents.
     SECTION 7.1.5 Books and Records. The Company will, and will cause each of
its Subsidiaries to, keep books and records in accordance with GAAP which
accurately reflect in all material respects all of its business affairs and
transactions and permit each Secured Party or any of their respective
representatives, at reasonable times during normal business hours and intervals
upon reasonable notice to the Company and except after the occurrence and during
the continuance of an Event of Default not more frequently than once per Fiscal
Year, to visit each Obligor’s offices, to discuss such Obligor’s financial
matters with its officers and employees, and its independent public accountants
(provided that management of the Company shall be notified and allowed to be
present at all such meetings and the Company hereby authorizes such independent
public accountant to discuss each Obligor’s financial matters with each Secured
Party or their representatives) and to examine (and photocopy extracts from) any
of its books and records. The Company shall pay any reasonable fees of such
independent public accountant incurred in connection with any Secured Party’s
exercise of its rights pursuant to this Section.
     SECTION 7.1.6 Environmental Law Covenant. The Company will, and will cause
each of its Subsidiaries to:
     (a) use and operate all of its and their facilities and properties in
compliance with all Environmental Laws, keep all permits, approvals,
certificates, licenses and other authorizations required under Environmental
Laws in effect and remain in compliance therewith, and handle all Hazardous
Materials in compliance with all applicable Environmental Laws, in each case
except where failure to do so could not reasonably be expected to have a
Material Adverse Effect; and
     (b) promptly notify the Administrative Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries relating to the
condition of its facilities and properties in respect of, or as to compliance
with, Environmental Laws, the subject matter of which could reasonably be
expected to have a Material Adverse Effect, and shall promptly resolve any
non-compliance with Environmental Laws (except as could not reasonably be
expected to have a Material Adverse Effect) and keep its property free of any
Lien imposed by any Environmental Law.

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     SECTION 7.1.7 Use of Proceeds. The Borrower will apply the proceeds of the
Loans to finance the IP Purchase and to pay the fees, costs and expenses related
to the IP Purchase.
     SECTION 7.1.8 Future Guarantors, Security, etc. Subject to Section 7.1.11,
the Company will, and will cause each U.S. Subsidiary to, execute any documents,
authorize the filing of Filing Statements, execute agreements and instruments,
and take all commercially reasonable further action (including filing Mortgages
to the extent required hereby) that may be required under applicable law, or
that the Administrative Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and first priority (subject to Permitted Liens)
of the Liens created or intended to be created by the Loan Documents. Subject to
the terms, conditions and restrictions set forth in the Intercreditor Agreement,
the Company will cause any subsequently acquired or organized U.S. Subsidiary to
execute a supplement (in form and substance reasonably satisfactory to the
Administrative Agent) to the Guaranty and each other applicable Loan Document in
favor of the Secured Parties. In addition, subject to the terms, conditions and
restrictions set forth in the Intercreditor Agreement, from time to time, each
of the Borrower and the Company will, at its own cost and expense, promptly
secure the Obligations by pledging or creating, or causing to be pledged or
created, perfected Liens with respect to such of its assets and properties as
the Administrative Agent or the Required Lenders shall designate, it being
agreed that it is the intent of the parties that the Obligations shall be
secured by, among other things, substantially all the assets of the Company and
its U.S. Subsidiaries and personal property acquired subsequent to the Closing
Date; provided that (a) neither the Company nor its U.S. Subsidiaries shall be
required to pledge more than 65% of the Voting Securities of any Foreign
Subsidiary that is directly owned by any Obligor, (b) neither the Company nor
any U.S. Subsidiary shall be required to create or perfect any security interest
in any leased real property or any owned real property with a fair market value
(as determined by the Company in good faith) less than $2,000,000, (c) to the
extent the Organic Documents of a Foreign Supply Chain Entity (regardless of a
redesignation as a Foreign Subsidiary) prohibit the creation or perfection of a
security interest in the Capital Securities of such Foreign Supply Chain Entity,
no Obligor will be required to create or perfect a security interest in such
Capital Securities and (d) the Company will not be required to execute and
deliver any Foreign Pledge Agreement with respect to any Foreign Subsidiary
(i) whose assets are valued (as reasonably determined by the Company) at less
than $25,000,000 or (ii) if the Company and the Administrative Agent reasonably
determine that it is commercially impractical to deliver a Foreign Pledge
Agreement in such jurisdiction. Such Liens will be created under the Loan
Documents in form and substance reasonably satisfactory to the Agents, and the
Company shall deliver or cause to be delivered to the Agents all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Administrative Agent shall reasonably request to
evidence compliance with this Section.
     SECTION 7.1.9 Hedging Agreements. Within 60 days following the Closing
Date, the Company and/or the Borrower will enter into interest rate swap, cap,
collar or similar arrangements with a First Lien Lender, Lender or any other
Person reasonably acceptable to the Lenders designed to protect the Company
and/or the Borrower against fluctuations in interest rates for a period of at
least three years from the Closing Date, in an amount that would cause not less
than 50% of the Indebtedness outstanding, under the Loan Documents, the First
Lien Loan

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Documents, the Bridge Loan Documents and the Senior Note Documents to bear
interest at a fixed rate.
     SECTION 7.1.10 Maintenance of Ratings. The Borrower will use its
commercially reasonable efforts to cause a senior secured credit rating with
respect to the Loans from each of S&P and Moody’s to be available at all times
until the Stated Maturity Date.
     SECTION 7.1.11 Post-Closing Obligations.
     (a) Foreign Pledge Agreements. Within 90 days after the Closing Date (or
such later dates from time to time as consented to by the Administrative Agent
in its reasonable discretion), all Foreign Pledge Agreements shall have been
duly executed and delivered by all parties thereto and shall remain in full
force and effect, and all Liens granted to the Collateral Agent thereunder shall
be duly perfected to provide the Collateral Agent with a security interest in
and Lien on all collateral granted thereunder free and clear of other Liens,
except to the extent reasonably consented to by the Administrative Agent;
provided that the Administrative Agent may waive the requirement to perfect a
pledge on the Capital Securities of any Foreign Subsidiary otherwise required to
be pledged hereunder if they determine, in their reasonable discretion, that the
value of the assets owned by such Foreign Subsidiary or the EBITDA generated by
such Foreign Subsidiary, is immaterial when taken as a whole.
     (b) Mortgages. Subject to the limitation in clause (d) of Section 7.1.8,
within 90 days after the Closing Date (or such later dates from time to time as
consented to by the Administrative Agent in its reasonable discretion), the
Agents shall have received counterparts of each Mortgage with respect to a
Mortgaged Property, duly executed and delivered by the applicable Obligor,
together with:
     (i) evidence of the completion (or reasonably satisfactory arrangements for
the completion) of all recordings and filings of each Mortgage as necessary to
create a valid, perfected first priority (subject to Permitted Liens) Lien
against the properties purported to be covered thereby;
     (ii) mortgagee’s title insurance policies in favor of the Collateral Agent
for the benefit of the Secured Parties in amounts not exceeding the fair market
value of the insured property and in form and substance and issued by insurers,
reasonably satisfactory to the Lead Arrangers, with respect to the property
purported to be covered by each Mortgage, insuring that title to such property
is marketable and that the interests created by each Mortgage constitute valid
first Liens thereon (subject to Permitted Liens), and, if required by the Lead
Arrangers and if available, shall include revolving credit endorsement,
comprehensive endorsement, variable rate endorsement, access and utilities
endorsements, mechanic’s lien endorsement and such other endorsements as the
Lead Arrangers shall reasonably request and shall be accompanied by evidence of
the payment in full of all premiums thereon; and

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     (iii) mortgage releases releasing any mortgage in favor of any other Person
on any Mortgaged Property.
     (c) Excluded Contracts. The Company agrees to use commercially reasonable
efforts to cause the Excluded Contracts to become owned by the Company or the
applicable Subsidiary within 180 days of the Closing Date.
     (d) Foreign Stock Certificates. Within 10 Business Days following the
Closing Date (or such later dates from time to time as consented to by the
Administrative Agent in its reasonable discretion), the Company agrees to
deliver certificates (in each case accompanied by undated instruments of
transfer duly executed in blank) evidencing, 65% of the issued and outstanding
Voting Securities (to the extent certificated and permitted by applicable law to
be removed from any particular jurisdiction) of each Foreign Subsidiary
(together with all the issued and outstanding non-voting Capital Securities (to
the extent certificated and permitted by applicable law to be removed from any
particular jurisdiction) of such Foreign Subsidiary) directly owned by each
Obligor to the extent not previously delivered, together with a revised
Schedule I to the Security Agreement accurately reflecting the newly delivered
certificates.
     (e) Spin-Off Related Transfers. Within 180 days following the Closing Date
(or such later dates from time to time as consented to by the Administrative
Agent in its reasonable discretion), the Company will (i) cause Hanesbrands
Philippines, Inc.; HBI Sourcing Asia Limited; Sara Lee Apparel International
(Shanghai) Co. Ltd. (to be renamed Hanesbrands International (Shanghai) Co.
Ltd.); Sara Lee Apparel India Private Limited (to be renamed Hanesbrands India
Private Limited); and SL Sourcing India Private Ltd. (to be renamed HBI Sourcing
India Private Ltd.) to become Subsidiaries of the Company, (ii) own 50% of the
issued and outstanding Capital Securities of Playtex Marketing Corporation and
(iii) consummate the transfer of assets relating to the Branded Apparel Business
from SL Hong Kong Ltd., Sara Lee Philippines Inc. and Hanesbrands Philippines
Inc. to Subsidiaries of the Company. The Company represents and warrants that
the fair market value of the assets to be transferred pursuant to this clause
have a fair market value of less than $6,500,000.
     (f) NT Investment Company, Inc. Within three Business Days following the
Closing Date, the Company shall cause NT Investment Company, Inc. to be in good
standing (and deliver to the Administrative Agent a copy of the good standing
certificate) in the State of Delaware.
     SECTION 7.2 Negative Covenants. The Company covenants and agrees with each
Lender and each Agent that until the Termination Date has occurred, the Company
will, and will cause its Subsidiaries to, perform or cause to be performed the
obligations set forth below. Subject to the terms, conditions and restrictions
set forth in the Intercreditor Agreement, the Company covenants and agrees with
each Lender and each Agent that after giving effect to the consummation of the
IP Purchase and the Spin-Off until the Termination Date has occurred, the
Company will perform, comply with and be bound by all of the agreements,
covenants and obligations contained in this Article which are applicable to the
Company or its properties.

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     SECTION 7.2.1 Business Activities; Accounting Policies. The Company will
not, and will not permit any of its Subsidiaries to, (a) engage in any business
activity except those business activities engaged in on the date of this
Agreement and activities reasonably related, supportive, complementary,
ancillary or incidental thereto or reasonable extensions thereof or (b) change
its accounting policies or financial reporting practices from such policies and
practices in effect of the Closing Date, including any change to the ending
dates with respect to the Company and its Subsidiaries’ Fiscal Year (except to
the extent set forth in the definition thereof) or Fiscal Quarters.
     SECTION 7.2.2 Indebtedness. The Company will not, and will not permit any
of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, other than:
     (a) Indebtedness in respect of the Obligations;
     (b) unsecured Indebtedness of the Obligors (i) under the Senior Note
Documents and the Bridge Loan Documents in an aggregate principal amount not to
exceed $500,000,000, as such amount is reduced on or after the Closing Date in
accordance with the terms hereof and (ii) under senior notes whether issued
pursuant to a supplement to the Senior Note Indenture or any other senior note
indenture, the terms of which are reasonably satisfactory to the Administrative
Agent, so long as (x) the aggregate principal amount thereunder does not exceed
$500,000,000 and (y) the proceeds therefor are applied to repay Loans in
accordance with clause (h) of Section 3.1.1;
     (c) Indebtedness existing as of the Closing Date which is identified in
Item 7.2.2(c) of the Disclosure Schedule, and refinancings, refundings,
reallocations, renewals or extensions of such Indebtedness in a principal amount
not in excess of that which is outstanding on the Closing Date (as such amount
has been reduced following the Closing Date);
     (d) unsecured Indebtedness (i) incurred in the ordinary course of business
of the Company and its Subsidiaries (including open accounts extended by
suppliers on normal trade terms in connection with purchases of goods and
services which are not overdue for a period of more than 90 days or, if overdue
for more than 90 days, as to which a dispute exists and adequate reserves in
conformity with GAAP have been established on the books of the Company or such
Subsidiary) and (ii) in respect of performance, surety or appeal bonds provided
in the ordinary course of business, but excluding (in each case), Indebtedness
incurred through the borrowing of money or Contingent Liabilities of borrowed
money;
     (e) Indebtedness (i) in respect of industrial revenue bonds or other
similar governmental or municipal bonds, (ii) evidencing the deferred purchase
price of newly acquired property or incurred to finance the acquisition of
equipment of the Company and its Subsidiaries (pursuant to purchase money
mortgages or otherwise, whether owed to the seller or a third party) used in the
ordinary course of business of the Company and its Subsidiaries (provided that,
such Indebtedness is incurred within 270 days of the acquisition of such
property) and (iii) in respect of Capitalized Lease Liabilities; provided

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that, the aggregate amount of all Indebtedness outstanding pursuant to this
clause shall not at any time exceed $180,000,000;
     (f) Indebtedness of (i) an Obligor owing to any other Obligor and of
(ii) any Subsidiary (other than a Receivables Subsidiary and the Borrower) that
is not a Subsidiary Guarantor or any Foreign Supply Chain Entity owing to an
Obligor, which Indebtedness (A) shall, if payable to the Company, the Borrower
or a Subsidiary Guarantor, not be discharged for any consideration other than
payment in full or in part in cash or through the conversion of such
Indebtedness to equity (provided that only the amount repaid in part shall be
discharged); and (B) shall not (when aggregated with the amount of Investments
made by the Company, the Borrower and the Subsidiary Guarantors in Subsidiaries
which are not Subsidiary Guarantors and in Foreign Supply Chain Entities under
clause (e)(i) of Section 7.2.5 and Indebtedness converted to equity pursuant to
clause (f)(ii)(A)), exceed $330,000,000 at any one time outstanding;
     (g) unsecured Indebtedness (not evidenced by a note or other instrument) of
an Obligor owing to a Subsidiary (other than the Borrower) that is not a
Subsidiary Guarantor and has previously executed and delivered to the
Administrative Agent the Interco Subordination Agreement;
     (h) Indebtedness of the Obligors incurred pursuant to the terms of the
First Lien Loan Documents in a principal amount not to exceed the Maximum First
Lien Debt Amount (as defined in the Intercreditor Agreement), as such amount is
reduced on or after the Closing Date in accordance with the terms hereof;
     (i) Indebtedness of a Person existing at the time such Person became a
Subsidiary of the Company, but only if such Indebtedness was not created or
incurred in contemplation of such Person becoming a Subsidiary and the aggregate
outstanding amount of all Indebtedness existing pursuant to this clause does not
exceed $120,000,000 at any time;
     (j) Indebtedness incurred pursuant to a Permitted Securitization and
Standard Securitization Undertakings;
     (k) unsecured Indebtedness of the Company and its Subsidiaries incurred to
(i) finance Permitted Acquisitions (including obligations of the Company and its
Subsidiaries under indemnification, adjustment of purchase price, earn-out,
incentive, non-compete, consulting, deferred compensation or other similar
arrangements incurred by such Person in connection therewith) or (ii) refinance
any other Indebtedness permitted to be incurred under clauses (a), (b), (e), (i)
and (n) of this Section 7.2.2;
     (l) Indebtedness in respect of Hedging Obligations entered into in the
ordinary course of business and not for speculative purposes;
     (m) Indebtedness of any Foreign Subsidiary owing to any other Foreign
Subsidiary;

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     (n) Indebtedness (whether unsecured or secured by Liens) of Foreign
Subsidiaries in an aggregate outstanding principal amount not to exceed
$180,000,000 at any one time outstanding and Contingent Liabilities of any
Obligor in respect thereof;
     (o) Indebtedness incurred in the ordinary course of business in connection
with cash pooling arrangements, cash management and other Indebtedness incurred
in the ordinary course of business in respect of netting services, overdraft
protections and similar arrangements in each case in connection with cash
management and deposit accounts;
     (p) Indebtedness consisting of the financing of insurance premiums in the
ordinary course of business;
     (q) unsecured Indebtedness of Company and its Subsidiaries representing the
obligation of such Person to make payments with respect to the cancellation or
repurchase of Capital Securities of officers, employees or directors (or their
estates) of the Company or such Subsidiaries; and
     (r) other Indebtedness of the Company and its Subsidiaries (other than
Indebtedness of Foreign Subsidiaries owing to the Company or Subsidiary
Guarantors or of a Receivables Subsidiary) in an aggregate amount at any time
outstanding not to exceed $120,000,000;
provided that, no Indebtedness otherwise permitted by clauses (c), (e), (f)(ii),
(i), (k) or (r) shall be assumed, created or otherwise incurred if an Event of
Default has occurred and is then continuing.
     SECTION 7.2.3 Liens. The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien upon any of
its property (including Capital Securities of any Person), revenues or assets,
whether now owned or hereafter acquired, except the following (collectively
“Permitted Liens”):
     (a) Liens securing payment of the Obligations;
     (b) Liens in connection with a Permitted Securitization;
     (c) Liens existing as of the Closing Date and disclosed in Item 7.2.3(c) of
the Disclosure Schedule securing Indebtedness described in clause (c) of Section
7.2.2, and refinancings, refundings, reallocations, renewals or extensions of
such Indebtedness; provided that, no such Lien shall encumber any additional
property (except for accessions to such property and the products and proceeds
thereof ) and the amount of Indebtedness secured by such Lien is not increased
from that existing on the Closing Date;
     (d) Liens securing Indebtedness of the type permitted under clause (e) of
Section 7.2.2; provided that, (i) such Lien is granted within 270 days after
such Indebtedness is incurred, (ii) the Indebtedness secured thereby does not
exceed the lesser of the cost or the fair market value of the applicable
property, improvements or

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equipment at the time of such acquisition (or construction) and (iii) such Lien
secures only the assets that are the subject of the Indebtedness referred to in
such clause;
     (e) Liens securing Indebtedness permitted by clause (i) of Section 7.2.2;
provided that such Liens existed prior to such Person becoming a Subsidiary,
were not created in anticipation thereof and attach only to specific tangible
assets of such Person;
     (f) Liens in favor of carriers, warehousemen, mechanics, repairmen,
materialmen, customs and revenue authorities and landlords and other similar
statutory Liens and Liens in favor of suppliers (including sellers of goods
pursuant to customary reservations or retention of title, in each case) granted
in the ordinary course of business for amounts not overdue for a period of more
than 60 days or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books or with respect to which the failure to make payment
could not reasonably be expected to have a Material Adverse Effect;
     (g) (i) Liens incurred or deposits made in the ordinary course of business
in connection with worker’s compensation, unemployment insurance or other forms
of governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, bids, leases, trade contracts or other similar
obligations (other than for borrowed money) entered into in the ordinary course
of business or to secure obligations on surety and appeal bonds or performance
bonds, performance and completion guarantees and other obligations of a like
nature (including those to secure health, safety and environmental obligations)
incurred in the ordinary course of business and (ii) obligations in respect of
letters of credit or bank guarantees that have been posted to support payment of
the items set forth in the immediately preceding clause (i);
     (h) judgment Liens that are being appealed in good faith or with respect to
which execution has been stayed or the payment of which is covered in full
(subject to a customary deductible) by insurance maintained with responsible
insurance companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
     (i) easements, rights-of-way, covenants, conditions, building codes,
restrictions, reservations, minor defects or irregularities in title and other
similar encumbrances and matters that would be disavowed by a full survey of
real property not interfering in any material respect with the value or use of
the affected or encumbered real property to which such Lien is attached;
     (j) Liens securing Indebtedness permitted by clause (h) (subject to the
Intercreditor Agreement) or (n) of Section 7.2.2;
     (k) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a creditor depository
institution and Liens attaching to commodity trading accounts or other
commodities brokerage accounts incurred in the ordinary course of business;

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     (l) (i) licenses, sublicenses, leases or subleases granted to third Persons
in the ordinary course of business not interfering in any material respect with
the business of the Company or any of its Subsidiaries, (ii) other agreements
with respect to the use and occupancy of real property entered into in the
ordinary course of business or in connection with a Disposition permitted under
the Loan Documents or (iii) the rights reserved or vested in any Person by the
terms of any lease, license, franchise, grant or permit held by Company or any
of its Subsidiaries or by a statutory provision, to terminate any such lease,
license, franchise, grant or permit, or to require annual or periodic payments
as a condition to the continuance thereof;
     (m) Liens on the property of the Company or any of its Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, licenses and statutory obligations, (ii) Contingent
Obligations on surety and appeal bonds, and (iii) other non-delinquent
obligations of a like nature; in each case, incurred in the ordinary course of
business;
     (n) Liens on Receivables transferred to a Receivables Subsidiary under a
Permitted Securitization;
     (o) Liens upon specific items or inventory or other goods and proceeds of
the Company or any of its Subsidiaries securing such Person’s obligations in
respect of bankers’ acceptances or documentary letters of credit issued or
created for the account of such Person to facilitate the shipment or storage of
such inventory or other goods;
     (p) Liens (i) (A) on advances of cash or Cash Equivalent Investments in
favor of the seller of any property to be acquired in an Investment permitted
pursuant to Section 7.2.5 to be applied against the purchase price for such
Investment and (B) consisting of an agreement to Dispose of any property in a
Disposition permitted under Section 7.2.11, in each case under this clause (i),
solely to the extent such Investment or Disposition, as the case may be, would
have been permitted on the date of the creation of such Lien and (ii) on earnest
money deposits of cash or Cash Equivalent Investments made by the Company or any
of its Subsidiaries in connection with any letter of intent or purchase
agreement permitted hereunder;
     (q) Liens arising from precautionary Uniform Commercial Code financing
statement filings (or similar filings under other applicable Law) regarding
leases entered into by the Company or any of its Subsidiaries in the ordinary
course of business;
     (r) Liens (i) arising out of conditional sale, title retention, consignment
or similar arrangements for sale of goods (including under Article 2 of the UCC)
and Liens that are contractual rights of set-off relating to purchase orders and
other similar agreements entered into by the Company or any of its Subsidiaries
and (ii) relating to the establishment of depository relations with banks not
given in connection with the issuance of Indebtedness and (iii) relating to
pooled deposit or sweep accounts of any Company or any Subsidiary to permit
satisfaction of overdraft or similar obligations in each case in the ordinary
course of business and not prohibited by this Agreement;

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     (s) other Liens securing Indebtedness or other obligations permitted under
this Agreement and outstanding in an aggregate principal amount not to exceed
$90,000,000;
     (t) ground leases in respect of real property on which facilities owned or
leased by the Company or any of its Subsidiaries are located or any Liens senior
to any lease, sub-lease or other agreement under which the Company or any of its
Subsidiaries uses or occupies any real property;
     (u) Liens constituting security given to a public or private utility or any
Governmental Authority as required in the ordinary course of business;
     (v) pledges or deposits of cash and Cash Equivalent Investments securing
deductibles, self-insurance, co-payment, co-insurance, retentions and similar
obligations to providers of insurance in the ordinary course of business;
     (w) Liens on (A) incurred premiums, dividends and rebates which may become
payable under insurance policies and loss payments which reduce the incurred
premiums on such insurance policies and (B) rights which may arise under State
insurance guarantee funds relating to any such insurance policy, in each case
securing Indebtedness permitted to be incurred pursuant to clause (p) of
Section 7.2.2; and
     (x) Liens for Taxes not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books or with respect to which the failure to make payment
could not reasonably be expected to have a Material Adverse Effect.
     SECTION 7.2.4 Financial Condition and Operations. The Company will not
permit any of the events set forth below to occur.
     (a) The Company will not permit the Leverage Ratio as of the last day of
any Fiscal Quarter occurring during any period set forth below to be greater
than the ratio set forth opposite such period:

      Period   Leverage Ratio
Each Fiscal Quarter ending between December 15, 2006 and April 15, 2007
  6.00:1.00
 
   
Each Fiscal Quarter ending between April 16, 2007 and July 15, 2007
  5.50:1.00
 
   
Each Fiscal Quarter ending between July 16, 2007 and October 15, 2007
  5.25:1.00

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      Period   Leverage Ratio
Each Fiscal Quarter ending between October 16, 2007 and April 15, 2008
  5.00:1.00
 
   
Each Fiscal Quarter ending between April 16, 2008 and October 15, 2008
  4.75:1.00
 
   
Each Fiscal Quarter ending between October 16, 2008 and April 15, 2009
  4.50:1.00
 
   
Each Fiscal Quarter ending between April 16, 2009 and July 15, 2009
  4.25:1.00
 
   
Each Fiscal Quarter ending between July 16, 2009 and October 15, 2009
  4.00:1.00
 
   
Each Fiscal Quarter thereafter
  3.75:1.00

     (b) The Company will not permit the Interest Coverage Ratio as of the last
day of any Fiscal Quarter occurring during any period set forth below to be less
than the ratio set forth opposite such period:

      Period   Interest Coverage Ratio
Each Fiscal Quarter ending between December 15, 2006 and July 15, 2007
  1.50:1.00
 
   
Each Fiscal Quarter ending between July 16, 2007 and January 15, 2008
  1.75:1.00
 
   
Each Fiscal Quarter ending between January 16, 2008 and October 15, 2008
  2.00:1.00
 
   
Each Fiscal Quarter ending between October 16, 2008 and April 15, 2009
  2.25:1.00
 
   
Each Fiscal Quarter thereafter
  2.50:1.00

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     SECTION 7.2.5 Investments. The Company will not, and will not permit any of
its Subsidiaries to, purchase, make, incur, assume or permit to exist any
Investment in any other Person, except:
     (a) Investments existing on the Closing Date and identified in
Item 7.2.5(a) of the Disclosure Schedule;
     (b) Cash Equivalent Investments;
     (c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
     (d) Investments consisting of any deferred portion (including promissory
notes and non-cash consideration) of the sales price received by the Company or
any Subsidiary in connection with any Disposition permitted under
Section 7.2.11;
     (e) Investments by way of contributions to capital or purchases of Capital
Securities (i) by the Company in any Subsidiaries or by any Subsidiary in other
Subsidiaries or by the Company or any Subsidiary in any Foreign Supply Chain
Entity; provided that, the aggregate amount of intercompany loans made pursuant
to clause (f)(ii) of Section 7.2.2, Indebtedness converted into equity pursuant
to clause (f)(ii)(A) of Section 7.2.2 and Investments under this clause made by
the Company, the Borrower and Subsidiary Guarantors in (x) Subsidiaries that are
not Subsidiary Guarantors (other than the Borrower) or (y) any Foreign Supply
Chain Entity shall not exceed the amount set forth in clause (f)(ii) of
Section 7.2.2 at any one time outstanding, or (ii) by any Subsidiary in the
Company;
     (f) Investments constituting (i) accounts receivable arising or acquired,
(ii) trade debt granted, or (iii) deposits made in connection with the purchase
price of goods or services, in each case in the ordinary course of business;
     (g) Investments by way of the acquisition of Capital Securities or the
purchase or other acquisition of all or substantially all of the assets or
business of any Person, or of assets constituting a business unit, or line of
business or division of, such Person, in each case constituting Permitted
Acquisitions in an amount, when aggregated with the amount expended under clause
(b) of Section 7.2.10, does not exceed the amount set forth in clause (b) of
Section 7.2.10 in any Fiscal Year;
     (h) Investments constituting Capital Expenditures permitted pursuant to
Section 7.2.7;

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     (i) Investments in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person under a Permitted Securitization;
provided that any Investment in a Receivables Subsidiary is in the form of a
Purchase Money Note, contribution of additional receivables and related assets
or any equity interests;
     (j) Investments constituting loans or advances to officers, directors or
employees made in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount not to exceed
$12,000,000;
     (k) Investments by any Foreign Subsidiary in any other Foreign Subsidiary;
     (l) Investments in the ordinary course of business consisting of
(i) endorsements for collection or deposit, (ii) customary arrangements with
customers or (iii) Hedging Obligations not for speculative purposes;
     (m) advances of payroll payments to employees in the ordinary course of
business; and
     (n) other Investments in an amount not to exceed $120,000,000 over the term
of this Agreement;
provided that (I) any Investment which when made complies with the requirements
of the definition of the term “Cash Equivalent Investment” may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; and (II) no Investment otherwise permitted by clauses
(e)(i) (to the extent such Investment relates to an Investment in a Foreign
Subsidiary or a Foreign Supply Chain Entity), (g) or (n) shall be permitted to
be made if any Event of Default has occurred and is continuing.
     SECTION 7.2.6 Restricted Payments, etc. The Company will not, and will not
permit any of its Subsidiaries (other than a Receivables Subsidiary) to, declare
or make a Restricted Payment, or make any deposit for any Restricted Payment,
other than (a) Restricted Payments made by Subsidiaries to the Company or wholly
owned Subsidiaries, (b) the Dividend, (c) cashless exercises of stock options,
(d) cash payments by Company in lieu of the issuance of fractional shares upon
exercise or conversion of Equity Equivalents, (e) Restricted Payments in
connection with the share repurchases required by the employee stock ownership
programs or required under employee agreements, (f) so long as (i) no Specified
Default has occurred and is continuing or would result therefrom, and (ii) both
before and after giving effect to such Restricted Payment, the Borrower is in
pro forma compliance with Section 7.2.4, Permitted Additional Restricted
Payments and (g) Restricted Payments made by a Foreign Supply Chain Entity that
has been redesignated as a Foreign Subsidiary, to the Persons owning such
Foreign Subsidiary’s Capital Securities.
     SECTION 7.2.7 Capital Expenditures.
     (a) Subject (in the case of Capitalized Lease Liabilities), to clause (e)
of Section 7.2.2, the Company will not, and will not permit any of its
Subsidiaries to, make or commit to make Capital Expenditures except Capital
Expenditures in an aggregate amount not to exceed $156,000,000 in any Fiscal
Year; provided that, to the extent that

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the amount of Capital Expenditures made by the Company and its Subsidiaries
during any Fiscal Year is less than the aggregate amount permitted (including
after giving effect to this proviso) for such Fiscal Year, then such unutilized
amount may be carried forward and utilized by the Company and its Subsidiaries
to make Capital Expenditures in any succeeding Fiscal Year. Notwithstanding
anything to the contrary with respect to any Fiscal Year of the Company during
which a Permitted Acquisition is consummated and for each Fiscal Year subsequent
thereto, the amount of Capital Expenditures permitted under the preceding
sentence applicable to each such Fiscal Year shall be increased by an amount
equal to 5% of the purchase price of each Permitted Acquisition (the “Acquired
Permitted Capital Expenditure Amount”); provided, however, with respect to the
Fiscal Year during which any such Permitted Acquisition occurs, the amount of
additional Capital Expenditures permitted as a result of this sentence shall be
an amount equal to the product of (x) the Acquired Permitted Capital Expenditure
Amount and (y) a fraction, the numerator of which is the number of days
remaining in such Fiscal Year after the date such Permitted Acquisition is
consummated and the denominator of which is the actual number of days in such
Fiscal Year.
     (b) Notwithstanding anything to the contrary contained in clause (a) above,
for any Fiscal Year, the amount of Capital Expenditures that would otherwise be
permitted in such Fiscal Year pursuant to this Section 7.2.7 (including as a
result of the carry-forward described in the proviso to the first sentence of
clause (a) above) may be increased by an amount not to exceed $12,000,000 (the
“CapEx Pull-Forward Amount”). The actual CapEx Pull-Forward Amount in respect of
any such Fiscal Year shall reduce, on a dollar-for-dollar basis, the amount of
Capital Expenditures that would have been permitted to be made in the
immediately succeeding Fiscal Year (provided that the Company and its
Subsidiaries may apply the CapEx Pull-Forward Amount in such immediately
succeeding Fiscal Year).
     SECTION 7.2.8 Payments With Respect to Certain Indebtedness. The Company
will not, and will not permit any of its Subsidiaries to,
     (a) make any payment or prepayment of principal of, or premium or interest
on, any Indebtedness incurred under the Bridge Loan Documents or the Senior Note
Documents (including any redemption or retirement thereof) (i) other than on (or
after) the stated, scheduled date for payment of interest set forth in the
applicable Bridge Loan Documents or Senior Note Documents, respectively, or
(ii) which would violate the terms of this Agreement or the applicable Bridge
Loan Documents or Senior Note Documents;
     (b) except as otherwise permitted by clause (a) above, prior to the
Termination Date, redeem, retire, purchase, defease or otherwise acquire any
Indebtedness under the Bridge Loan Documents or the Senior Note Documents (other
than with proceeds from the issuance of the Borrower’s Capital Securities (to
the extent not otherwise required to be used to repay Loans pursuant to clause
(e) of Section 3.1.1) permitted to be used to redeem Senior Notes in accordance
with the terms of the Senior Note Documents);

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     (c) make any deposit (including the payment of amounts into a sinking fund
or other similar fund) for any of the foregoing purposes; or
     (d) make any payment or prepayment of principal of, or premium or interest
on, any Indebtedness that is by its express written terms subordinated to the
payment of the Obligations at any time when an Event of Default has occurred and
is continuing.
Notwithstanding anything to the contrary contained in this Section, the Company
shall be permitted to refinance, in whole or in part, the Indebtedness under the
Bridge Loan Documentation with the proceeds from the issuance of Senior Notes
     SECTION 7.2.9 Issuance of Capital Securities. The Company will not permit
any of its Subsidiaries (other than a Receivables Subsidiary and any Foreign
Supply Chain Entity that has been redesignated as a Foreign Subsidiary) to issue
any Capital Securities (whether for value or otherwise) to any Person other than
to the Company or another wholly owned Subsidiary (other than any director’s
qualifying shares or investments by foreign nationals mandated by applicable
laws).
     SECTION 7.2.10 Consolidation, Merger; Permitted Acquisitions, etc. The
Company will not, and will not permit any of its Subsidiaries to, liquidate or
dissolve, consolidate with, or merge into or with, any other Person, or purchase
or otherwise acquire all or substantially all of the assets of any Person (or
any division or line of business thereof), except
     (a) any Subsidiary may liquidate or dissolve voluntarily into, and may
merge with and into, the Company, the Borrower or any other Subsidiary (provided
that a Subsidiary Guarantor may only liquidate or dissolve into, or merge with
and into, the Company or another Subsidiary Guarantor), and the assets or
Capital Securities of any Subsidiary may be purchased or otherwise acquired by
the Company, the Borrower or any other Subsidiary (provided that the assets or
Capital Securities of any Subsidiary Guarantor may only be purchased or
otherwise acquired by the Company, the Borrower or another Subsidiary
Guarantor); provided, further, that in no event shall any Subsidiary consolidate
with or merge with and into any other Subsidiary unless after giving effect
thereto, the Collateral Agent shall have a perfected pledge of, and security
interest in and to, at least the same percentage of the issued and outstanding
interests of Capital Securities (on a fully diluted basis) and other assets of
the surviving Person as the Collateral Agent had immediately prior to such
merger or consolidation in form and substance reasonably satisfactory to the
Agents, pursuant to such documentation and opinions as shall be necessary in the
opinion of the Agents to create, perfect or maintain the collateral position of
the Secured Parties therein; and
     (b) so long as no Event of Default has occurred and is continuing or would
occur after giving effect thereto, the Company or any of its Subsidiaries may
purchase the Capital Securities, all or substantially all of the assets of any
Person (or any division or line of business thereof), or acquire such Person by
merger, in each case, if such purchase or acquisition constitutes a Permitted
Acquisition, and the amount expended in connection with such transaction, when
aggregated with the amount expended under clause (g) of Section 7.2.5, does not
exceed $120,000,000 per Fiscal Year plus the

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amount of Net Disposition Proceeds the Company or the Borrower is not required
to repay pursuant to Section 3.1.1 and Section 3.1.1 of the First Lien Credit
Agreement and not otherwise reinvested hereunder (so long as such proceeds are
actually used for such purpose) and the Excluded Equity Proceeds Amount (so long
as such proceeds are actually used for such purpose); provided that any Capital
Securities of the Company issued to the seller in connection with any Permitted
Acquisition shall not result in a deduction of amounts available to consummate
Permitted Acquisitions hereunder.
     SECTION 7.2.11 Permitted Dispositions. The Company will not, and will not
permit any of its Subsidiaries to, Dispose of any of the Company’s or such
Subsidiaries’ assets (including accounts receivable and Capital Securities of
Subsidiaries) to any Person in one transaction or series of transactions unless
such Disposition is:
     (a) inventory or obsolete, no longer used or useful, damaged, worn out or
surplus property Disposed of in the ordinary course of its business (including,
the abandonment of intellectual property which is obsolete, no longer used or
useful or that in the Company’s good faith judgment is no longer material in the
conduct of the Company and its Subsidiaries’ business taken as a whole):
     (b) permitted by Section 7.2.10;
     (c) accounts receivable or any related asset Disposed of pursuant to a
Permitted Securitization;
     (d) of property to the extent that (i) such property is exchanged for
credit against the purchase price of similar replacement property or (ii) the
proceeds of such Disposition are promptly applied to the purchase price of such
replacement property;
     (e) of property by the Company, the Borrower or any other Subsidiary
provided that if the transferor of such property is an Obligor (i) the
transferee must be an Obligor or (ii) to the extent such transaction constitutes
an Investment such transaction is permitted under Section 7.2.5;
     (f) of cash or Cash Equivalent Investments;
     (g) of accounts receivable in connection with compromise, write down or
collection thereof in the ordinary course of business;
     (h) constituting leases, subleases, licenses or sublicenses of property
(including intellectual property) in the ordinary course of business and which
do not materially interfere with the business of the Company and its
Subsidiaries;
     (i) constituting a transfer of property subject to a Casualty Event
(i) upon receipt of Net Casualty Proceeds of such Casualty Event or (ii) to a
Governmental Authority as a result of condemnation;

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     (j) sales of a non-core assets acquired in connection with a Permitted
Acquisition which are not used or useful or are duplicative in the business of
the Company or its Subsidiaries;
     (k) a grant of options to purchase, lease or acquire real or personal
property in the ordinary course of business, so long as the Disposition
resulting from the exercise of such option would otherwise be permitted under
this Section 7.2.11;
     (l) Dispositions of Investments in Foreign Supply Chain Entities (or a
Foreign Supply Chain Entity that has been redesignated as a Foreign Subsidiary),
to the extent required by, or made pursuant to buy/sell arrangements between the
Foreign Supply Chain Entity parties forth in, the contracts applicable to such
Foreign Supply Chain Entity (or a Foreign Supply Chain Entity that has been
redesignated as a Foreign Subsidiary);
     (m) Dispositions of the property described on Item 7.2.11(m) of the
Disclosure Schedule; or
     (n) a Disposition of assets not otherwise permitted pursuant to preceding
clauses (a)-(m) and (i) is for fair market value and the consideration received
consists of no less than 75% in cash and Cash Equivalent Investments, (ii) the
Net Disposition Proceeds received from such Disposition, together with the Net
Disposition Proceeds of all other assets Disposed of pursuant to this clause
since the Closing Date, does not exceed (individually or in the aggregate)
$120,000,000 and (iii) the Net Disposition Proceeds from such Disposition are
applied pursuant to Sections 3.1.1 and 3.1.2.
     SECTION 7.2.12 Modification of Certain Agreements. The Company will not,
and will not permit any of its Subsidiaries to, consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in,
     (a) the First Lien Loan Documents, except in accordance with the
Intercreditor Agreement;
     (b) any of the other Transaction Documents other than any amendment,
supplement, waiver or modification which would not be materially adverse to the
Secured Parties; or
     (c) the Organic Documents of the Company or any of its Subsidiaries (other
than a Receivables Subsidiary) other than any amendment, supplement, waiver or
modification which would not be materially adverse to the Secured Parties.
     SECTION 7.2.13 Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries to, enter into or cause or permit to exist
any arrangement, transaction or contract (including for the purchase, lease or
exchange of property or the rendering of services) with any of its other
Affiliates, unless such arrangement, transaction or contract is on fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
could obtain in an arm’s-length transaction with a Person that is not an
Affiliate other than

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arrangements, transactions or contracts (a) between or among the Company and any
of its Subsidiaries, (b) in connection with the cash management of the Company
and its Subsidiaries in the ordinary course of business, (c) in connection with
a Permitted Securitization including Standard Securitization Undertakings or
(d) that is a Transaction Document.
     SECTION 7.2.14 Restrictive Agreements, etc. The Company will not, and will
not permit any of its Subsidiaries (other than a Receivables Subsidiary) to,
enter into any agreement prohibiting
     (a) the creation or assumption of any Lien upon its properties, revenues or
assets, whether now owned or hereafter acquired;
     (b) the ability of any Obligor to amend or otherwise modify any Loan
Document; or
     (c) the ability of any Subsidiary (other than a Receivables Subsidiary) to
make any payments, directly or indirectly, to the Company, including by way of
dividends, advances, repayments of loans, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document or in any First Lien Loan Document (subject to the terms of the
Intercreditor Agreement), (iii) in the cases of clause (a) and (c), in any
Bridge Loan Document or Senior Note Document, (iv) in the case of clause (a),
any agreement governing any Indebtedness permitted by clause (n) of
Section 7.2.2 as to the assets financed with the proceeds of such Indebtedness,
(v) in the case of clauses (a) and (c), any agreement of a Foreign Subsidiary
governing the Indebtedness permitted to be incurred or permitted to exist
hereunder, (vi) with respect to any Receivables Subsidiary, in the case of
clauses (a) and (c), the documentation governing any Securitization permitted
hereunder, (vii) solely with respect to clause (a), any arrangement or agreement
arising in connection with a Disposition permitted under this Agreement (but
then only with respect to the assets being so Disposed), (viii) solely with
respect to clause (a) and (c), are already binding on a Subsidiary when it is
acquired, (ix) solely with respect to clause (a), customary restrictions in
leases, subleases, licenses and sublicenses and (x) solely with respect to
clause (a) and (c), any agreement of a Foreign Supply Chain Entity that was
redesignated as a Foreign Subsidiary.
     SECTION 7.2.15 Sale and Leaseback. The Company will not, and will not
permit any of its Subsidiaries to, directly or indirectly enter into any
agreement or arrangement providing for the sale or transfer by it of any
property (now owned or hereafter acquired) to a Person and the subsequent lease
or rental of such property or other similar property from such Person, except
for agreements and arrangements with respect to property the fair market value
(as determined in good faith by the Board of Directors of the Company) of which
does not exceed $120,000,000 in the aggregate following the Closing Date and the
Net Disposition Proceeds of which are applied pursuant to Sections 3.1.1 and
3.1.2.
     SECTION 7.2.16 Investments in European TM SPV. Notwithstanding anything
else set forth herein, the Company will not, and will not permit any of its
Subsidiaries to make any

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additional Investment in European TM SPV or transfer any of their respective
assets to European TM SPV.
ARTICLE VIII
EVENTS OF DEFAULT
     SECTION 8.1 Listing of Events of Default. Each of the following events or
occurrences described in this Article shall constitute an “Event of Default”.
     SECTION 8.1.1 Non-Payment of Obligations. The Borrower shall default in the
payment or prepayment when due of
     (a) any principal of any Loan;
     (b) any interest on any Loan or any fee described in Article III, and such
default shall continue unremedied for a period of three days after such interest
or fee was due; or
     (c) any other monetary Obligation, and such default shall continue
unremedied for a period of 10 Business Days after such amount was due.
     SECTION 8.1.2 Breach of Warranty. Any representation or warranty of any
Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect in any
material respect when made or deemed to have been made.
     SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations. The
Company shall default in the due performance or observance of any of its
obligations under Section 7.1.1, Section 7.1.7, Section 7.1.11 or Section 7.2.
     SECTION 8.1.4 Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after the earlier to occur of
(a) notice thereof given to the Company by any Agent or any Lender or (b) the
date on which any Obligor has knowledge of such default.
     SECTION 8.1.5 Default on Other Indebtedness. A default shall occur in the
payment of any amount when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any principal or stated amount of, or interest
or fees on, any Indebtedness (other than Indebtedness described in
Section 8.1.1) of the Company or any of its Subsidiaries (other than a
Receivables Subsidiary) or any other Obligor having a principal or stated
amount, individually or in the aggregate, in excess of $60,000,000, or a default
shall occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause or declare such
Indebtedness to become due and payable or to require such Indebtedness to be
prepaid, redeemed, purchased or defeased, or require an offer to purchase or
defease such Indebtedness to

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be made, prior to its expressed maturity; provided, that a default, event or
condition described in this Section in respect of the First Lien Loan Documents
shall not at any time constitute an Event of Default (other than (i) a default,
event or condition set forth in Section 8.1.1 of the First Lien Credit Agreement
which shall constitute an Event of Default unless such default, event or
condition is not cured or waived within 10 Business Days after the occurrence of
such default, event or condition or (ii) the declaration of all or any portion
of such Indebtedness to be immediately due and payable which shall constitute an
immediate Event of Default).
     SECTION 8.1.6 Judgments. Any (a) judgment or order for the payment of money
individually or in the aggregate in excess of $60,000,000 (exclusive of any
amounts fully covered by insurance (less any applicable deductible) or an
indemnity by any other third party Person and as to which the insurer or such
Person has acknowledged its responsibility to cover such judgment or order not
denied in writing) shall be rendered against the Company or any of its
Subsidiaries (other than a Receivables Subsidiary) and such judgment shall not
have been vacated or discharged or stayed or bonded pending appeal within
45 days after the entry thereof or enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (b) non-monetary
judgment or order that has had, or could reasonably be expected to have, a
Material Adverse Effect.
     SECTION 8.1.7 Pension Plans. Any of the following events shall occur with
respect to any Pension Plan
     (a) the institution of any steps by the Company, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a result
of such termination, the Company or any such member could be required to make a
contribution to such Pension Plan, or could reasonably expect to incur a
liability or obligation to such Pension Plan, in excess of $60,000,000; or
     (b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
     SECTION 8.1.8 Change in Control. Any Change in Control shall occur.
     SECTION 8.1.9 Bankruptcy, Insolvency, etc. The Company, any of its
Subsidiaries (other than a Receivables Subsidiary) or any other Obligor shall
     (a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness generally to pay, debts as they become due;
     (b) apply for, consent to, or acquiesce in the appointment of a trustee,
receiver, sequestrator or other custodian for any substantial part of the
property of any thereof, or make a general assignment for the benefit of
creditors;
     (c) in the absence of such application, consent or acquiescence in or
permit or suffer to exist the appointment of a trustee, receiver, sequestrator
or other custodian for a substantial part of the property of any thereof, and
such trustee, receiver, sequestrator or other custodian shall not be discharged,
stayed, vacated or bonded pending appeal within 60 days; provided that, the
Borrower, each Subsidiary and each other Obligor hereby

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expressly authorizes each Secured Party to appear in any court conducting any
relevant proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents;
     (d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Borrower, any Subsidiary or any Obligor, such case or
proceeding shall be consented to or acquiesced in by the Borrower, such
Subsidiary or such Obligor, as the case may be, or shall result in the entry of
an order for relief or shall remain for 60 days undismissed, undischarged,
unstayed or unbonded pending appeal; provided that, the Borrower, each
Subsidiary and each Obligor hereby expressly authorizes each Secured Party to
appear in any court conducting any such case or proceeding during such 60-day
period to preserve, protect and defend their rights under the Loan Documents; or
     (e) take any action authorizing, or in furtherance of, any of the
foregoing.
     SECTION 8.1.10 Impairment of Security, etc. Any Loan Document or any Lien
granted thereunder (effecting a material portion of the Collateral, taken as a
whole) shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of any Obligor party thereto (other than pursuant to a
failure of the Administrative Agent, any collateral agent appointed by the
Administrative Agent or the Lenders to take any action within the sole control
of such Person); any Obligor or any other party shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability; or, except as permitted under any Loan Document, any Lien
securing any Obligation shall, in whole or in part, cease to be a perfected
first priority Lien or any Obligor shall so assert (other than, in each case,
pursuant to a failure of the Administrative Agent, any collateral agent
appointed by the Administrative Agent or the Lenders to take any action within
the sole control of such Person).
     SECTION 8.2 Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 with respect to the Borrower shall
occur, the Commitment (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding Loans and all
other Obligations shall automatically be and become immediately due and payable,
without notice or demand to any Person.
     SECTION 8.3 Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of
Section 8.1.9 with respect to the Borrower) shall occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative Agent, upon the
direction of the Required Lenders, shall by notice to the Borrower declare all
or any portion of the outstanding principal amount of the Loans and other
Obligations to be due and payable and/or the Commitment (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment.

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ARTICLE IX
THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT; THE LEAD
ARRANGERS, THE SYNDICATION AGENT AND THE DOCUMENTATION AGENT
     SECTION 9.1 Actions. Each Lender hereby appoints Citicorp USA as its
Administrative Agent and CitiNA, as its collateral agent, under and for purposes
of each Loan Document. Each Lender authorizes each Agent to act on behalf of
such Lender under each Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by such Agent
(with respect to which each Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel in order
to avoid contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of such Agent by the
terms hereof and thereof, together with such powers as may be incidental thereto
(including the release of Liens on assets Disposed of in accordance with the
terms of the Loan Documents). Each Lender hereby indemnifies (which indemnity
shall survive any termination of this Agreement) each Agent, pro rata according
to such Lender’s proportionate Total Exposure Amount, from and against any and
all liabilities, obligations, losses, damages, claims, costs or expenses of any
kind or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, such Agent in any way relating to or arising out of any Loan
Document (including reasonable attorneys’ fees and expenses), and as to which
such Agent is not reimbursed by the Borrower (and without limiting its
obligation to do so); provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted from such Agent’s gross negligence or willful
misconduct. No Agent shall be required to take any action under any Loan
Document, or to prosecute or defend any suit in respect of any Loan Document,
unless it is indemnified hereunder to its reasonable satisfaction. If any
indemnity in favor of any Agent shall be or become, in such Agent’s
determination, inadequate, such Agent may call for additional indemnification
from the Lenders and cease to do the acts indemnified against hereunder until
such additional indemnity is given.
     SECTION 9.2 Funding Reliance, etc. Unless the Administrative Agent shall
have been notified in writing by any Lender by 3:00 p.m. on the Business Day
prior to a Borrowing that such Lender will not make available the amount which
would constitute its Percentage of such Borrowing on the date specified
therefor, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to the
extent that such Lender shall not have made such amount available to the
Administrative Agent, such Lender and the Borrower severally agree to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to the Borrower to the date such amount is repaid to the
Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing (in the case of the Borrower) and (in the case of a
Lender), at the Federal Funds Rate (for the first two Business Days after which
such amount has not been repaid), and thereafter at the interest rate applicable
to Loans comprising such Borrowing.
     SECTION 9.3 Exculpation. Neither any Lead Arranger, any Agent nor any of
its directors, officers, employees, agents or Affiliates shall be liable to any
Secured Party for any

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action taken or omitted to be taken by it under any Loan Document, or in
connection therewith, except for its own willful misconduct or gross negligence,
nor responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of any Loan Document,
or the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, nor to make any inquiry respecting the performance by
any Obligor of its Obligations. Any such inquiry which may be made by a Lead
Arranger or an Agent shall not obligate it to make any further inquiry or to
take any action. Each Lead Arranger and each Agent shall be entitled to rely
upon advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which such Lead Arranger or such Agent
believes to be genuine and to have been presented by a proper Person.
     SECTION 9.4 Successor. Any Agent may resign as such at any time upon at
least 30 days’ prior notice to the Borrower and all Lenders. If any Agent at any
time shall resign, the Required Lenders may appoint (subject to, so long as no
Event of Default has occurred and is continuing, the reasonable consent of the
Borrower not to be unreasonably withheld or delayed) another Lender as such
Person’s successor Agent which shall thereupon become the applicable Agent
hereunder. If no successor Agent shall have been so appointed by the Required
Lenders (and consented to by the Borrower), and shall have accepted such
appointment, within 30 days after the retiring such Agent’s giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the United States (or any State thereof)
or a United States branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least $250,000,000; provided that,
if such retiring Agent is unable to find a commercial banking institution which
is willing to accept such appointment and which meets the qualifications set
forth in above, the retiring Agent’s resignation shall nevertheless thereupon
become effective and the Lenders shall assume and perform all of the duties of
such Agent hereunder until such time, if any, as the Required Lenders appoint a
successor as provided for above. Upon the acceptance of any appointment as an
Agent hereunder by any successor Agent, such successor Agent shall be entitled
to receive from the retiring Agent such documents of transfer and assignment as
such successor Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Agent’s resignation
hereunder as an Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was an Agent under
the Loan Documents, and Section 10.3 and Section 10.4 shall continue to inure to
its benefit.
     SECTION 9.5 Loans by Citibank. Citibank shall have the same rights and
powers with respect to (a) the Loans made by it or any of its Affiliates, and
(b) the Notes held by it or any of its Affiliates as any other Lender and may
exercise the same as if it were not an Agent. Citibank and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
Citibank were not an Agent hereunder.
     SECTION 9.6 Credit Decisions. Each Lender acknowledges that it has,
independently of the Administrative Agent and each other Lender, and based on
such Lender’s review of the financial information of the Borrower, the Company,
the Loan Documents (the terms and

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provisions of which being satisfactory to such Lender) and such other documents,
information and investigations as such Lender has deemed appropriate, made its
own credit decision to extend its Commitment. Each Lender also acknowledges that
it will, independently of the Administrative Agent and each other Lender, and
based on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under the Loan Documents.
     SECTION 9.7 Copies, etc. Each Agent shall give prompt notice to each Lender
of each notice or request required or permitted to be given to such Agent by the
Borrower or the Company pursuant to the terms of the Loan Documents (unless
concurrently delivered to the Lenders by the Borrower or the Company). Each
Agent will distribute to each Lender each document or instrument received for
its account and copies of all other communications received by such Agent from
the Borrower or the Company for distribution to the Lenders by such Agent in
accordance with the terms of the Loan Documents. No Agent shall, except as
expressly set forth in the Loan Documents, have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or the Company or any of its Affiliates that is communicated to or
obtained by any Agent or any of its Affiliates in any capacity.
     SECTION 9.8 Reliance by Agents. The Agents shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telecopy, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by such Agent. As to any matters not expressly provided for by
the Loan Documents, the Agents shall in all cases be fully protected in acting,
or in refraining from acting, thereunder in accordance with instructions given
by the Required Lenders or all of the Lenders as is required in such
circumstance, and such instructions of such Lenders and any action taken or
failure to act pursuant thereto shall be binding on all Secured Parties.
     SECTION 9.9 Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than a Default under
Section 8.1.1) unless the Administrative Agent has received a written notice
from a Lender or the Borrower or the Company specifying such Default and stating
that such notice is a “Notice of Default”. In the event that the Administrative
Agent receives such a notice of the occurrence of a Default, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall (subject to Section 10.1 and the Intercreditor Agreement) take such action
with respect to such Default as shall be directed by the Required Lenders;
provided that, subject to the terms, conditions and restrictions set forth in
the Intercreditor Agreement, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Secured
Parties except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders.
     SECTION 9.10 Lead Arrangers, Syndication Agents and Documentation Agents.
Notwithstanding anything else to the contrary contained in this Agreement or any
other Loan Document, the Lead Arrangers, the Syndication Agents and the
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respective capacities as such, each in such capacity, shall have no duties or
responsibilities under this Agreement or any other Loan Document nor any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against such Person in such capacity. Each Lead
Arranger shall at all times have the right to receive current copies of the
Register and any other information relating to the Lenders and the Loans that
they may request from the Administrative Agent. Each Lead Arranger shall at all
times have the right to receive a current copy of the Register and any other
information relating to the Lenders and the Loans that they may request from the
Administrative Agent.
     SECTION 9.11 Posting of Approved Electronic Communications.
     (a) The Company hereby agrees, unless directed otherwise by the
Administrative Agent or unless the electronic mail address referred to below has
not been provided by the Administrative Agent to the Company, that it will, or
will cause its Subsidiaries to, provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to the Loan Documents or to the Lenders under
Section 7.1.1, including all notices, requests, financial statements, financial
and other reports, certificates and other information materials, but excluding
any such communication that (i) is or relates to a Borrowing Request, a
Continuation/Conversion Notice or an Issuance Request, (ii) relates to the
payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor and (iii) provides notice of any Default (all such
non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft
medium that is properly identified in a format reasonably acceptable to the
Administrative Agent to an electronic mail address as directed by the
Administrative Agent; provided for the avoidance of doubt the items described in
clauses (i) and (iii) above may be delivered via facsimile transmissions. In
addition, the Company agrees, and agrees to cause its Subsidiaries, to continue
to provide the Communications to the Administrative Agent or the Lenders, as the
case may be, in the manner specified in the Loan Documents but only to the
extent requested by the Administrative Agent.
     (b) The Company further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar secure electronic transmission system (the
“Platform”).
     (c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE INDEMNIFIED
PARTIES DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS OR THE
ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR
OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS IS MADE BY THE INDEMNIFIED PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO

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EVENT SHALL ANY PARTY HERETO HAVE ANY LIABILITY TO ANY OBLIGOR, ANY LENDER OR
ANY OTHER PERSON FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT
LIABILITY AND INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT
OF ANY OBLIGOR’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS
THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF SUCH PERSON IS FOUND
IN A FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
PRIMARILY FROM SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
     (d) The Administrative Agent agrees that the receipt of the Communications
by the Administrative Agent at the e-mail address set forth on Schedule II shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Loan Documents. Each Lender agrees that receipt of notice to
it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform shall constitute effective delivery of the
Communications to such Lender for purposes of the Loan Documents. Each Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and that the foregoing
notice may be sent to such e-mail address.
     (e) Nothing herein shall prejudice the right of any Agent or any Lender to
give any notice or other communication pursuant to any Loan Document in any
other manner specified in such Loan Document.
ARTICLE X
MISCELLANEOUS PROVISIONS
     SECTION 10.1 Waivers, Amendments, etc. The provisions of each Loan Document
(other than the Fee Letter, which shall be modified only in accordance with
their respective terms) may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and consented to by the
Borrower and the Required Lenders; provided that, no such amendment,
modification or waiver shall:
     (a) modify Section 4.7, Section 4.8 (as it relates to sharing of payments)
or this Section, in each case, without the consent of all Lenders;
     (b) increase the aggregate amount of any Loans required to be made by a
Lender pursuant to its Commitments, extend the Commitment Termination Date of
Loans made (or participated in) by a Lender or extend the final Stated Maturity
Date for any Lender’s Loan, in each case without the consent of such Lender (it
being agreed, however, that any vote to rescind any acceleration made pursuant
to Section 8.2 and Section 8.3 of amounts owing with respect to the Loans and
other Obligations shall only require the vote of the Required Lenders);

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     (c) reduce (by way of forgiveness), the principal amount of or reduce the
rate of interest on any Lender’s Loan, reduce any prepayment premium or fees
described in Article III payable to any Lender or extend the date on which
interest or fees are payable in respect of such Lender’s Loans, in each case
without the consent of such Lender (provided that, the vote of Required Lenders
shall be sufficient to waive the payment, or reduce the increased portion, of
interest accruing under Section 3.2.2 and such waiver shall not constitute a
reduction of the rate of interest hereunder);
     (d) reduce the percentage set forth in the definition of “Required Lenders”
or modify any requirement hereunder that any particular action be taken by all
Lenders without the consent of all Lenders;
     (e) except as otherwise expressly provided in a Loan Document, release
(i) the Borrower or the Company from their respective Obligations under the Loan
Documents or any Subsidiary Guarantor from its obligations under the Guaranty or
(ii) all or substantially all of the collateral under the Loan Documents, in
each case without the consent of all Lenders; or
     (f) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent) or the
Collateral Agent (in its capacity as the Collateral Agent) unless consented to
by such Agent.
No failure or delay on the part of any Secured Party in exercising any power or
right under any Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on any Obligor in any case shall entitle it to any notice or demand
in similar or other circumstances. No waiver or approval by any Secured Party
under any Loan Document shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
Notwithstanding anything to the contrary contained in Section 10.1, if within
sixty days following the Closing Date, the Administrative Agent and the Company
shall have jointly identified an obvious error or any error or omission of a
technical or immaterial nature, in each case, in any provision of the Loan
Documents, then the Administrative Agent and the Company shall be permitted to
amend such provision and such amendment shall become effective without any
further action or consent of any other party to any Loan Document if the same is
not objected to in writing by the Required Lenders within five Business Days
following receipt of notice thereof.
     SECTION 10.2 Notices; Time. All notices and other communications provided
under each Loan Document shall be in writing or by facsimile (except to the
extent provided below in this Section 10.2 with respect to financial
information) and addressed, delivered or transmitted, if to the Borrower, the
Company, an Agent or a Lender, to the applicable Person at its address or
facsimile number set forth on the signature pages hereto, Schedule II hereto or
set forth in the Lender Assignment Agreement, or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or if
properly

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addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission thereof is received by the transmitter. Except
as set forth in Section 9.11 and below, electronic mail and Internet and
intranet websites may be used only to distribute routine communications by the
Administrative Agent to the Lenders, such as financial statements and other
information as provided in Section 7.1.1 and for the distribution and execution
of Loan Documents for execution by the parties thereto, and may not be used for
any other purpose. Notwithstanding the foregoing, the parties hereto agree that
delivery of an executed counterpart of a signature page to this Agreement and
each other Loan Document by facsimile (or other electronic) transmission shall
be effective as delivery of an original executed counterpart of this Agreement
or such other Loan Document. Unless otherwise indicated, all references to the
time of a day in a Loan Document shall refer to New York time.
     SECTION 10.3 Payment of Costs and Expenses. The Borrower agrees to pay
within 20 days of demand (to the extent invoiced together with reasonably
detailed supporting documentation) all reasonable out-of-pocket expenses of each
Lead Arranger and each Agent (including the reasonable fees and reasonable
out-of-pocket expenses of Mayer, Brown, Rowe & Maw LLP, counsel to the Lead
Arrangers and Agents and of local counsel, if any, who may be retained by or on
behalf of the Lead Arrangers and Agents) in connection with
     (a) the negotiation, preparation, execution and delivery of each Loan
Document, including schedules and exhibits, and any amendments, waivers,
consents, supplements or other modifications to any Loan Document as may from
time to time hereafter be required, whether or not the transactions contemplated
hereby are consummated; and
     (b) the filing or recording of any Loan Document (including any Filing
Statements) and all amendments, supplements, amendment and restatements and
other modifications to any thereof, searches made following the Closing Date in
jurisdictions where Filing Statements (or other documents evidencing Liens in
favor of the Secured Parties) have been recorded and any and all other documents
or instruments of further assurance required to be filed or recorded by the
terms of any Loan Document; and
     (c) the preparation and review of the form of any document or instrument
relevant to any Loan Document.
The Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of each Loan Document, the Loans or the issuance
of the Notes. The Borrower also agrees to reimburse the Agents and the Secured
Parties upon demand for all reasonable out-of-pocket expenses (including
reasonable attorneys’ fees and legal out-of-pocket expenses of counsel to the
Agents and the Secured Parties) incurred by the Agents and the Secured Parties
in connection with (A) the negotiation of any restructuring or “work-out” with
the Borrower, whether or not consummated, of any Obligations and (B) the
enforcement of any Obligations; provided that the Borrower shall not be required
to reimburse the legal fees and expenses of more than one outside counsel (in
addition to any local counsel) for all Persons indemnified under this
Section 10.3 unless, as reasonably determined by such Person seeking
indemnification hereunder or its

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counsel, representation of all such indemnified persons by the same counsel
would be inappropriate due to actual or potential differing interests between
them.
     SECTION 10.4 Indemnification. In consideration of the execution and
delivery of this Agreement by each Secured Party, the Borrower hereby
indemnifies, exonerates and holds each Secured Party, each Syndication Agent,
each Documentation Agent and each of their respective officers, directors,
employees, agents, trustees, fund advisors and Affiliates (collectively, the
“Indemnified Parties”) free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys’ fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the “Indemnified Liabilities”), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to
     (a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan, including all Indemnified
Liabilities arising in connection with the Transaction;
     (b) the entering into and performance of any Loan Document by any of the
Indemnified Parties (including any action brought by or on behalf of the
Borrower or the Company as the result of any determination by the Required
Lenders pursuant to Article V not to fund any Loan, provided that, any such
action is resolved in favor of such Indemnified Party);
     (c) any investigation, litigation or proceeding related to any acquisition
or proposed acquisition by any Obligor or any Subsidiary thereof of all or any
portion of the Capital Securities or assets of any Person, whether or not an
Indemnified Party is party thereto;
     (d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by any Obligor or any Subsidiary
thereof of any Hazardous Material;
     (e) the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission, discharging or releases from, any real property owned or
operated by any Obligor or any Subsidiary thereof of any Hazardous Material
(including any losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under any Environmental Law), regardless of whether caused
by, or within the control of, such Obligor or Subsidiary; or
     (f) each Lender’s Environmental Liability (the indemnification herein shall
survive repayment of the Obligations and any transfer of the property of any
Obligor or its Subsidiaries by foreclosure or by a deed in lieu of foreclosure
for any Lender’s Environmental Liability, regardless of whether caused by, or
within the control of, such Obligor or such Subsidiary);

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except for (i) Indemnified Liabilities arising for the account of any
Indemnified Party by reason of any Indemnified Party’s gross negligence, bad
faith or willful misconduct as finally determined by a court of competent
jurisdiction, (ii) Indemnified Liabilities arising out of any action, suit,
proceeding or claim against an Indemnified Party by any other Indemnified Party
not involving the Borrower or any of its Subsidiaries. The Borrower shall not be
required to reimburse the legal fees and expenses of more than one outside
counsel for all Indemnified Parties with respect to any matter for which
indemnification is sought unless, as reasonably determined by any such
Indemnified Party or its counsel, representation of all such Indemnified Parties
would create an actual conflict of interest. Each Obligor and its successors and
assigns hereby waive, release and agree not to make any claim or bring any cost
recovery action against, any Indemnified Party under CERCLA or any state
equivalent, or any similar law now existing or hereafter enacted. It is
expressly understood and agreed that to the extent that any Indemnified Party is
strictly liable under any Environmental Laws, each Obligor’s obligation to such
Indemnified Party under this indemnity shall likewise be without regard to fault
on the part of any Obligor with respect to the violation or condition which
results in liability of an Indemnified Party. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, each Obligor agrees
to make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
     SECTION 10.5 Survival. The obligations of the Company under Sections 4.3,
4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
Section 9.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 10.3 and 10.4) and the occurrence of the
Termination Date. The representations and warranties made by each Obligor in
each Loan Document shall survive the execution and delivery of such Loan
Document.
     SECTION 10.6 Severability. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
     SECTION 10.7 Headings. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions thereof.
     SECTION 10.8 Execution in Counterparts, Effectiveness, etc. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be an original and all of which shall constitute together but one and the
same agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Borrower, each Agent and each Lender (or notice
thereof satisfactory to the Administrative Agent), shall have been received by
the Administrative Agent.
     SECTION 10.9 Governing Law; Entire Agreement. EACH LOAN DOCUMENT WILL EACH
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE

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OF NEW YORK). The Loan Documents constitute the entire understanding among the
parties hereto with respect to the subject matter thereof and supersede any
prior agreements, written or oral, with respect thereto.
     SECTION 10.10 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided that, neither the Company nor the Borrower may
assign or transfer its rights or obligations hereunder without the consent of
all Lenders.
     SECTION 10.11 Sale and Transfer of Loans; Participations in Loans; Notes.
Each Lender may assign, or sell participations in, its Loans, Letters of Credit
and Commitments to one or more other Persons in accordance with the terms set
forth below.
     (a) Subject to clause (b), any Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under the Loan
Documents (including all or a portion of its Commitments and the Loans at the
time owing to it); provided that:
     (i) except in the case of (A) an assignment of the entire remaining amount
of the assigning Lender’s Commitments and the Loans at the time owing to it or
(B) an assignment to a Lender, an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitments (which for this
purpose includes Loans outstanding thereunder) or principal outstanding balance
of the Loans of the assigning Lender subject to each such assignment (determined
as of the date the Lender Assignment Agreement with respect to such assignment
is delivered to the Administrative Agent) shall not be less than $1,000,000,
unless the Administrative Agent and the Borrower, otherwise consent (which
consent shall not be unreasonably withheld or delayed);
     (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans and the Commitments assigned; and
     (iii) the parties to each assignment shall execute and deliver to the
Administrative Agent a Lender Assignment Agreement, together with, if the
Eligible Assignee is not already Lender, administrative details information with
respect to such Eligible Assignee and applicable tax forms.
     (b) Any assignment proposed pursuant to clause (a) to any Person (other
than a Lender, an Approved Fund or an Affiliate of any Lender) shall be subject
to the prior written approval of the Administrative Agent (not to be
unreasonably withheld or delayed).
     (c) Subject to acceptance and recording thereof by the Administrative Agent
pursuant to clause (d), from and after the effective date specified in each
Lender Assignment Agreement, (i) the Eligible Assignee thereunder shall (if not
already a Lender) be a party hereto and, to the extent of the interest assigned
by such Lender Assignment Agreement, have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assigning Lender thereunder shall
(subject to Section 10.5) be released from its obligations under the Loan
Documents, to the extent of the interest assigned by such Lender Assignment
Agreement (and, in the case of a

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Lender Assignment Agreement covering all of the assigning Lender’s rights and
obligations under the Loan Documents, such Lender shall cease to be a party
hereto, but shall (as to matters arising prior to the effectiveness of the
Lender Assignment Agreement) continue to be entitled to the benefits of any
provisions of the Loan Documents which by their terms survive the termination of
this Agreement). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with the terms of this Section shall
be treated for purposes of the Loan Documents as a sale by such Lender of a
participation in such rights and obligations in accordance with clause (e).
     (d) The Administrative Agent shall record each assignment made in
accordance with this Section in the Register pursuant to clause (a) of
Section 2.5. The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time upon reasonable prior notice to the
Administrative Agent.
     (e) Any Lender may, without the consent of, or notice to, any Person, sell
participations to one or more Persons (other than individuals) (a “Participant”)
in all or a portion of such Lender’s rights or obligations under the Loan
Documents (including all or a portion of its Commitments or the Loans owing to
it); provided that, (i) such Lender’s obligations under the Loan Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Company,
the Borrower, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under the Loan Documents. Any agreement or instrument
pursuant to which a Lender sells a participation shall provide that such Lender
shall retain the sole right to enforce the rights and remedies of a Lender under
the Loan Documents and to approve any amendment, modification or waiver of any
provision of the Loan Documents; provided that, such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, take
any action of the type described in clauses (a) through (d) or clause (f) of
Section 10.1 with respect to Obligations participated in by that Participant.
Subject to clause (f), the Company and the Borrower agree that each Participant
shall be entitled to the benefits of Sections 4.3, 4.4, 4.5, 4.6, 7.1.1, 10.3
and 10.4 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to clause (c). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 4.9 as though it
were a Lender, but only if such Participant agrees to be subject to Section 4.8
as though it were a Lender.
     (f) A Participant shall not be entitled to receive any greater payment
under Section 4.3, 4.4, 4.5, 4.6, 10.3 or 10.4 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. A Participant that would be a
Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of
Section 4.6 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with the requirements set forth in Section 4.6 as though it were a
Lender. Any Lender that sells a participating interest in any Loan, Commitment
or other interest to a Participant under this Section shall indemnify and hold
harmless the Borrower and the Administrative Agent from and against any taxes,
penalties, interest or other costs or losses (including reasonable attorneys’
fees and expenses) incurred or payable by the Borrower or the Administrative
Agent as a result of the

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failure of the Borrower or the Administrative Agent to comply with its
obligations to deduct or withhold any Taxes from any payments made pursuant to
this Agreement to such Lender or the Administrative Agent, as the case may be,
which Taxes would not have been incurred or payable if such Participant had been
a Non-U.S. Lender that was entitled to deliver to the Borrower, the
Administrative Agent or such Lender, and did in fact so deliver, a duly
completed and valid Form W-8BEN or W-8ECI (or applicable successor form)
entitling such Participant to receive payments under this Agreement without
deduction or withholding of any United States federal taxes.
     (g) Any Lender may, without the consent of any other Person, at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
     SECTION 10.12 Other Transactions. Nothing contained herein shall preclude
any Agent or any other Lender from engaging in any transaction, in addition to
those contemplated by the Loan Documents, with the Company, the Borrower or any
of its Affiliates in which the Borrower or such Affiliate is not restricted
hereby from engaging with any other Person.
     SECTION 10.13 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS, THE COMPANY OR THE BORROWER
IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED THAT, ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL AGENT’S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE COMPANY AND THE BORROWER IRREVOCABLY CONSENT TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION
10.2. EACH PERSON PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY PERSON PARTY HERETO HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH PERSON HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED

-87-

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BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.
     SECTION 10.14 Waiver of Jury Trial. EACH AGENT, EACH LENDER, THE COMPANY
AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE
FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH AGENT, SUCH
LENDER, THE COMPANY OR THE BORROWER IN CONNECTION THEREWITH. THE COMPANY, THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR EACH AGENT AND EACH LENDER ENTERING INTO THE LOAN DOCUMENTS.
     SECTION 10.15 Patriot Act. Each Lender that is subject to Section 326 of
the Patriot Act and/or the Agents and/or the Lead Arrangers (each of the
foregoing acting for themselves and not acting on behalf of any of the Lenders)
hereby notify the Borrower that pursuant to the requirements of the Patriot Act,
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender, the Agents or the Lead Arrangers,
as the case may be, to identify the Borrower in accordance with the Patriot Act.
     SECTION 10.16 Counsel Representation. EACH PARTY HERETO ACKNOWLEDGES AND
AGREES THAT IT HAS BEEN REPRESENTED BY COMPETENT COUNSEL IN THE NEGOTIATION OF
THIS AGREEMENT, AND THAT ANY RULE OR CONSTRUCTION OF LAW ENABLING SUCH PERSON TO
ASSERT THAT ANY AMBIGUITIES OR INCONSISTENCIES IN THE DRAFTING OR PREPARATION OF
THE TERMS OF THIS AGREEMENT SHOULD DIMINISH ANY RIGHTS OR REMEDIES OF ANY OTHER
PERSON ARE HEREBY WAIVED.
     SECTION 10.17 Confidentiality. Each Secured Party agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process (provided that except to the extent prohibited by such
subpoena or similar legal process, such Secured Party shall notify the Company
and the Borrower of such request or disclosure), (d) to any other party hereto,
(e) to the extent reasonably necessary, in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an

-88-

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agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the written consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section (or any other confidentiality obligation owed to the Company or any
Subsidiary or their Affiliates) or (ii) becomes available to any Secured Party
or any of their respective Affiliates on a nonconfidential basis from a source
other than the Company or any Subsidiary and not in violation of any
confidentiality obligation owed to the Company or any Subsidiary by any Secured
Party or any Affiliate thereof. For purposes of this Section, “Information”
means all information received from the Company or any Subsidiary relating to
the Company or any Subsidiary or any of their respective businesses, other than
any such information that is available to any Secured Party on a nonconfidential
basis prior to disclosure by the Company or any Subsidiary. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information and
in accordance with applicable law.
     SECTION 10.18 Intercreditor Agreement. (a) Each Lender hereby irrevocably
appoints, designates and authorizes the Administrative Agent and the Collateral
Agent to enter into the Intercreditor Agreement on its behalf and to take such
action on its behalf under the provisions thereof. Each Lender further agrees to
be bound by the terms and conditions of the Intercreditor Agreement and agrees
that it shall not take any action that is prohibited by or inconsistent with the
terms of the Intercreditor Agreement. Each Lender hereby agrees that the terms,
conditions and provisions contained in this Agreement are subject to the
Intercreditor Agreement. The Liens and security interests securing the
Indebtedness and other obligations incurred or arising under or evidenced by
this instrument and the rights and obligations evidenced hereby with respect to
such liens are subordinate, in the manner and to the extent set forth in
Intercreditor Agreement, to the Liens and security interests securing the First
Lien Obligations and to the Liens and security interests securing Indebtedness
refinancing the First Lien Obligations as permitted by the Intercreditor
Agreement; and each holder of the Obligations, by its acceptance hereof,
irrevocably agrees to be bound by the terms, conditions and provisions of the
Intercreditor Agreement.
     (b) The delivery of any Collateral (as defined in any Loan Document) or any
certificates, titles, Instruments, Chattel Paper or Documents evidencing or in
connection with such Collateral to the First Lien Collateral Agent under and in
accordance with the First Lien Loan Documents, the granting of “control” over
Collateral, the execution and delivery of control agreements and/or the
assignment of any Collateral (as defined in any Loan Document) to the First Lien
Collateral Agent under and in accordance with the First Lien Loan Documents
shall constitute compliance by the Obligors with the provisions of this
Agreement or any other Loan Document which require delivery, possession, control
and/or assignment of certain types of Collateral (as defined in any Loan
Document) by the Collateral Agent or delivery of control agreements to the
Collateral Agent so long as such First Lien Loan Documents are in full force and
effect, the First Lien Termination Date has not occurred, and the Obligors are
in compliance with the applicable provisions thereof with respect to such
Collateral. From and after the First

-89-

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Lien Termination Date, where this Agreement refers to any provision of the First
Lien Credit Agreement or any action or delivery required by such provision, such
reference shall be deemed to be a reference to such provision as in effect
immediately prior to the First Lien Termination Date except that such action or
delivery shall be made to or for the benefit of the Collateral Agent rather than
the Collateral Agent and the First Lien Collateral Agent collectively.
Capitalized terms used in this clause (b) not otherwise defined in this
Agreement shall have the meanings provided in the UCC.

-90-

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                  HBI BRANDED APPAREL LIMITED, INC.
     as the Borrower    
 
           
 
  By:        /s/ Richard Moss    
 
           
 
      Name: Richard Moss    
 
      Title: Treasurer    
 
                Address: 1000 East Hanes Mill Road    
 
             Winston Salem, NC 27105         Facsimile No.: (336) 519-5212    
 
                Attention: Treasurer    
 
                HANESBRANDS INC.    
 
           
 
  By:        /s/ Richard Moss    
 
           
 
      Name: Richard Moss
Title: Treasurer    
 
                Address:    
 
                Facsimile No.: (336) 519-5212    
 
                Attention: Treasurer    

-91-

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                  CITICORP USA, INC.,
     Individually and as the Administrative Agent    
 
           
 
  By:        /s/ John Coons    
 
           
 
      Name: John Coons
Title:    
 
                Address: 233 S. Wacker Drive    
 
             86th Floor    
 
             Chicago, IL 60606    
 
                Facsimile No.: (312) 281-9078    
 
                Attention:    
 
                CITIBANK, N.A.,
      as Collateral Agent    
 
           
 
  By:        /s/ Patricia Gallagher    
 
           
 
      Name: Patricia Gallagher
Title: Vice President    
 
                Address: 388 Greenwich St. 14th Floor    
 
      New York, NY 10013    
 
                Facsimile No.: (212) 816-5530    
 
                Attention: Patricia Gallagher    
 
                MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
      as Co-Syndication Agent and Joint Lead Arranger    
 
           
 
  By:        /s/ Nancy Meadows    
 
           
 
      Name: Nancy Meadows    
 
      Title: Vice President    

-92-

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                  MERRILL LYNCH CAPITAL CORPORATION,
      as a Lender    
 
           
 
  By:        /s/ Nancy Meadows    
 
           
 
      Name: Nancy Meadows    
 
      Title: Vice President    
 
                MORGAN STANLEY SENIOR FUNDING, INC.,
     Individually and as Co-Syndication Agent and
           Joint Lead Arranger    
 
           
 
  By:        /s/ Jaap L. Tonckens    
 
           
 
      Name: Jaap L. Tonckens    
 
      Title: Vice President    
 
                HSBC BANK USA, NATIONAL ASSOCIATION,
     as Co-Documentation Agent    
 
           
 
  By:            
 
           
 
      Name:    
 
      Title:    
 
                LASALLE BANK NATIONAL ASSOCIATION,
      as Co-Documentation Agent    
 
           
 
  By:        
 
           
 
      Name:    
 
      Title:    
 
                BARCLAYS BANK PLC,
     as Co-Documentation Agent    
 
           
 
  By:        
 
           
 
      Name:    
 
      Title:    

-93-

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DISCLOSURE SCHEDULES
TO
SECOND LIEN CREDIT AGREEMENT
dated as of September 5, 2006,
among
HBI BRANDED APPAREL LIMITED, INC.,
as the Borrower,
HANESBRANDS INC.,
as the Company,
VARIOUS FINANCIAL INSTITUTIONS AND
OTHER PERSONS FROM TIME TO TIME
PARTY HERETO,
as the Lenders,
HSBC BANK USA, NATIONAL ASSOCIATION,
LASALLE BANK NATIONAL ASSOCIATION, and
BARCLAYS BANK PLC,
as the Co-Documentation Agents,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as the Co-Syndication Agents,
CITICORP USA, INC.,
as the Administrative Agent,
and
CITIBANK, N.A., as the Collateral Agent.
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
MORGAN STANLEY SENIOR FUNDING, INC.,
as the Joint Lead Arrangers and Joint Bookrunners

--------------------------------------------------------------------------------

 

     
SCHEDULE I
   
 
   
ITEM 1.1.
  Foreign Supply Chain Entities
ITEM 1.2.
  Excluded Contracts
ITEM 6.8.
  Existing Subsidiaries
ITEM 6.9.
  Mortgaged Property
ITEM 7.2.2(c)
  Ongoing Indebtedness
ITEM 7.2.3(c)
  Ongoing Liens
ITEM 7.2.5(a)
  Ongoing Investments
ITEM 7.2.11(m)
  Permitted Dispositions
 
   
SCHEDULE II
  Percentages, Libor Office, Domestic Office
 
   

 

--------------------------------------------------------------------------------

 

ITEM 1.1. Foreign Supply Chain Entities
None.

 

--------------------------------------------------------------------------------

 

ITEM 1.2. Excluded Contracts

          Vendor   Nature of Agreement
1.
  [*****]   Trademark License Agmt. [*****]
2.
  [*****]   Trademark License Agmt. [*****]
3.
  [*****]   Trademark License Agmt. [*****]
4.
  [*****]   Trademark License Agmt. [*****]
5.
  [*****]   Trademark License Agmt. [*****]
6.
  [*****]   Trademark License Agmt. [*****]
7.
  [*****]   Trademark License Agmt. [*****]
8.
  [*****]   License Agmt.
9.
  [*****]   Trademark License Agmt. [*****]
10.
  [*****]   License Agmt. [*****]
11.
  [*****]   Trademark License Agreement [*****]
12.
  [*****]    
13.
  [*****]   IT Agreement – software license and maintenance
14.
  [*****]   IT Agreement – software license and maintenance
15.
  [*****]   IT Agreement – supply chain software license and maintenance
16.
  [*****]   Compensation/Benefits Agreement
17.
  [*****]   Real Property Lease [*****]
18.
  [*****]   Supplier Services [*****]
19.
  [*****]   Supplier Goods-materials
20.
  [*****]   Real Property Lease [*****]
21.
  [*****]   Real Property Lease [*****]
22.
  [*****]   Real Property Lease [*****]
23.
  [*****]   Real Property Lease [*****]
24.
  [*****]   Real Property Lease [*****]
25.
  [*****]   Real Property Lease [*****]
26.
  [*****]   Real Property Lease [*****]
27.
  [*****]   Real Property Lease
28.
  [*****]   Real Property Lease
29.
  [*****]   Real Property Lease [*****]

 

--------------------------------------------------------------------------------

 

ITEM 6.8. Existing Subsidiaries

  Domestic Subsidiaries
BA International, L.L.C.
Caribesock, Inc.
Caribetex, Inc.
CASA International, LLC
Ceibena Del, Inc.
Hanes Menswear, LLC
Hanes Puerto Rico, Inc.
Hanesbrands Direct, LLC
Hanesbrands Distribution, Inc.
HbI International, LLC
HBI Branded Apparel Enterprises, LLC
HBI Branded Apparel Limited, Inc.
HBI Sourcing, LLC
Inner Self LLC
Jasper-Costa Rica, L.L.C.
National Textiles, L.L.C.
NT Investment Company, Inc.
Playtex Dorado, LLC
Playtex Industries, Inc.
Seamless Textiles, LLC
UPCR, Inc.
UPEL, Inc.

  Foreign Subsidiaries
Allende Internacional S. de R.L. de C.V.
Bali Domincana, Inc.
Bali Dominicana Textiles, S.A.
Bal-Mex S. de R.L de C.V.
Canadelle Holdings Corporation Ltd.
Canadelle LP
Cartex Manufacturera S. A.
Caysock, Inc.
Caytex, Inc.
Caywear, Inc.
Ceiba Industrial, S. de R.L.
Champion Products S. de R.L. de C.V.
Choloma, Inc.
Confecciones Atlantida S. de R.L.
Confecciones de Nueva Rosita S. de R.L. de C.V.
Confecciones El Pedregal Inc.
Confecciones El Pedregal S.A. de C.V.
Confecciones Jiboa S.A. de C.V.
Confecciones La Caleta, Inc.
Confecciones La Herradura S.A. de C.V.
Confecciones La Libertad, S.A. de C.V.
DFK International Ltd.
Dos Rios Enterprises, Inc.
Hanes Caribe, Inc.
Hanes Choloma, S. de R. L.
Hanes Colombia, S.A.

 

--------------------------------------------------------------------------------

 

  Foreign Subsidiaries
Hanes de Centro America S.A.
Hanes de El Salvador, S.A. de C.V.
Hanes de Honduras S. de R.L. de C.V.
Hanes Dominican, Inc.
Hanes Panama Ltd.
Hanes Brands Incorporated de Costa Rica, S.A.
Hanesbrands Argentina S.A.
Hanesbrands Brasil Textil Ltda.
Hanesbrands Dominicana, Inc.
Hanesbrands (HK) Limited
HBI Alpha Holdings, Inc.
HBI Beta Holdings, Inc.
HBI Compania de Servicios, S.A. de C.V.
HBI Servicios Administrativos de Costa Rica, S.A.
HBI Socks de Honduras, S. de R.L. de C.V.
Indumentaria Andina S.A.
Industria Textileras del Este, S. de R.L.
Industrias Internacionales de San Pedro S. de R.L. de C.V.
J.E. Morgan de Honduras, S.A.
Jasper Honduras, S.A.
Jogbra Honduras, S.A.
Madero Internacional S. de R.L. de C.V.
Manufacturera Ceibena S. de R.L.
Manufacturera Comalapa S.A. de C.V.
Manufacturera de Cartago, S.R.L.
Manufacturera San Pedro Sula, S. de R.L.
Monclova Internacional S. de R.L. de C.V.
PT SL Sourcing Indonesia (to be named PT HBI Sourcing Indonesia)
PTX (D.R.), Inc.
Rinplay S. de R.L. de C.V.
Santiago Internacional Textil Limitada (in liquidation)
Sara Lee of Canada NSULC (to be renamed Hanesbrands Canada NSULC)
Sara Lee Intimates, S. de R.L. (to be renamed Confecciones del Valle, S. de R.L.
de C.V.)
Sara Lee Japan Ltd. (to be renamed Hanesbrands Japan Inc.)
Sara Lee Knit Products Mexico S.A. de C.V. (to be renamed Inmobilaria Rinplay S.
de R.L. de C.V.)
Sara Lee Moda Femenina, S.A. de C.V. (to be renamed Servicios Rinplay, S. de R.L
de C.V.)
Sara Lee Printables GmbH (to be renamed HBI Europe GmbH)
Servicios de Soporte Intimate Apparel, S de RL
Socks Dominicana S.A.
Texlee El Salvador, S.A. de C.V.
The Harwood Honduras Companies, S. de R.L.
TOS Dominicana, Inc.
HBI Sourcing Asia Limited*
Sara Lee Apparel International (Shanghai) Co. Ltd. (to be renamed Hanesbrands
International (Shanghai) Co. Ltd.)*
Sara Lee Apparel India Private Limited (to be renamed Hanesbrands India Private
Limited)*
SL Sourcing India Private Ltd. (to be renamed HBI Sourcing India Private Ltd.)*
Hanesbrands (Thailand) Ltd.*
Hanesbrands Philippines Inc.*

 
* These companies are Foreign Subsidiaries subject to the completion of the post
closing obligations set forth in Section 7.1.11 of the Credit Agreement.

 

--------------------------------------------------------------------------------

 

ITEM 6.9. Mortgaged Property

                  Estimated Facility Name   Address   Value
Clarksville
  Cline & Clark Rd
Clarksville, AR   $2.4 million
 
       
Weeks
  401 Hanes Mill Rd
W-S, NC   $15.1 million
 
       
Stratford Rd.
  700 South Stratford Road
W-S, NC   $5.7 million
 
       
Commerce (Cleveland)
  219 Commerce Blvd
Kings Mountain, NC   $11.0 million
 
       
Eden
  Gant Road
Eden, North Carolina   $3.0 million
 
       
Oak Summit
  1000 Hanes Mill Road
W-S, NC   $70.2 million
 
       
Canterbury
  705 Canterbury Rd
Gastonia, NC   $2.1 million
 
       
Annapolis
  2655 Annapolis
W-S, NC   $7.9 million
 
       
Kernersville
  700 North Main Street
Kernersville, NC   $3.9 million
 
       
Laurel Hill
  18400 Fieldcrest Road
Laurel Hill, NC   $4.6 million
 
       
Sanford
  2652 Dalrymple Street
Sanford, NC   $2.4 million
 
       
Advance
  2016 Cornatzer Road
Advance NC   $2.1 million
 
       
Crawford
  328 Crawford Rd
Statesville, NC   $2.6 million
 
       
480 Office
  480, W. Hanes Mill Road Winston-Salem, NC   $3.3 million
 
       
Tamaqua Hometown DC
  143 Mahonoy Ave
Tamaqua, PA   $3.8 million
 
       
Martinsville VSC
  380 Beaver Creek Road
Martinsville, VA   $3.7 million
 
       
Northridge
  521 Northridge Park Dr.
Rural Hall, NC   $14.8 million

 

--------------------------------------------------------------------------------

 

ITEM 7.2.2(c) Ongoing Indebtedness
HANESBRANDS INC. — CAPITAL LEASE LISTING

                                              FY06     Lease #       Interest  
Principal   Total
BALI95
  Xerox     182.68       5,985.32       6,168.00  
BALI138
  Pitney Bowes     175.11       2,176.89       2,352.00  
BALI139
  Pitney Bowes     175.32       2,176.67       2,351.99  
BALI140
  Pitney Bowes                     4,680.00  
BALI147
  Carolina Tractor     2,599.99       4,263.05       6,863.04  
BALI148
  Carolina Tractor     2,625.05       4,305.67       6,930.72  
BALI150
  Carolina Tractor     2,294.59       4,169.45       6,464.04  
BALI151
  Carolina Tractor     125.38       3,894.62       4,020.00  
BALI152
  Konica     4.71       515.29       520.00  
BALI153
  Bassett Office Supply     648.80       4,262.33       4,911.13  
BALI157
  Konica     11.37       1,296.63       1,308.00  
BALI160
  De Lage Landem Financial Services     625.71       3,907.65       4,533.36  
PLAY115
  Citi Capital     1,922.30       9,177.70       11,100.00  
US97
  Citi Capital     478.71       8,993.65       9,472.36  
727
  Pitney Bowes     11.98       180.52       192.50  
729
  Xerox     419.87       6,856.19       7,276.06  
738
  Gill Security Systems     0.00       0.00       3,000.00  
739
  Gill Security Systems     0.00       0.00       2,160.00  
2 trailers
  Salem Leasing     171.50       3,428.50       3,600.00  
OB40
  Outerbanks land and building     30,244.38       183,702.54       213,946.92  
13639 tr
  Salem Leasing     17,235.75       344,564.25       361,800.00  
4400 tr
  Salem Leasing     11,703.39       3,686.61       15,390.00  
4750 tr
  Salem Leasing     2,950.22       1,389.78       4,340.00  
7399 tr
  Salem Leasing     1,939.46       2,380.54       4,320.00  
9904 tr
  Salem Leasing     9,658.89       29,221.11       38,880.00  
11887 tr
  Salem Leasing     886.36       7,753.64       8,640.00  
6
  Simplex Grinnell     174.31       4,853.69       5,028.00  
7
  Telimagine, Inc.     2,552.32       17,355.68       19,908.00  
7420 tr
  Salem Leasing     29,330.28       121,869.72       151,200.00  
15201 tr
  Salem Leasing     202.78       7,097.22       7,300.00  
82638 tr
  Salem Leasing     5,882.15       13,041.85       18,924.00  
13639 tr
  Salem Leasing     14,320.25       286,279.75       300,600.00  
13639 tr
  Salem Leasing     1,886.50       37,713.50       39,600.00  
3121
  Highwoods Realty Ltd Partnership     77,175.96       319,286.05      
396,462.00  

 

--------------------------------------------------------------------------------

 

HANESBRANDS INC. — CAPITAL LEASE LISTING

                                              FY06     Lease #       Interest  
Principal   Total
3129
  Zona Franca De Exportacion el Pedregal     13,442.26       200,973.74      
214,416.00  
13639 tr
  Salem Leasing     16,635.50       332,564.50       349,200.00  
86728 tr
  Salem Leasing     5,749.89       16,762.11       22,512.00  
1
  Xerox     267.00       681.00       948.00  
2
  Xerox     351.79       596.21       948.00  
3
  Xerox     142.82       1,045.18       1,188.00  
4
  Xerox     226.26       3,061.74       3,288.00  
5
  Xerox     2,316.96       29,651.04       31,968.00  
6
  Xerox     93.04       1,682.96       1,776.00  
7
  Xerox     937.40       17,062.60       18,000.00  
8
  Xerox     1,059.04       5,324.96       6,384.00  
9
  Xerox     180.87       2,447.13       2,628.00  
10
  Xerox     2,824.29       38,215.71       41,040.00  
11
  Xerox     215.38       4,123.34       4,338.72  
12
  Xerox     1,498.80       28,693.80       30,192.60  
13
  Xerox     692.60       13,259.32       13,951.92  
14
  Xerox     1,356.00       19,158.00       20,514.00  
15
  Xerox     3,390.00       64,990.00       68,380.00  
16
  Xerox     1,244.16       19,270.08       20,514.24  
17
  Xerox     335.50       6,422.66       6,758.16  
18
  Xerox     4,478.32       6,237.68       10,716.00  
19
  Xerox     3,256.65       8,035.35       11,292.00  
20
  Xerox     580.00       8,576.00       9,156.00  
21
  Xerox     530.00       8,626.00       9,156.00  
22
  Xerox     920.56       8,815.72       9,736.28  
23
  Xerox     1,261.96       24,159.08       25,421.04  
IBM
  IBM     156,321.59       369,278.41       525,600.00  
PHH Leases
  PHH — automobiles from SLC     104,574.00       1,207,923.00      
1,312,497.00  
TOTAL
                        4,446,762.08  

 

--------------------------------------------------------------------------------

 

ITEM 7.2.3(c) Ongoing Liens
1. Lien on the shares of SN Fibers (an Israeli company owned by HBI
International, LLC) pursuant to the SN Fibers Memorandum of Articles.
2. Mortgages as listed below1

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender      
          Douglas B. Mills,
4185 W. 5th Street Lumberton
North Carolina

                   Robeson
                     County
  Robeson County Committee of 100, Inc., a NC non-profit corporation   Sara Lee
Corporation, a
Maryland
corporation
(formerly SL Outer
Banks, LLC)   North Carolina Deed of Trust recorded in Book 623, Page 37 dated
3/26/87 executed by Robeson County Committee of 100, Inc.

Loan Amount — $115,170.00   Nicky D. Carter, (Successor Trustee) and John C.
Hasty, Trustees of the Cape Fear Construction Company, Inc.
 
               
933 Meacham Road
Statesville
North Carolina

                   Iredell
                 County
  Flexnit Company, Inc., a Delaware Corporation   Bali Company, a
Delaware
corporation

(Dissolved)   Deed of Trust dated 12/27/1974 recorded in Book 447, Page 200
(missing pages 3-7).
and
Deed of Trust and Security Agreement dated 12/26/ 1979 recorded in Book 509,
Page 436 (missing pages 438 and 440-451)

Loan Amount — originally secured $1,7000,000 and then modified to secure up to
$4,000,000   Irving Trust
Company, a New York
Corporation
 
               
645 West Pine Street
Mount Airy
North Carolina

                   Surry
                 County
  The Surry County Industrial Facilities and Pollution Control Financing
Authority   The Surry County Industrial Facilities and Pollution Control
Financing Authority   Deed of Trust dated 4/1/1979 and recorded in Book 348,
Page 606

Loan Amount secured — $4,000,000   Prudential
Reinsurance
Company, a Delaware
corporation

 

1   Please note that for all mortgages listed, there is no outstanding
indebtedness in connection with the mortgage, however a mortgage release has not
been recorded. These releases are a post-closing item.

 

--------------------------------------------------------------------------------

 

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender
143 Mahanoy Avenue
Tamaqua
Pennsylvania

                   Schuylkill
                       County
  Schuylkill County
Industrial
Development
Authority   Greater Tamaqua Industrial Development Enterprises (originally
leased to J.E. Morgan Knitting Mills, Inc.)   Supplemental Mortgage recorded in
Mortgage Book 34-P, Page 782, dated
10/24/1984

Loan Amount secured originally $650,000   American Bank and Trust Co. of PA.
 
               
480 Hanes Mill Road Winston-Salem, NC 27105 (336) 714-8400

Forsyth County
  National Textiles,
LLC   National Textiles, L.L.C., a Delaware limited liability company   1. Deed
of Trust, Security Agreement, Financing Statement and Assignment of Rents and
Leases from National Textiles, L.L.C., a Delaware limited liability company, to
The Fidelity Company, Trustee for The First National Bank of Chicago, dated as
of December 22, 1997 and recorded December 23, 1997 in Book 1978, Page 3969,
Forsyth County Registry, securing an original amount of 210,000,000.00. (Also
covers additional property)

2. Deed of Trust Modification and Reaffirmation Agreement by and between
National Textiles, L.L.C., a Delaware limited liability company, and Bank One,
NA f/k/a The First National Bank of Chicago, dated as of December 22, 2000 and
recorded January 16, 2001 in Book 2150, Page 2439, Forsyth County Registry,
regarding the Deed of Trust recorded in Book 1978, Page 3969, Forsyth County
Registry.
Loan Amount $210,000,000 but linked to $300,000,000

Loan matures 6/22/2007   Bank One, NA f/k/a The First National Bank of Chicago

 

--------------------------------------------------------------------------------

 

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender
308 East Thom Street
China Grove, NC 2802

Rowan County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of trust, security
Agreement, Financing Statement and Assignment of Rents and Leases recorded in
Book 879, Page 692, dated 4/28/2000 as modified by that Deed of Trust
Modification and reaffirmation recorded in Book 898, Page 124, dated 12/22/2000

Loan Amount secured— up tp $300,000,000   Bank One, NA f/k/a The First National
Bank of Chicago

 

--------------------------------------------------------------------------------

 

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender
6295 Clementine Dr. #4 Clemmons, NC 27012

                   Forsyth
                   County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   1. Deed of Trust,
Security Agreement, Financing Statement and Assignment of Rents and Leases from
National Textiles, L.L.C., a Delaware limited liability company, to The Fidelity
Company, Trustee for The First National Bank of Chicago, dated as of
December 22, 1997 and recorded December 23, 1997 in Book 1978, Page 3969,
Forsyth County Registry, securing an original amount of 210,000,000.00. (Also
covers additional property)

2. Deed of Trust Modification and Reaffirmation Agreement by and between
National Textiles, L.L.C., a Delaware limited liability company, and Bank One,
NA f/k/a The First National Bank of Chicago, dated as of December 22, 2000 and
recorded January 16, 2001 in Book 2150, Page 2439, Forsyth County Registry,
regarding the Deed of Trust recorded in Book 1978, Page 3969, Forsyth County
Registry.

Loan Amount $210,000,000 but linked to $300,000,000

Loan matures 6/22/2007   Bank One, NA f/k/a The First National Bank of Chicago
 
               
136 Gant Road Eden,
NC 27288-7935
(336) 635-1354

                 Rockingham
                    County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust, Security
Agreement, Financing Statement and Assignment of Rents and Leases recorded in
Book 972, Page 2267, dated 12/22/1997

Loan amount secured — up to $300,000,000   Bank One, NA f/k/a The First National
Bank of Chicago
 
               
328 Gant Road
Eden, NC 27288-7935

  Eden Yarns, Inc., a Delaware   Sara Lee
Corporation, a   Deed of Trust recorded in Book 804, Page 1004, dated 11/30/1987
as modified by that;   1. Wachovia Bank

 

--------------------------------------------------------------------------------

 

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender
                 Rockingham
                     County
  corporation   Maryland
corporation   First Amendment to Deed of Trust, Assignment of rents and security
Agreement recorded in Book 842, Page 44, dated 12/31/1987 as modified by that;

Amendment to Deed of Trust recorded in Book 836, Page 1533, dated 5/15/1990 as
modified by that;

Third Amendment to deed of Trust recorded in Book 842, Page 66, dated 10/24/1990
as modified by that;

Fourth Amendment to Deed of Trust recorded in Book 871, Page 2321, dated
9/17/1992 as modified by that;

Fifth Amendment to Deed of Trust recorded in Book 906, Page 1959, dated
7/27/1994 as modified by that;

Sixth Amendment to Deed of Trust recorded in Book 941, Page 1268, dated
7/23/1996 as modified by that;

Seventh Amendment to Deed of Trust recorded in Book 989, Page 1624, dated
7/29/1998

Loan amount secured — $66,000,000 ($33,000,000 to Wachovia Bank and$33,000,000
to Suntrust Bank)

matures 11/30/2009   of North Carolina

2. Suntrust Bank
 
               
1311 West Main Street
Forest City, NC 28043

                  Rutherford
                   County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust, Security
Agreement, Financing Statement and Assignment of Rents and Leases recorded in
Book 524, Page 383 as modified by that;

Deed of Trust Modification and Reaffirmation Agreement recorded in Book 768,
Page 334, dated 12/22/2000   Bank One, NA f/k/a The First National Bank of
Chicago
 
               

 

--------------------------------------------------------------------------------

 

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender
 
          Loan amount secured $210,000,000.00, but linked to $300,000,000 in
future advance section

   
 
               
1012 Glendale Drive
Galax, VA 24333

                    Carroll County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust Security
Agreement, Financing Statement and Assignment of Rents and Leases, dated
December 22, 1997, recorded on December 23, 1997 in Book 523, Page 283, Clerk’s
Office of Carroll County, Virginia;

This is a credit line deed of trust in the amount of $2,250,000.00, but linked
to secure the $210,000,000 in the recitals   Bank One, NA f/k/a The First
National Bank of Chicago
 
               
501 Brown Street
(P.O. Box 12500)
Gastonia, NC 28053

                 Gaston County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust Security
Agreement, Financing Statement and Assignment of Rents and Leases, recorded in
Book 3091, Page 284, dated 5/30/2000

Loan Amount $210,000,000 but linked to $300,000,000   Bank One, NA f/k/a The
First National Bank of Chicago
 
               
1925 West Poplar Street
Gastonia, NC 28052

                   Gaston County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust, Security
Agreement, Financing Statement, and Assignment of Rents and Leases recorded in
Book 3079, Page 737, dated 4/28/2000

Loan Amount $210,000,000 but linked to $300,000,000   Bank One, NA f/k/a The
First National Bank of Chicago
 
               
100 Reep Drive
Morganton, NC 28655

                  Burke
                  County
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust, Security
Agreement, Financing Statement, and Assignment of Rents and Leases recorded in
Book 892, Page 1011, dated 12/22/1997 as modified by that;

Deed of Trust Modification and Reaffirmation Agreement Book 979, Page 557, dated
12/22/2000

Matures 6/22/2007

  Bank One, NA f/k/a The First National Bank of Chicago

 

--------------------------------------------------------------------------------

 

                              Deed of Trust Information     Address   Original
Borrower   Current Owner   (Date, Amount, Book and Page)   Name of Lender
 
          Loan Amount — $210,000,000.00 but secures up to $300,000,000 in future
advances section    
 
               
3916 Highway 421 South Mountain City, TN 37683 (423) 727-5270

                Johnson Co
  National Textiles,
LLC   The Industrial Development Board of the County of Johnson County,
Tennessee, a Tennessee public, not-for-profit corporation   Leasehold Deed of
Trust, Security Agreement, Financing Statement and Assignment of Rents and
Leases dated 12/22/1997
TD Book 135, Page 578 as modified byLeasehold Deed of trust Modification and
Reaffirmation Agreement dated 12/22/2000
TD Book 157, Page 288

First National Bank of Chicago

Loan Amount — $15,418,929.00 but linked to $300,000,000 in the recitals   Bank
One, NA f/k/a The First National Bank of Chicago
 
               
815 John Beck Dockins
Road

                 Rabun County
  National Textiles,
LLC   Development Authority of Rabun County, Georgia, a public body corporate
and politic of the State of Georgia   Deed to Secure debt, Security Agreement,
and Assignment of Rents and Leases from National Textiles, LLC (as grantor) and
Development Authority of Rabun County, Georgia (solely for purpose of
consenting), recorded in Book O-17/1, dated 12/22/1997, as modified by that
Deed to Secure Debt Modification and Reaffirmation Agreement
Agreement recorded in Book K-20/306, dated 12/22/2000

Loan Amount — $8,500,000.00

matures 6/22/2007   Bank One, NA f/k/a The First National Bank of Chicago
 
               
2652 Dalrymple Street Sanford, NC 27330

                   Lee Co.
  National Textiles, L.L.C., a Delaware limited liability company   National
Textiles, L.L.C., a Delaware limited liability company   Deed of Trust, Security
Agreement, Financing Statement, and Assignment of Rents and Leases recorded in
Book 625, Page 330, dated 12/22/1997

Loan Amount — $210,000,000.00 but secures up to $300,000,000 in future advances
section   Bank One, NA f/k/a The First National Bank of Chicago

 

--------------------------------------------------------------------------------

 

Equipment Leases as listed below

                          Debtor   Jurisdiction   Filing Type   Through Date  
Secured Party   File Number and Date   Collateral Description National Textiles,
L.L.C.
480 E. Hanes Mill Road
Winston-Salem, NC 27105   Secretary of
State,
Delaware   UCC   8/4/2006   LaSalle National Leasing
Corporation
One West Pennsylvania Avenue
Towson, MD 21204   2031537-8
1/14/2002   Leased equipment
pursuant to Master
Lease Agreement dated 6/13/2001.
 
                       
National Textiles, L.L.C.
480 E. Hanes Mill Road Winston-Salem, NC 27105
  Secretary of State,
Delaware   UCC   8/4/2006   LaSalle National Leasing
Corporation
One West Pennsylvania Avenue   3055776-2
3/7/2003   Leased manufacturing
equipment.
Additional Debtors:
            Towson, Md 21204    
National Textiles Services I, L.L.C. 480 E. Hanes Mill Road Winston-Salem, NC
27105
                     
National Textiles Services II, L.L.C. 480 E. Hanes Mill Road Winston-Salem, NC
27105
                     
National Textiles
                     
Services III, L.L.C.
                     
480 E. Hanes Mill Road
               
Winston-Salem, NC 27105
           

 

--------------------------------------------------------------------------------

 

ITEM 7.2.5(a) Ongoing Investments
1. Subsidiaries as listed in ITEM 6.8 above along with the below listed
companies.

•   SN Fibers (49% interest)   •   Playtex Marketing Corporation (50% interest)*

 
* This company is an investment subject to the completion of the post closing
obligations set forth in Section 7.1.11 of the Credit Agreement.
2. Deposit and Securities accounts

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Parent
  Bank of America   Hanesbrands PR Checks   Business Checking   [*****]
Hanesbrands Parent
  Bank of America   Hanesbrands Direct Deposit   Business Checking   [*****]
Hanesbrands Parent
  Bank of America   HanesbrandsTravel Adv. E-cash   Business Checking   [*****]
Hanesbrands Parent
  Bank of America   Hanesbrands PR E-cash   Business Checking   [*****]
Hanesbrands Parent
  Bank of America   Hanesbrands PR funding   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands AP Checks   Business Checking   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Tax Clearing   Clearing   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands AP ACH   Clearing   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Master   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Casualwear Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Direct Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Eden Yarns Inc. Note   Concentration   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Parent
  Chase   Leggs Products Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Playtex Apparel Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Outer Banks LLC Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Sock Company Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Printables Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Jogbra Inc Notes   Concentration   [*****]
Hanesbrands Parent
  Chase   Champion Products Inc Note   Concentration   [*****]
Hanesbrands Parent
  Chase   JE Morgan (Harwood Companies) Note   Concentration   [*****]
Hanesbrands Parent
  Chase   Host Apparel Note Account Harwood Industries   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Knit Products Note   Concentration   [*****]
Hanesbrands Parent
  Chase   The Harwood Companies Note Account   Concentration   [*****]
Hanesbrands Parent
  Chase   Hanesbrands Pacific Rim Note C/O
Hanesbrands Export   Concentration   [*****]
Hanesbrands Parent
  Chase   HBI LEASING WYOMING INC   Other   [*****]
Hanesbrands Parent
  Chase   CAYWEAR   Other   [*****]
Hanesbrands Parent
  Chase   ROOT CONSULTING INC UPEL   Other   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS HOSIERY CUSTOMER EFT RECEIPTS   Other   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS HOSIERY REFUNDS GUARANTEE DISBURSEMENTS   Business
Checking   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS HOSIERY CONCENTRATION   Concentration   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Parent
  Chase   HANESBRANDS HOSIERY CONCENTRATION   Concentration   [*****]
Hanesbrands Parent
  Chase   PLAYTEX DORADO HANESBRANDS INC   Other   [*****]
Hanesbrands Parent
  Chase   BALI FDN INC   Business Checking   [*****]
Hanesbrands Parent
  Chase   PLAYTEX CONCENTRATION(HANESBRANDS INTIMATES
& HOSIERY CON ACCT P)   Concentration   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS INTIMATES & HOSIERY CO-OP ADVERTISING   Other   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS PRINTABLES CONCENTRATION   Concentration   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS SPORTSWEAR   Other   [*****]
Hanesbrands Parent
  Chase   CHAMPION CUSTOMS   Other   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS KNIT PRODUCTS HANES MENSWEAR ACCT   Other   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS UNDERWEAR GENERAL ACCOUNT   General   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS UNDERWEAR CUSTOMS ACH   Other   [*****]
Hanesbrands Parent
  Chase   HARWOOD COMPANIES, INC   Other   [*****]
Hanesbrands Parent
  Chase   HANESBRANDS UNDERWEAR/CASUALWEAR LOCKBOX   Other   [*****]
Hanesbrands Parent
  Wachovia   HANEBRANDS SOCK   Lock Box   [*****]
Hanesbrands Parent
  Wachovia   JE Morgan   Depository   [*****]
Hanesbrands Parent
  Wachovia   JE Morgan   Depository   [*****]
Hanesbrands Parent
  Wachovia   Export   Depository   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Parent
  Wachovia   Outer Banks   Lock Box   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
BA International LLC
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Caribesock, Inc.
  Chase   Caribesock, Inc.   Other   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Caribetex, Inc.
  Chase   Caribetex   Other   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
CASA International, LLC
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Ceibena Del Inc. Ceibena Del Inc. Ceibena Del Inc. Ceibena Del Inc.
  Chase
Chase
Banco Mercantil
Banco Mercantil   CEIBENA DEL INC
MANUFACTURERS CEIBENA
Manufacturera Ceibena
Manufacturera Ceibena   Other
General
Operating
Operating   [*****]
[*****]
[*****]
[*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanes Menswear, LLC
  Banco Popular   Hanes Menswear   Concentration   [*****]
Hanes Menswear, LLC
  Banco Popular   Hanes Menswear   Business Checking   [*****]
Hanes Menswear, LLC
  Banco Popular   Hanes Menswear   Business Checking   [*****]
Hanes Menswear, LLC
  Banco Popular   Hanes Menswear   Business Checking   [*****]
Hanes Menswear, LLC
  Banco Popular   Hanes Menswear   General   [*****]
Hanes Menswear, LLC
  Chase   Hanes Menswear   General   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanes Puerto Rico, Inc.
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  Chase   Direct Note   Concentration   [*****]
Hanesbrands Direct, LLC
  JPMorgan Chase   Direct Costumer Refund   Disbursement — non payroll   [*****]
Hanesbrands Direct, LLC
  JPMorgan Chase   Direct Costumer Refund   Disbursement — non payroll   [*****]
Hanesbrands Direct, LLC
  JPMorgan Chase   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wachovia   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wachovia   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Security Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Alliance Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  American National Bank of TX   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  Americana Community
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Amsouth Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  BancorpSouth   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  BancorpSouth   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of America   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of America   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of America   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of America   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of Clarendon   Direct Store Deposits   Depository/Collection   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  Bank of New York   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of Ocean City   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of Odessa   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of Petaluma   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of the Cascades   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Bank of the West   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  BB&T   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Borrego Springs Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Centura Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Centura Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Chittenden Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Citizens Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Citizens Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Citizens National
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  City National Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  City National Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Columbia State Bank   Direct Store Deposits   Depository/Collection   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  Commerce Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Community Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Community Bank of Homestead   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  Community National
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Compass Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Covenant Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Dalton Whitfield
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  F&M Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Farmers Bank & Trust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Farmers Trust &
Savings   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Farmers Trust &
Savings   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First American Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Bank of Douglas City   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  First Bank of the Lake   Direct Store Deposits   Depository/Collection  
[*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  First Banking Center   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Century   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First Citizens   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First National Bank of (unspec)   Direct Store Deposits  
Depository/Collection   [***** ]
Hanesbrands Direct, LLC
  First National Bank of (unspec)   Direct Store Deposits  
Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First National Bank of Gwinnett   Direct Store Deposits  
Depository/Collection   [*****]
Hanesbrands Direct, LLC
  First National Bank of NE   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  First National Bank of Olathe   Direct Store Deposits   Depository/Collection
  [*****]
Hanesbrands Direct, LLC
  First National Bank of TX   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  First State Bank of Gainesville   Direct Store Deposits  
Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Frost National Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Gibsland Bank and Trust   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  Glens Falls
National Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Harris Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  HSBC Bank USA   Direct Store Deposits   Depository/Collection   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  Huntington National
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Irwin Union Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  JPMorgan Chase   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  JPMorgan Chase   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  JPMorgan Chase   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Legacy Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Legacy Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  M&T Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  McIntosh State Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Mid State Bank and Trust   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  Montgomery Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Five Star Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  National City Bank
(unspec)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  National City Bank
(unspec)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  National City Bank
(unspec)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  National City Bank
(unspec)   Direct Store Deposits   Depository/Collection   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  National City Bank
(unspec)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  National Penn   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Old Second National Bank   Direct Store Deposits   Depository/Collection  
[*****]
Hanesbrands Direct, LLC
  Ozark Mountain Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Ozark Mountain Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Park Avenue Bank
(GA, FL)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Pinnacle Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  PNC Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  PNC Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Premier Bank
(Missouri)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Premier Banks
(Minnesota)   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Queenstown Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Regions Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Regions Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Security National
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Security State Bank   Direct Store Deposits   Depository/Collection   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  Skagit State Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Skagit State Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Sky Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Somerset Trust Co   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  South Carolina Bank and Trust   Direct Store Deposits   Depository/Collection
  [*****]
Hanesbrands Direct, LLC
  Southeastern Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Southeastern Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  SunTrust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  SunTrust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  SunTrust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  SunTrust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Susquehanna Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  TD North   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  TD North   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  TD North   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  TD North   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  TD North   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Trustmark National
Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Tuscola National   Direct Store Deposits   Depository/Collection   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Direct, LLC
  US Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  US Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  US Bank   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wachovia   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wachovia   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wachovia   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Washington Mutual   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Washington Trust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wells Fargo   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wilmington Trust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wilson Bank & Trust   Direct Store Deposits   Depository/Collection   [*****]
Hanesbrands Direct, LLC
  Wrentham
Cooperative Bank   Direct Store Deposits   Depository/Collection   [*****]

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
HBI Branded Apparel Enterprises. LLC
  None            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Hanesbrands Distribution, Inc.
  Chase   Hanesbrands Distribution   Other   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
HBI Branded Apparel Limited Inc
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
HBI International, LLC
  Chase   HBI International LLC   Other   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
HBI Sourcing, LLC
  Chase   HBI Sourcing LLC   Other   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Inner Self, LLC
  Chase   Inner Self, LLC   General   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Jasper-Costa Rica, L.L.C.
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
National Textiles, LLC
  Chase   NATIONAL TEXTILES NOTE   Concentration   [*****]
National Textiles, LLC
  Chase   NATIONAL TEXTILES A/P   Business Checking   [*****]
National Textiles, LLC
  Chase   NATIONAL TEXTILES HOURLY PAYROLL   Business Checking   [*****]
National Textiles, LLC
  Chase   NATIONAL TEXTILES SALARY PAYROLL   Business Checking   [*****]
National Textiles, LLC
  Chase   NATIONAL TEXTILES MEDICAL/DENTAL   Business Checking   [*****]
National Textiles, LLC
  Chase   EDEN YARNS NOTE   Concentration   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
NT Investment Company
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Playtex Dorado, LLC
  BANCO POPULAR   PLAYTEX DORADO CORPORATION   Business Checking   [*****]
Playtex Dorado, LLC
  BANCO POPULAR   PLAYTEX DORADO CORPORATION   Business Checking   [*****]
Playtex Dorado, LLC
  Chase   PLAYTEX DORADO CORPORATION   Depository   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Playtex Industries Inc
  NONE            

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
Seamless Textiles LLC
  Banco Popular   SEAMLESS TEXTILES, INC.   Business Checking   [*****]
Seamless Textiles LLC
  Banco Popular   SEAMLESS TEXTILES, INC.   Business Checking   [*****]
Seamless Textiles LLC
  Chase   SEAMLESS TEXTILES, INC.   Depository   [*****]
Seamless Textiles LLC
  Banco Popular   Seamless MMIA Short Term   Cert of Deposit   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
UPCR Inc
  CHASE   UPCR INC   General   [*****]

 

--------------------------------------------------------------------------------

 

                  Name of Grantor   Bank Name   Account Title   Type of Account
  Bank Account Number
UPEL Inc
  CHASE   UPEL Inc   Other   [*****]

 

--------------------------------------------------------------------------------

 

BA International, L.L.C.
Caribesock, Inc.
Caribetex, Inc.
CASA International, LLC
Ceibena Del, Inc.
Hanes Menswear, LLC
Hanes Puerto Rico, Inc.
Hanesbrands Direct, LLC
Hanesbrands Distribution, Inc.
HBI Branded Apparel
Enterprises, LLC
HBI Branded Apparel Limited, Inc.
HbI International, LLC
HBI Sourcing, LLC
Inner Self LLC
National Textiles, L.L.C.
NT Investment Company, Inc.
Playtex Dorado, LLC
Playtex Industries, Inc.
Seamless Textiles, LLC
UPCR, Inc.
UPEL, Inc.

 

--------------------------------------------------------------------------------

 

ITEM 7.2.11(m) Permitted Dispositions

      Location of property   Description
[*****]
  Approximately 4.93 acres [*****]
[*****]
  Approximately 54,524 square foot building located on approximately 5.47 acres
[*****]
  Property currently leased to third party
[*****]
  [*****]
[*****]
  Approximately 267 acres [*****]
[*****]
  Approximately 173,805 square foot building
[*****]
  Approximately 28,000 square foot building
[*****]
  Several buildings aggregating approximately 47,802 square feet
[*****]
  Approximately 43,859 square foot building
[*****]
  Approximately 56,505 square foot building
[*****]
  Approximately 148,477 square foot building
[*****]
  Approximately 48,653 square foot building
[*****]
  Approximately 24,326 square foot building
[*****]
  Approximately 97,546 square foot building
[*****]
  Approximately 22,539 square foot building located on approximately 112,816
square feet of land
[*****]
  Approximately 603,338 square foot building located on approximately 13.9 acres

 

--------------------------------------------------------------------------------

 

SCHEDULE II
PERCENTAGES;
LIBOR OFFICE;
DOMESTIC OFFICE

                  NAME AND NOTICE             ADDRESS OF LENDER   LIBOR OFFICE  
DOMESTIC OFFICE   COMMITMENT
Merrill Lynch Capital
Corporation
  Merrill Lynch Capital
Corporation   Merrill Lynch Capital
Corporation     50 %
 
  4 World Financial Center
22nd Floor   4 World Financial Center
22nd Floor        
 
  New York, NY 10080   New York, NY 10080        
 
  Attn: Nancy Meadows            
 
  Tel: (212) 449-2879   Attn: Nancy Meadows        
 
  Fax: (212) 738-1186   Tel: (212) 449-2879        
 
  Email: Nancy_Meadows@ml.com   Fax: (212) 738-1186        
 
      Email:        
 
      Nancy_Meadows@ml.com        
 
               
Morgan Stanley Senior Funding, Inc.
  Morgan Stanley Senior Funding, Inc. 1585 Broadway   Morgan Stanley Senior
Funding, Inc. 1585 Broadway     50 %
 
  New York, NY 10036   New York, NY 10036        

NOTICE ADDRESS FOR ADMINISTRATIVE AGENT:
Citicorp USA, Inc.
2 Penns Way
Suite 100
New Castle, De 19720
Attention: Carin Seals

 

--------------------------------------------------------------------------------

 

Fax: (302) 894-6076
Phone: (212) 994-0967
E-mail: carin.seals@citigroup.com

 

--------------------------------------------------------------------------------

 

EXHIBIT A
[FORM OF] NOTE
     $                                                                                                                                                                                        
     FOR VALUE RECEIVED, HBI BRANDED APPAREL LIMITED, INC., a Delaware
corporation (the “Borrower”), promises to pay to the order of [NAME OF LENDER]
(the “Lender”) on the Stated Maturity Date the principal sum of
                    DOLLARS ($                    ) or, if less, the aggregate
unpaid principal amount of all Loans shown on the schedule attached hereto (and
any continuation thereof) made (or continued) by the Lender pursuant to that
certain Second Lien Credit Agreement, dated as of September 5, 2006 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among the Borrower, Hanesbrands Inc. (the “Company”), the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent,
Citibank, N.A., as the Collateral Agent, and Merrill Lynch Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the joint lead
arrangers and joint bookrunners (in such capacities, the “Lead Arrangers”).
Terms used in this Note, unless otherwise defined herein, have the meanings
provided in the Credit Agreement.
     The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
     Payments of both principal and interest are to be made pursuant to the
terms of the Credit Agreement.
     This Note is one of the Notes referred to in, and evidences Indebtedness
incurred under, the Credit Agreement, to which reference is made for a
description of the security for this Note, which security is subject to the
Intercreditor Agreement, and for a statement of the terms and conditions on
which the Borrower is permitted and required to make prepayments and repayments
of principal of the Indebtedness evidenced by this Note and on which such
Indebtedness may be declared to be immediately due and payable.
     All parties hereto, to the extent permitted by applicable law, whether as
makers, endorsers, or otherwise, severally waive presentment for payment,
demand, protest and notice of dishonor.
Note (Second Lien)

1

--------------------------------------------------------------------------------

 

     THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).

                  HBI BRANDED APPAREL LIMITED, INC.    
 
           
 
  By    
 
Name:    
 
      Title:    

Note (Second Lien)

2

--------------------------------------------------------------------------------

 

LOANS AND PRINCIPAL PAYMENTS

                                                                             
Amount of             Amount of Principal     Unpaid Principal                  
  Loan Made             Repaid     Balance                     Alternate    
LIBO     Interest     Alternate     LIBO     Alternate     LIBO            
Notation   Date   Base Rate     Rate     Period     Base Rate     Rate     Base
Rate     Rate     Total     Made By  
 
                                                                       

3

--------------------------------------------------------------------------------

 

EXHIBIT B
[FORM OF] BORROWING REQUEST
Citicorp USA, Inc.,
as Administrative Agent
2 Penns Way
Suite 100
New Castle, De 19720
Attention: Carin Seals
Fax: (302) 894-6076
Phone: (212) 994-0967
E-mail: carin.seals@citigroup.com
HBI BRANDED APPAREL LIMITED, INC.
Ladies and Gentlemen:
     This Borrowing Request is delivered to you pursuant to Section 2.2.1 of the
Second Lien Credit Agreement, dated as of September 5, 2006 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among HBI Branded Apparel Limited, Inc., a Delaware
corporation (the “Borrower”), Hanesbrands Inc. (the “Company”), the Lenders,
HSBC Bank USA, National Association, LaSalle Bank National Association and
Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch Pierce, Fenner
& Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent,
Citibank, N.A., as the Collateral Agent, and Merrill Lynch Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the Joint Lead
Arrangers and Joint Bookrunners. Terms used herein, unless otherwise defined
herein, have the meanings provided in the Credit Agreement.
     The Borrower hereby requests that a Loan be made in the aggregate principal
amount of $450,000,000 on September 5, 2006 as a [Base Rate Loan] [LIBO Rate
Loan having an Interest Period of one month].
     The Borrower hereby acknowledges that, pursuant to Section 5.21 of the
Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitutes a representation and warranty by the Borrower that, on the date of
the making of such Loans, and both before and after giving effect thereto, all
statements set forth in Section 5.20 of the Credit Agreement are true and
correct.
     The Borrower agrees that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct to the
extent set forth in Section 5.20 of the Credit Agreement at such time as if then
made, it will promptly so notify the Administrative Agent. Except to the extent,
if any, that prior to the time of the Borrowing
Borrowing Request (Second Lien)

1

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requested hereby the Administrative Agent shall receive written notice to the
contrary from the Borrower, each matter certified to herein shall be deemed once
again to be certified as true and correct to the extent set forth in
Section 5.20 of the Credit Agreement at the date of such Borrowing as if then
made.
     Please wire transfer the proceeds of the Borrowing to the accounts of the
following persons at the financial institutions indicated respectively:

                  Person to be Paid     Amount to           Name, Address, etc.
be Transferred   Name   Account No.   Of Transferee Lender
$                    
                                               
                                        
$                    
                                                Attention:                     
                                        
$                    
                                                Attention:                    
                                        
 
          Attention:                     
Balance of such proceeds
  The Borrower                                               
Attention:                    

Borrowing Request (Second Lien)

2

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     IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to be
executed and delivered, and the certifications and warranties contained herein
to be made, by its duly Authorized Officer, solely in such capacity and not as
an individual, this                      day of
                                        ,                    .

             
 
          HBI BRANDED APPAREL LIMITED, INC.
 
           
 
          By
 
           
 
          Name:
 
          Title:

Borrowing Request (Second Lien)

3

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EXHIBIT C
CONTINUATION/CONVERSION NOTICE
Citicorp USA, Inc.,
     as Administrative Agent
2 Penns Way
Suite 100
New Castle, DE 19720
Attention: Carin Seals
Fax: (302) 894-6076
Phone: (212) 994-0967
E-mail: carin.seals@citigroup.com
HBI BRANDED APPAREL LIMITED, INC.
Ladies and Gentlemen:
     This Continuation/Conversion Notice is delivered to you pursuant to
Section 2.3 of the Second Lien Credit Agreement, dated as of September 5, 2006
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Credit Agreement”), among HBI Branded Apparel Limited, Inc., a
Delaware corporation (the “Borrower”), Hanesbrands Inc. (the “Company”), the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent,
Citibank, N.A., as the Collateral Agent, and Merrill Lynch Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the joint lead
arrangers and joint bookrunners (in such capacities, the “Lead Arrangers”).
Terms used herein, unless otherwise defined herein, have the meanings provided
in the Credit Agreement.
     The Borrower hereby requests that on ___, ___1,
     (1) $___2 of the presently outstanding principal amount of the Loans
originally made on ___, ___, presently being maintained as [Base            Rate
Loans] [LIBO Rate Loans],
     (2) be [converted into] [continued as],
 

1   Insert date of Continuation/Conversion Notice which shall be on or before
10:00 a.m. on a Business Day on not less than three nor more than five Business
Days’ notice before the last day of the then current Interest Period with
respect thereto, to convert any Base Rate Loan into one or more LIBO Rate Loans
or to continue any LIBO Rate Loan; provided in the absence of prior notice as
required above (which notice may be delivered telephonically followed by written
confirmation within 24 hours thereafter by delivery of a Continuation/Conversion
Notice), with respect to any LIBO Rate Loan such LIBO Rate Loan shall, on such
last day, automatically convert to a Base Rate Loan.   2   Minimum of $1,000,000
and integral multiples of $1,000,000.

Contimuation/Conversion Notice (Second Lien)

1

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     (3)      [LIBO Rate Loans having an Interest Period of ___ [weeks]
[months]]3 [Base Rate Loans].
     [The undersigned hereby certifies that no Event of Default has occurred and
is continuing on the date of the proposed [conversion] [continuation]]4
 

3   Insert appropriate interest rate option and, if applicable, the number of
weeks (one or two) if available, or months (one, two, three or six, or if
available nine or twelve) with respect to LIBO Rate Loans.   4   Insert this
sentence only in the event of a conversion from a Base Rate Loan to a LIBO Rate
Loan or a continuation of a LIBO Rate Loan.

Contimuation/Conversion Notice (Second Lien)

2

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Borrower has caused this Continuation/Conversion
Notice to be executed and delivered by its duly Authorized Officer, solely in
such capacity and not as an individual, this ___day of ___, ___.

             
 
          HBI BRANDED APPAREL LIMITED, INC.
 
           
 
          By
 
           
  
          Name:
 
          Title:

Continuation/Conversion Notice (Second Lien)

3

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EXHIBIT D
[FORM OF] LENDER ASSIGNMENT AGREEMENT
_____________ ___, _____
To: HBI BRANDED APPAREL LIMITED, INC.,
as the Borrower
1000 East Hanes Mill Rd
Winston Salem, NC 27105
Attn: General Counsel
CITICORP USA, INC.,
as the Administrative Agent
2 Penns Way
Suite 100
New Castle, De 19720
Attention: Carin Seals
Fax: (302) 894-6076
Phone: (212) 994-0967
E-mail: carin.seals@citigroup.com
HBI BRANDED APPAREL LIMITED, INC.
Gentlemen and Ladies:
     This Lender Assignment Agreement (this “Assignment and Acceptance”) is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee]
(the “Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below, receipt of a
copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto (the “Standard Terms and
Conditions”) are hereby agreed to be incorporated herein by reference and made a
part of this Assignment and Acceptance.
     For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent (as defined below) as contemplated below (i) all of the
Assignor’s rights, benefits, obligations, liabilities and indemnities in its
capacity as a Lender under (and in connection with) the Credit Agreement and any
other Loan Documents to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the
Assignor under the facility identified below and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action
Lender Assignment Agreement (Second Lien)

1

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and any other right of the Assignor (in its capacity as a Lender) against any
Person, whether known or unknown, arising under or in connection with the Credit
Agreement, the other Loan Documents or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned pursuant to clauses
(i) and (ii) above being referred to herein collectively as, the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Acceptance, without
representation or warranty by the Assignor.
     This Assignment and Acceptance shall be effective as of the Effective Date
[upon the written consent of the Administrative Agent [and the Borrower (as
defined below)]1 ]2 being subscribed in the space indicated below.

         
1.
  Assignor:                                           
 
       
2.
  Assignee:                                           
 
      [and is an Affiliate/Approved Fund of [identify Lender]3]
3.
  Borrower:   HBI BRANDED APPAREL LIMITED, INC. (the “Borrower”)
 
       
4.
  Administrative Agent:   CITICORP USA, INC., as the administrative agent under
the Credit Agreement (the “Administrative Agent”)
 
       
5.
  Credit Agreement:   The Second Lien Credit Agreement, dated as of September 5,
2006 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the “Credit Agreement”), among the Borrower, Hanesbrands Inc. (the
“Company”), the Lenders, HSBC Bank USA, National Association, LaSalle Bank
National Association and Barclays Bank PLC, as the Co-Documentation Agents,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley Senior
Funding, Inc., as the Co-Syndication Agents, the Administrative Agent, Citibank,
N.A., as the Collateral Agent, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley Senior Funding, Inc., as the Joint Lead
Arrangers and Joint Bookrunners.
 
       
6.
  Assigned Interest:    

 

1   Borrower consent required only pursuant to clause (a)(i) of Section 10.11 of
the Credit Agreement.   2   Administrative Agent consent required for
assignments (i) to an Eligible Assignee that is not a Lender, Approved Fund or
an Affiliate of a Lender and (ii) pursuant to clause (a)(i) of Section 10.11 of
the Credit Agreement.   3   Select as applicable.

Lender Assignment Agreement (Second Lien)

2

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                  Aggregate Amount of   Amount of Loans   Percentage Assigned
Loans for all Lenders   Assigned   of Loans
$
  $         %  
$
  $         %  
$
  $         %  

  Effective Date:   [MONTH] ___, 20___

Lender Assignment Agreement (Second Lien)

3

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     The terms set forth in this Assignment and Acceptance are hereby agreed to
as of the Effective Date:

             
 
          ASSIGNOR
[NAME OF ASSIGNOR]
 
           
 
          By:
 
           
 
          Name:
 
          Title:
 
           
  
          ASSIGNEE
[NAME OF ASSIGNEE]
 
           
 
          By:
 
           
 
          Name:
 
          Title:

Lender Assignment Agreement (Second Lien)

4

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[Consented to and] Accepted:
CITICORP USA, INC.,
as the Administrative Agent
By:                                        
     Name:
     Title:
[Consented to:
HBI BRANDED APPAREL LIMITED, INC.,
as the Borrower
By:                                        
     Name:
     Title:]
Lender Assignment Agreement (Second Lien)

5

--------------------------------------------------------------------------------

 

ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
          1. Representations and Warranties.
          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby; and (b) except as provided in clause
(a) above, assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Borrower, the
Company, or any of their respective Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, the Company, any of their respective Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document.
          1.2 Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
is an Eligible Assignee under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.6 or 7.1.1 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, (v) without limiting the generality of the foregoing, it has
received a copy of the Intercreditor Agreement and understands that its rights
under the Loan Documents are subject to terms set forth in the Intercreditor
Agreement and (vi) if it is a Non-U.S. Lender, attached to this Assignment and
Acceptance is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Collateral Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
Lender Assignment Agreement (Second Lien)

6

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          2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
          3. General Provisions. This Assignment and Acceptance shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Acceptance may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Acceptance
by telecopy or facsimile (or other electronic) transmission shall be effective
as delivery of a manually executed counterpart of this Assignment and
Acceptance. This Assignment and Acceptance shall be deemed to be a contract made
under, governed by, and construed in accordance with, the laws of the State of
New York (including for such purposes Sections 5-1401 and 5-1402 of the General
Obligations Law of the State of New York) without regard to conflicts of laws
principles.
Lender Assignment Agreement (Second Lien)

7

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EXHIBIT E
COMPLIANCE CERTIFICATE (SECOND LIEN)
HANESBRANDS INC.
HBI BRANDED APPAREL LIMITED, INC.
     This Compliance Certificate is delivered pursuant to clause (c) of
Section 7.1.1 of the Second Lien Credit Agreement, dated as of September 5, 2006
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Credit Agreement”), among HBI Branded Apparel Limited, Inc., a
Delaware corporation (the “Borrower”), Hanesbrands Inc. (the “Company”), the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent,
Citibank, N.A., as the Collateral Agent, and Merrill Lynch Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the joint lead
arrangers and joint bookrunners (collectively, the “Lead Arrangers”). Terms used
herein that are defined in the Credit Agreement, unless otherwise defined
herein, have the meanings provided (or incorporated by reference) in the Credit
Agreement.
     Each of the Company and the Borrower hereby certifies, represents and
warrants as follows in respect of the period (the “Computation Period”)
commencing on ___ ___, ___and ending on ___ ___, ___(such latter date being the
“Computation Date”) and with respect to the Computation Date:
          1.      Defaults. As of the Computation Date, no Default had occurred
and was continuing. 1
          2.      Financial Covenants.
               •      Leverage Ratio. The Leverage Ratio on the Computation Date
was ___, as computed on Attachment 1 hereto. The maximum Leverage Ratio
permitted pursuant to clause (a) of Section 7.2.4 of the Credit Agreement on the
Computation Date was ___.
               •      Interest Coverage Ratio. The Interest Coverage Ratio for
the Computation Period was ___, as computed on Attachment 2 hereto. The minimum
Interest Coverage Ratio permitted pursuant to clause (b) of Section 7.2.4 of the
Credit Agreement for the Computation Period was ___.
 

1   If a Default has occurred, specify the details of such default and the
action that the Company or other Obligor has taken or proposes to take with
respect thereto.

Compliance Certificate (Second Lien)

1

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          3.      2 [Excess Cash Flow: The Excess Cash Flow was $___, as
computed on Attachment 3 hereto.] Such amount multiplied by the Applicable
Percentage (which is ___% based on the Leverage Ratio set forth above) is $___.
Such amount minus the aggregate amount of all voluntary prepayments of Loans
made during the Computation Period (which was $___) is equal to $___. As a
result,3 subject to Section 3.1.1(f) [the Borrower is required to make a
mandatory prepayment in such amount] 4[the Borrower is not required to make a
mandatory prepayment of Excess Cash Flow]
          4.      Subsidiaries: Except as set forth below, no Subsidiary of the
Company has been formed or acquired since the delivery of the last Compliance
Certificate. The formation and/or acquisition of such Subsidiary was in
compliance with Section 7.1.8 of the Credit Agreement.
     [Insert names of any new entities.]
          5.      Neither the Borrower nor any Obligor has changed its legal
name or jurisdiction of organization, during the Computation Period, except as
indicated on Attachment 4 hereto.
 

2   Use in the case of a Compliance Certificate delivered concurrently with the
financial information pursuant to clause (b) of Section 7.1.1 of the Credit
Agreement if applicable.   3   Use if amount is positive.   4   Use if amount is
zero or less.

Compliance Certificate (Second Lien)

2

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the undersigned have caused this Compliance Certificate
to be executed and delivered, and the certifications and warranties contained
herein, by their respective treasurer, chief financial or accounting Authorized
Officer, in each case, are made solely in such capacity and not as an
individual, as of ___ ___, 200_.

             
 
          HANESBRANDS INC.
 
           
 
          By
 
           
 
          Name:
 
          Title:
 
           
 
          HBI BRANDED APPAREL LIMITED, INC.
 
           
 
          By
 
           
 
          Name:
 
          Title:

Compliance Certificate (Second Lien)

3

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Attachment 1
(to __/__/__ Compliance
Certificate)
LEVERAGE RATIO
on ___________
(the “Computation Date”)
Leverage Ratio:

     
1.
  Total Debt: on the Computation Date, in each case exclusive of intercompany
Indebtedness between the Company and its Subsidiaries and any Contingent
Liability in respect of any of the following, the outstanding principal amount
of all Indebtedness of the Company and its Subsidiaries (other than a
Receivables Subsidiary), comprised of:.

             
 
  (a)   all obligations of such Person for borrowed money or advances and all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments                       
 
  (b)   all monetary obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker’s acceptances
issued for the account of such Person   $                    
 
  (c)   all Capitalized Lease Liabilities of such Person   $                    
 
  (d)   monetary obligations arising under Synthetic Leases  
$                    
 
  (e)   TOTAL DEBT: The sum of Item 1(a) through 1(d)   $                    

         
2.
  Net Income (the aggregate of all amounts which would be included as net income
on the consolidated financial statements of the Company and its Subsidiaries for
the Computation Period)1 .   $                    
3.
  to the extent deducted in determining Net Income, amounts attributable to
amortization (including amortization of goodwill and other intangible assets)  
$                    
4.
  to the extent deducted in determining Net Income, Federal, state, local and
foreign income withholding, franchise, state single business unitary and similar
Tax expense   $                    

 

1   The calculation of Net Income shall not include any net income of any
Foreign Supply Chain Entity, except to the extent cash is distributed by such
Foreign Supply Chain Entity during such period to the Company or any other
Subsidiary as a dividend or other distribution.

Compliance Certificate (Second Lien)

-1-

--------------------------------------------------------------------------------

 

         
5.
  to the extent deducted in determining Net Income, Interest Expense (the
aggregate interest expense (both, without duplication, when accrued or paid and
net of interest income paid during such period to the Company and its
Subsidiaries) of the Company and its Subsidiaries for such applicable period,
including the portion of any payments made in respect of Capitalized Lease
Liabilities allocable to interest expense)   $                    
6.
  to the extent deducted in determining Net Income, depreciation of assets  
$                    
7.
  to the extent deducted in determining Net Income, all non-cash charges,
including all non-cash charges associated with announced restructurings, whether
announced previously or in the future   $                    
8.
  to the extent deducted in determining Net Income, net cash charges associated
with or related to any contemplated restructurings in an aggregate amount not to
exceed, in any Fiscal Year, the Permitted Cash Restructuring Charge2 Amount for
such Fiscal Year   $                    
9.
  to the extent deducted in determining Net Income, net cash restructuring
charges associated with or related to the Spin-Off in an aggregate amount not to
exceed, in any Fiscal Year, the Permitted Cash Spin-Off Charge Amount for such
Fiscal Year3   $                    
10.
  to the extent deducted in determining Net Income, all amounts in respect of
extraordinary losses   $                    
11.
  to the extent deducted in determining Net Income, non-cash compensation
expense, or other non-cash expenses or charges, arising from the sale of stock,
the granting of stock options, the granting of stock appreciation rights and
similar arrangements (including any repricing, amendment, modification,
substitution or change of any such stock, stock option, stock appreciation
rights or similar arrangements)   $                    
12.
  to the extent included in determining Net Income, any financial advisory fees,
accounting fees, legal fees and other similar advisory and consulting fees, cash
charges in respect of strategic market reviews, management bonuses and early
retirement of Indebtedness, and related out-of-pocket expenses incurred by the
Company or any of its Subsidiaries as a result of the Transaction, including
fees and expenses in connection with the issuance, redemption or exchange of the
Bridge Loans, all determined in accordance with GAAP   $                    

 

2   The Permitted Cash Restructuring Charge Amount shall be $120,000,000 in the
aggregate for the Fiscal Year 2006 and all Fiscal Years ending after the Closing
Date.   3   The Permitted Cash Spin-Off Charge Amount for the Fiscal Year 2006
shall be $20,000,000 and for the Fiscal Year 2007 shall be $55,000,000.

Compliance Certificate (Second Lien)

2

--------------------------------------------------------------------------------

 

         
13.
  to the extent included in determining Net Income, non-cash or unrealized
losses on agreements with respect to Hedging Obligations   $                    
14.
  to the extent included in determining Net Income and to the extent
non-recurring and not capitalized, any financial advisory fees, accounting fees,
legal fees and similar advisory and consulting fees and related costs and
expenses of the Company and its Subsidiaries incurred as a result of Permitted
Acquisitions, Investments, Dispositions permitted under the Credit Agreement and
the issuance of Capital Securities or Indebtedness permitted under the Credit
Agreement, all determined in accordance with GAAP and in each case eliminating
any increase or decrease in income resulting from non-cash accounting
adjustments made in connection with the related Permitted Acquisition or
Dispositions   $                    
15.
  to the extent included in determining Net Income, and to the extent the
related loss in not added back pursuant to Item 21, all proceeds of business
interruption insurance policies   $                    
16.
  to the extent included in determining Net Income, expenses incurred by the
Company or any Subsidiary to the extent reimbursed in cash by a third party  
$                    
17.
  to the extent included in determining Net Income, extraordinary, unusual or
non-recurring cash charges not to exceed $10,000,000 in any Fiscal Year  
$                    
18.
  to the extent included in determining Net Income, all amounts in respect of
extraordinary gains or extraordinary losses   $                    
19.
  to the extent included in determining Net Income, non-cash gains on agreements
with respect to Hedging Obligations   $                    
20.
  to the extent included in determining Net Income, reversals (in whole or in
part) of any restructuring charges previously treated as Non-Cash Restructuring
Charges in any prior period   $                    
21.
  to the extent included in determining Net Income, non-cash items increasing
such Net Income for such period, other than (A) the accrual of revenue
consistent with past practice and (B) the reversal in such period of an accrual
of, or cash   $                    

Compliance Certificate (Second Lien)

3

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  reserve for, cash expenses in a prior period, to the extent such accrual or
reserve did not increase EBITDA in a prior period    
22.
  EBITDA4: The sum of Items 2 through 17 minus Items 18 through 21  
$                    
23.
  LEVERAGE RATIO: ratio of Item 1 to Item 22   :1
 
       

 

4   For purposes of calculating the Leverage Ratio with respect to the four
consecutive Fiscal Quarter period ending (i) nearest to December 31, 2006,
EBITDA shall be actual EBITDA for the Fiscal Quarter ending nearest to
December 31, 2006 multiplied by four; (ii) nearest to March 31, 2007, EBITDA
shall be actual EBITDA for the two Fiscal Quarter period ending nearest to
March 31, 2007 multiplied by two; and (iii) nearest to June 30, 2007, EBITDA
shall be actual EBITDA for the three Fiscal Quarter period ending nearest to
June 30, 2007 multiplied by one and one-third.

Compliance Certificate (Second Lien)

4

--------------------------------------------------------------------------------

 

Attachment 2
(to __/__/__ Compliance
Certificate)
INTEREST COVERAGE RATIO
on ___________
(the “Computation Date”)
•     Interest Coverage Ratio:

         
1.
  EBITDA (see Item 22 of Attachment 1)   $                    
2.
  Interest Expense of the Company and its Subsidiaries (see Item 5 of Attachment
1)1   $                    
3.
  INTEREST COVERAGE RATIO: ratio of Item 1 to Item 2   :1
 
       

 

1   For purposes of calculating Interest Expense with respect to the calculation
of the Interest Coverage Ratio with respect to the four consecutive Fiscal
Quarter period ending (i) nearest to December 31, 2006, Interest Expense shall
be actual Interest Expense for the Fiscal Quarter ending nearest to December 31,
2006 multiplied by four; (ii) nearest to March 31, 2007, Interest Expense shall
be actual Interest Expense for the two Fiscal Quarter period ending nearest to
March 31, 2007 multiplied by two; and (iii) nearest to June 30, 2007, Interest
Expense shall be actual Interest Expense for the three Fiscal Quarter period
ending nearest to June 30, 2007 multiplied by one and one-third.

Compliance Certificate (Second Lien)

5

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Attachment 3
(to __/__/__ Compliance
Certificate)
EXCESS CASH FLOW1
on the Computation Date

         
1.
  EBITDA (see Item 22 of Attachment 1)   $                    
2.
  Interest Expense actually paid in cash by the Company and its Subsidiaries  
$                    
3.
  scheduled principal repayments with respect to the permanent reduction of
Indebtedness, to the extent actually made and permitted to be made under the
Credit Agreement   $                    
4.
  all Federal, state, local and foreign income withholding, franchise, state
single business unitary and similar Taxes actually paid in cash or payable (only
to the extent related to Taxes associated with such Fiscal Year) by the Company
and its Subsidiaries   $                    
5.
  Capital Expenditures to the extent (x) actually made by the Company and its
Subsidiaries in such Fiscal Year or (y) committed to be made by the Company and
its Subsidiaries and that are permitted to be carried forward to the next
succeeding Fiscal Year pursuant to Section 7.2.7 of the Credit Agreement2.  
$                    
6.
  the portion of the purchase price paid in cash with respect to Permitted
Acquisitions to the extent such Permitted Acquisition was made in connection
with the Company’s offshore migration of its supply chain.  
$                    
7.
  cash Investments permitted to be made in Foreign Supply Chain Entities.  
$                    
8.
  to the extent permitted to be included in the calculation of EBITDA for such
Fiscal Year, the amount of Cash Restructuring Charges and Cash Spin-Off Charges
actually so included in such calculation.   $                    

 

1   Use in the case of a Compliance Certificate delivered concurrently with the
financial information pursuant to clause (b) of Section 7.1.1 of the Credit
Agreement.   2   The amounts deducted from Excess Cash Flow pursuant to clause
(y) of Item 5 shall not thereafter be deducted in the determination of Excess
Cash Flow for the Fiscal Year during which such payments were actually made.

Compliance Certificate (Second Lien)

-6-

--------------------------------------------------------------------------------

 

         
9.
  without duplication to any amounts deducted in preceding Item 2 through
Item 8, all items added back to EBITDA pursuant to clause (b) of the definition
of EBITDA in the Credit Agreement that represent amounts actually paid in cash  
$                    
10.
  The sum of Items 2 through 9   $                    
11.
  EXCESS CASH FLOW: Item 1 less Item 10   $                    

Compliance Certificate (Second Lien)

-7-

--------------------------------------------------------------------------------

 

Attachment 4
(to __/__/__ Compliance
Certificate)
CHANGE OF LEGAL NAME OR JURISDICTION OF INCORPORATION

          Name of Borrower or Other Obligor   New Legal Name or Jurisdiction of
Incorporation  
 
       
 
     
 
       
 
     

Compliance Certificate (Second Lien)

-8-

--------------------------------------------------------------------------------

 

EXHIBIT F
GUARANTY
THE EXERCISE BY THE ADMINISTRATIVE AGENT OR ANY OF THE SECURED PARTIES OF THEIR
RIGHTS HEREUNDER IS SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS OF THE
INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 5.14 BELOW.
     This GUARANTY (as amended, supplemented, amended and restated or otherwise
modified from time to time, this “Guaranty”), dated as of September 5, 2006, is
made by HANESBRANDS INC., a Maryland corporation (the “Company”) and each U.S.
Subsidiary of the Company other than the Borrower (as defined below), from time
to time party to this Guaranty (each individually, a “Subsidiary Guarantor” and,
together with the Company, each individually, a “Guarantor” and collectively,
the “Guarantors”), in favor of CITICORP USA, INC., as administrative agent
(together with its successor(s) thereto in such capacity, the “Administrative
Agent”) for each of the Secured Parties (capitalized terms used herein have the
meanings set forth in or incorporated by reference in Article I).
W I T N E S S E T H:
     WHEREAS, pursuant to a Second Lien Credit Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”), among HBI Branded Apparel
Limited, Inc. (the “Borrower”), the Company, the Lenders, the Administrative
Agent, Citibank, N.A., as the Collateral Agent, Merrill Lynch Pierce, Fenner &
Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the Lead
Arrangers and Syndication Agents, and HSBC Bank USA, National Association,
LaSalle Bank National Association and Barclays Bank PLC, as the Documentation
Agents, the Lenders have extended Commitments to make Loans to the Borrower; and
     WHEREAS, as a condition precedent to the making of the Loans under the
Credit Agreement, each Guarantor is required to execute and deliver this
Guaranty;
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
     SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
     “Administrative Agent” is defined in the preamble.
     “Borrower” is defined in the first recital.
Guaranty (Second Lien)

 

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     “Company” is defined in the preamble.
     “Credit Agreement” is defined in the first recital.
     “Guarantor” and “Guarantors” are defined in the preamble.
     “Guaranty” is defined in the preamble.
     SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Guaranty, including its
preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
     SECTION 2.1. Guaranty. Each Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably
     (a) guarantees the full and punctual payment when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of each Obligor now or hereafter existing, whether
for principal, interest (including interest accruing at the then applicable rate
provided in the Credit Agreement after the occurrence of any Event of Default
set forth in Section 8.1.9 of the Credit Agreement, whether or not a claim for
post-filing or post-petition interest is allowed under applicable law following
the institution of a proceeding under bankruptcy, insolvency or similar laws),
fees, expenses or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. §362(a), and the operation of Sections 502(b)
and 506(b) of the United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b));
and
     (b) indemnifies and holds harmless each Secured Party for any and all costs
and reasonable out-of-pocket expenses (including reasonable attorneys’ fees)
incurred by such Secured Party in enforcing any rights under this Guaranty (in
each case to the same extent the Secured Parties are indemnified and held
harmless pursuant to Sections 10.3 and 10.4 of the Credit Agreement);
provided, however, that each Guarantor shall only be liable under this Guaranty
for the maximum amount of such liability that can be hereby incurred without
rendering this Guaranty, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount. This Guaranty constitutes a guaranty of payment when due
and not of collection, and each Guarantor specifically agrees that to the extent
permitted by applicable law it shall not be necessary or required that any
Secured Party exercise any right, assert any claim or demand or enforce any
remedy whatsoever against any Obligor or any other Person before or as a
condition to the obligations of such Guarantor hereunder.
Guaranty (Second Lien)

2

--------------------------------------------------------------------------------

 

     SECTION 2.2. Reinstatement, etc. Each Guarantor hereby jointly and
severally agrees that this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Obligations is invalidated, declared to be fraudulent or
preferential, set aside, rescinded or must otherwise be restored by any Secured
Party, including upon the occurrence of any Default set forth in Section 8.1.9
of the Credit Agreement or otherwise, all as though such payment had not been
made.
     SECTION 2.3. Guaranty Absolute, etc. To the extent permitted by applicable
law, this Guaranty shall in all respects be a continuing, absolute,
unconditional and irrevocable guaranty of payment, and shall remain in full
force and effect until the Termination Date has occurred. Each Guarantor jointly
and severally guarantees that the Obligations will be paid strictly in
accordance with the terms of each Loan Document, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Secured Party with respect thereto. The
liability of each Guarantor under this Guaranty shall be joint and several,
absolute, unconditional and irrevocable to the extent permitted by applicable
law irrespective of:
     (a) any lack of validity, legality or enforceability of any Loan Document;
     (b) the failure of any Secured Party
     (i) to assert any claim or demand or to enforce any right or remedy against
any Obligor or any other Person (including any other guarantor) under the
provisions of any Loan Document, or
     (ii) to exercise any right or remedy against any other guarantor (including
any Guarantor) of, or collateral securing, any Obligations;
     (c) any change in the time, manner or place of payment of, or in any other
term of, all or any part of the Obligations, or any other extension, compromise
or renewal of any Obligation;
     (d) any reduction, limitation, impairment or termination of any Obligations
for any reason (other than the occurrence of the Termination Date), including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to (and each Guarantor hereby waives to the extent permitted by law,
any right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations or otherwise (other than the occurrence of the
Termination Date);
     (e) any amendment to, rescission, waiver, or other modification of, or any
consent to or departure from, any of the terms of any Loan Document;
     (f) any addition, exchange or release of any collateral or of any Person
that is (or will become) a guarantor (including a Guarantor hereunder) of the
Obligations, or any surrender or non-perfection of any collateral, or any
amendment to or waiver or release or
Guaranty (Second Lien)

3

--------------------------------------------------------------------------------

 

addition to, or consent to or departure from, any other guaranty held by any
Secured Party securing any of the Obligations; or
     (g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Obligor, any surety or
any guarantor (other than payment or performance of the Obligations, in each
case in full and, with respect to payments, in cash).
     SECTION 2.4. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Event of Default described in clauses (a) through
(d) of Section 8.1.9 of the Credit Agreement or, with the consent of the
Required Lenders, upon the occurrence and during the continuance of any other
Event of Default (in each case, subject to the terms and conditions of the
Intercreditor Agreement), have the right to appropriate and apply to the payment
of the Obligations owing to it (if then due and payable), any and all balances,
credits, deposits, accounts or moneys of such Guarantor then or thereafter
maintained with such Secured Party (other than payroll, trust or tax accounts);
provided that any such appropriation and application shall be subject to the
provisions of Section 4.8 of the Credit Agreement. Each Secured Party agrees
promptly to notify the applicable Guarantor and the Administrative Agent after
any such appropriation and application made by such Secured Party; provided that
the failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this Section are in addition
to other rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Secured Party may have.
     SECTION 2.5. Waiver, etc. Each Guarantor hereby waives, to the extent
permitted by law, promptness, diligence, notice of acceptance and any other
notice with respect to any of the Obligations and this Guaranty and any
requirement that any Secured Party protect, secure, perfect or insure any Lien,
or any property subject thereto, or exhaust any right or take any action against
any Obligor or any other Person (including any other guarantor) or entity or any
collateral securing the Obligations (subject to the terms and conditions of the
Intercreditor Agreement), as the case may be.
     SECTION 2.6. Postponement of Subrogation, etc. Each Guarantor agrees that
it will, to the extent permitted by law, not exercise any rights which it may
acquire by way of rights of subrogation under any Loan Document, nor shall any
Guarantor seek any contribution or reimbursement from any Obligor in respect of
any payment made under any Loan Document until following the Termination Date.
Any amount paid to any Guarantor on account of any such subrogation rights prior
to the Termination Date shall (subject to the terms of the Intercreditor
Agreement) be held in trust for the benefit of the Secured Parties and shall
(subject to the terms of the Intercreditor Agreement) immediately be paid and
turned over to the Administrative Agent for the benefit of the Secured Parties
in the exact form received by such Guarantor (duly endorsed in favor of the
Administrative Agent, if required), to be credited and applied against the
outstanding Obligations, in accordance with the Intercreditor Agreement and
Section 2.7; provided, however, that if any Guarantor has made payment to the
Secured Parties of all or any part of the Obligations and the Termination Date
has occurred, then at such Guarantor’s request, the Administrative Agent (on
behalf of the Secured Parties) will, at the expense of such Guarantor, execute
and deliver to such Guarantor appropriate documents (without recourse and
without representation or warranty) necessary to evidence the transfer by
subrogation to such
Guaranty (Second Lien)

4

--------------------------------------------------------------------------------

 

Guarantor of an interest in the Obligations resulting from such payment. In
furtherance of the foregoing, at all times prior to the Termination Date, each
Guarantor shall refrain from taking any action or commencing any proceeding
against any Obligor (or its successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise) to recover any amounts in respect of
payments made under this Guaranty to any Secured Party other than as required by
applicable law to preserve such rights.
     SECTION 2.7. Payments; Application. Subject to the terms, conditions and
provisions of the Intercreditor Agreement, each Guarantor hereby agrees with
each Secured Party as follows to the extent permitted by applicable law:
     (a) Each Guarantor agrees that all payments made by such Guarantor
hereunder will be made in Dollars to the Administrative Agent, without set-off,
counterclaim or other defense (other than the defense of payment or performance)
and in accordance with Sections 4.6 and 4.7 of the Credit Agreement, free and
clear of and without deduction for any Taxes, each Guarantor hereby agreeing to
comply with and be bound by the provisions of Sections 4.6 and 4.7 of the Credit
Agreement in respect of all payments made by it hereunder and the provisions of
which Sections are hereby incorporated into and made a part of this Guaranty by
this reference as if set forth herein; provided, that references to the
“Borrower” in such Sections shall also be deemed to be references to each
Guarantor, and references to “this Agreement” in such Sections shall be deemed
to be references to this Guaranty.
     (b) All payments made hereunder shall be applied upon receipt as set forth
in Section 4.7 of the Credit Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     In order to induce the Secured Parties to enter into the Credit Agreement
and make Loans, each Guarantor represents and warrants to each Secured Party as
set forth below.
     SECTION 3.1. Credit Agreement Representations and Warranties. The
representations and warranties contained in Article VI of the Credit Agreement,
insofar as the representations and warranties contained therein are applicable
to any Guarantor and its properties, are true and correct in all material
respects, each such representation and warranty set forth in such Article
(insofar as applicable as aforesaid) and all other terms of the Credit Agreement
to which reference is made therein, together with all related definitions and
ancillary provisions, being hereby incorporated into this Guaranty by this
reference as though specifically set forth in this Article.
     SECTION 3.2. Financial Condition, etc. Each Guarantor has knowledge of each
other Obligor’s financial condition and affairs and that it has adequate means
to obtain from each such Obligor on an ongoing basis information relating
thereto and to such Obligor’s ability to pay and perform the Obligations, and
agrees to assume the responsibility for keeping, and to keep, so informed for so
long as this Guaranty is in effect. Each Guarantor acknowledges and agrees that
Guaranty (Second Lien)

5

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the Secured Parties shall have no obligation to investigate the financial
condition or affairs of any Obligor for the benefit of such Guarantor nor to
advise such Guarantor of any fact respecting, or any change in, the financial
condition or affairs of any other Obligor that might become known to any Secured
Party at any time, whether or not such Secured Party knows or believes or has
reason to know or believe that any such fact or change is unknown to such
Guarantor, or might (or does) materially increase the risk of such Guarantor as
guarantor, or might (or would) affect the willingness of such Guarantor to
continue as a guarantor of the Obligations.
     SECTION 3.3. Best Interests. It is in the best interests of each Guarantor
to execute this Guaranty inasmuch as such Guarantor will, as a result of being
an Affiliate of the Borrower, derive substantial direct and indirect benefits
from the Loans made from time to time to the Borrower by the Lenders pursuant to
the Credit Agreement and each Guarantor agrees that the Secured Parties are
relying on this representation in agreeing to make Loans to the Borrower.
ARTICLE IV
COVENANTS, ETC.
     Each Guarantor covenants and agrees that, at all times prior to the
Termination Date, it will perform, comply with and be bound by all of the
agreements to which it is a party, covenants and obligations contained in the
Credit Agreement which are applicable to such Guarantor or its properties, each
such agreement, covenant and obligation contained in the Credit Agreement and
all other terms of the Credit Agreement to which reference is made in this
Article, together with all related definitions and ancillary provisions, being
hereby incorporated into this Guaranty by this reference as though specifically
set forth in this Article.
ARTICLE V
MISCELLANEOUS PROVISIONS
     SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
     SECTION 5.2. Binding on Successors, Transferees and Assigns; Assignment.
This Guaranty shall remain in full force and effect until the Termination Date
has occurred, shall be jointly and severally binding upon each Guarantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and permitted
assigns; provided, however, that no Guarantor may (unless otherwise permitted
under the terms of the Credit Agreement) assign any of its obligations hereunder
without the prior written consent of all Lenders.
     SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by any Guarantor from its
obligations under this Guaranty, shall in any event be effective unless the same
shall be in writing and signed by the
Guaranty (Second Lien)

6

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Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
     SECTION 5.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party (in the case of any Subsidiary Guarantor, in care of the Company) set
forth on Schedule II to the Credit Agreement or at such other address or
facsimile number as may be designated by such party in a notice to the other
party. Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any such notice, if transmitted by facsimile, shall be deemed
given when the confirmation of transmission thereof is received by the
transmitter.
     SECTION 5.5. Additional Guarantors. Upon the execution and delivery by any
other Person of a supplement in the form of Annex I hereto, such Person shall
become a “Guarantor” hereunder with the same force and effect as if it were
originally a party to this Guaranty and named as a “Guarantor” hereunder. The
execution and delivery of such supplement shall not require the consent of any
other Guarantor hereunder (except to the extent a consent has been obtained),
and the rights and obligations of each Guarantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Guarantor as a party to
this Guaranty.
     SECTION 5.6. Release of Guarantor. Upon the occurrence of the Termination
Date, this Guaranty and all obligations of each Guarantor hereunder shall
terminate, without delivery of any instrument or performance of any act by any
party. In addition, at the request of the Company, and at the sole expense of
the Company, a Subsidiary Guarantor shall be automatically released from its
obligations hereunder in the event that the Capital Securities of such
Subsidiary Guarantor are Disposed of in a transaction permitted by the Credit
Agreement; provided that the Company shall have delivered to the Administrative
Agent, prior to the date of the proposed release, a written request for release
identifying the relevant Subsidiary Guarantor. The Administrative Agent agrees
to deliver to the Company, at the Company’s sole expense, such documents as the
Company may reasonably request to evidence such termination and release.
     SECTION 5.7. No Waiver; Remedies. In addition to, and not in limitation of,
Sections 2.3 and 2.5, no failure on the part of any Secured Party to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
     SECTION 5.8. Section Captions. Section captions used in this Guaranty are
for convenience of reference only, and shall not affect the construction of this
Guaranty.
     SECTION 5.9. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be
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7

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ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty.
     SECTION 5.10. Governing Law, Entire Agreement, etc. THIS GUARANTY WILL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Guaranty and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and supersede any prior
agreements, written or oral, with respect thereto.
     SECTION 5.11. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR ANY GUARANTOR
IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT’S OPTION (SUBJECT TO THE INTERCREDITOR AGREEMENT), IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH
GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK
AT THE ADDRESS FOR NOTICES SPECIFIED FOR THE COMPANY IN SECTION 10.2 OF THE
CREDIT AGREEMENT. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH
GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.
     SECTION 5.12. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT (ON BEHALF OF
ITSELF AND EACH OTHER SECURED PARTY) AND EACH GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
Guaranty (Second Lien)

8

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OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER OR SUCH GUARANTOR IN
CONNECTION THEREWITH. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND EACH LENDER
ENTERING INTO THE LOAN DOCUMENTS.
     SECTION 5.13. Counterparts. This Guaranty may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Guaranty by
facsimile (or other electronic) transmission shall be effective as delivery of a
manually executed counterpart of this Guaranty.
     SECTION 5.14. Intercreditor Agreement. Notwithstanding anything herein to
the contrary, the exercise of any right or remedy by the Collateral Agent,
Administrative Agent or any Lender hereunder is subject to the terms, conditions
and provisions of the Intercreditor Agreement in all respects. In the event of
any conflict between the terms of the Intercreditor Agreement and this Guaranty,
the terms of the Intercreditor Agreement shall govern and control in all
respects.
Guaranty (Second Lien)

9

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     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its Authorized Officer, solely in such capacity and
not as an individual, as of the date first above written.

         
 
  HANESBRANDS INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  HANESBRANDS DIRECT, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  UPEL, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  CARIBETEX, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  SEAMLESS TEXTILES, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:

Guaranty (Second Lien)

10

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  BA INTERNATIONAL, L.L.C.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  HBI INTERNATIONAL, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  HBI BRANDED APPAREL ENTERPRISES, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  CASA INTERNATIONAL, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  UPCR, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:

Guaranty (Second Lien)

11

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  HBI SOURCING, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  CEIBENA DEL, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  NT INVESTMENT COMPANY, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  HANESBRANDS DISTRIBUTION, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  CARIBESOCK, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:

Guaranty (Second Lien)

12

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  NATIONAL TEXTILES, L.L.C.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  HANES PUERTO RICO, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  PLAYTEX INDUSTRIES, INC.
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  INNER SELF LLC
 
       
 
  By:    
 
       
 
      Name:
Title:
 
       
 
  PLAYTEX DORADO, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:

Guaranty (Second Lien)

13

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  HANES MENSWEAR, LLC
 
       
 
  By:    
 
       
 
      Name:
Title:

Guaranty (Second Lien)

14

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          ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
 
        CITICORP USA, INC.,
     as Administrative Agent
 
        By:               Name:
Title:

Guaranty (Second Lien)

15

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ANNEX I to
the Guaranty
     THIS SUPPLEMENT, dated as of ____________ ___, ____________ (this
“Supplement”), is to the Guaranty, dated as of September 5, 2006 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Guaranty”), among the Guarantors (such capitalized term, and other terms used
in this Supplement, to have the meanings set forth or incorporated by reference
in Article I of the Guaranty) from time to time party thereto, in favor of
CITICORP USA, INC., as administrative agent (together with its successor(s)
thereto in such capacity, the “Administrative Agent”) for each of the Secured
Parties.
W I T N E S S E T H:
     WHEREAS, pursuant to the provisions of Section 5.5 of the Guaranty, each of
the undersigned is becoming a Guarantor under the Guaranty; and
     WHEREAS, each of the undersigned desires to become a “Guarantor” under the
Guaranty in order to induce each Secured Party to continue its Loans under the
Credit Agreement;
     NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged),
each of the undersigned agrees, for the benefit of each Secured Party, as
follows.
     SECTION 1. Party to Guaranty, etc. In accordance with the terms of the
Guaranty, by its signature below, each of the undersigned hereby irrevocably
agrees to become a Guarantor under the Guaranty with the same force and effect
as if it were an original signatory thereto and each of the undersigned hereby
(a) agrees to be bound by and comply with all of the terms and provisions of the
Guaranty applicable to it as a Guarantor and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct in all material respects as of the date hereof. In furtherance of
the foregoing, each reference to a “Guarantor” and/or “Guarantors” in the
Guaranty shall be deemed to include each of the undersigned.
     SECTION 2. Representations. Each of the undersigned hereby represents and
warrants that this Supplement has been duly authorized, executed and delivered
by it and that this Supplement and the Guaranty constitute the legal, valid and
binding obligation of each of the undersigned, enforceable (except, in any case,
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by
principles of equity) against it in accordance with its terms.
     SECTION 3. Full Force of Guaranty. Except as expressly supplemented hereby,
the Guaranty shall remain in full force and effect in accordance with its terms.
     SECTION 4. Severability. Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision
Guaranty (Second Lien)

 

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shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Supplement or the Guaranty.
     SECTION 5. Indemnity; Fees and Expenses, etc. Without limiting the
provisions of any other Loan Document, each of the undersigned agrees to
reimburse the Administrative Agent for its reasonable out-of-pocket expenses
incurred in connection with this Supplement, including reasonable attorney’s
fees and out-of-pocket expenses of the Administrative Agent’s counsel.
     SECTION 6. Governing Law, Entire Agreement, etc. THIS SUPPLEMENT WILL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Supplement and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and supersede any prior
agreements, written or oral, with respect thereto.
     SECTION 7. Counterparts. This Supplement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Supplement by
facsimile (or other electronic) transmission shall be effective as delivery of a
manually executed counterpart of this Supplement.
     SECTION 8. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, the exercise of any right or remedy by the Collateral Agent,
Administrative Agent or any Lender hereunder or under the Guaranty, as
supplemented hereby, is subject to the terms, conditions and provisions of the
Intercreditor Agreement in all respects. In the event of any conflict between
the terms of the Intercreditor Agreement and the Guaranty or this Supplement,
the terms of the Intercreditor Agreement shall govern and control.
Guaranty (Second Lien)

Annex I-2

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to
be duly executed and delivered by its Authorized Officer as of the date first
above written.

             
 
      [NAME OF ADDITIONAL SUBSIDIARY]
 
           
 
      By:    
 
           
 
          Name:
Title:
 
           
 
      [NAME OF ADDITIONAL SUBSIDIARY]
 
           
 
      By:    
 
           
 
          Name:
Title:
 
           
 
      [NAME OF ADDITIONAL SUBSIDIARY]
 
           
 
      By:    
 
           
 
          Name:
Title:
 
            ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:        
 
            CITICORP USA, INC.,
     as Administrative Agent        
 
           
By:
           
 
           
 
  Name:
Title:        

Guaranty (Second Lien)

Annex I-3

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EXHIBIT G
EXECUTION COPY
PLEDGE AND SECURITY AGREEMENT
THE EXERCISE BY THE COLLATERAL AGENT, ADMINISTRATIVE AGENT OR ANY LENDER
HEREUNDER OF ITS RIGHTS HEREUNDER IS SUBJECT TO THE TERMS, CONDITIONS AND
RESTRICTIONS IN THE INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 7.13 BELOW.
     This PLEDGE AND SECURITY AGREEMENT, dated as of September 5, 2006 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this “Security Agreement”), is made by HANESBRANDS INC., a Maryland
corporation (the “Company”), HBI BRANDED APPAREL LIMITED, INC., a Delaware
corporation (the “Borrower”), and each Subsidiary Guarantor (terms used in the
preamble and the recitals have the definitions set forth in or incorporated by
reference in Article I) from time to time a party to this Security Agreement
(each individually a “Grantor” and collectively, the “Grantors”), in favor of
CITIBANK, N.A., a national banking association organized under the laws of the
United States, as the collateral agent (together with its successor(s) thereto
in such capacity, the “Collateral Agent”) for each of the Secured Parties and
CITICORP USA, INC., as the administrative agent (together with its successor(s)
thereto in such capacity, the “Administrative Agent”) for each of the Secured
Parties.
W I T N E S S E T H:
     WHEREAS, pursuant to a Second Lien Credit Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”), among the Company, the
Borrower, the Lenders, HSBC Bank USA, National Association, LaSalle Bank
National Association and Barclays Bank PLC, as the Co-Documentation Agents,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley Senior
Funding, Inc., as the Co-Syndication Agents, the Administrative Agent, the
Collateral Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as the Joint Lead Arrangers and Joint
Bookrunners, the Lenders have extended Commitments to make Loans to the
Borrower;
     WHEREAS, as a condition precedent to the making of the Loans under the
Credit Agreement, each Grantor is required to execute and deliver this Security
Agreement; and
     WHEREAS, the Liens granted hereunder in respect of the Collateral are
subject to the terms, conditions and provisions of the Intercreditor Agreement
in all respects;
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees, for the
benefit of each Secured Party, as follows:
Pledge and Security Agreement (Second Lien)

 

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ARTICLE VII
DEFINITIONS
     SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
     “Administrative Agent” is defined in the preamble.
     “Borrower” is defined in the preamble.
     “Collateral” is defined in Section 2.1.
     “Collateral Account” is defined in clause (b) of Section 4.3.
     “Collateral Agent” is defined in the preamble.
     “Company” is defined in the preamble.
     “Computer Hardware and Software Collateral” means all of the Grantors’
right, title and interest in and to:
          (a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape drives,
hard and soft disk drives, cables, electrical supply hardware, generators, power
equalizers, accessories and all peripheral devices and other related computer
hardware, including all operating system software, utilities and application
programs in whatsoever form;
          (b) all software programs (including both source code, object code and
all related applications and data files), designed for use on the computers and
electronic data processing hardware described in clause (a) above;
          (c) all firmware associated therewith;
          (d) all documentation (including flow charts, logic diagrams, manuals,
guides, specifications, training materials, charts and pseudo codes) with
respect to such hardware, software and firmware described in the preceding
clauses (a) through (c); and
          (e) all rights with respect to all of the foregoing, including
copyrights, licenses, options, warranties, service contracts, program services,
test rights, maintenance rights, support rights, improvement rights, renewal
rights and indemnifications and any substitutions, replacements, improvements,
error corrections, updates, additions or model conversions of any of the
foregoing;
provided that the foregoing shall not include Excluded Collateral.
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3

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     “Control Agreement” means an authenticated record in form and substance
reasonably satisfactory to the Collateral Agent, that provides for the
Collateral Agent to have “control” (as defined in the UCC) over certain
Collateral as provided herein.
     “Copyright Collateral” means all of the Grantors’ right, title and interest
in and to:
          (a) all U.S. copyrights, registered or unregistered and whether
published or unpublished, now or hereafter in force including copyrights
registered or applied for in the United States Copyright Office, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation and all extensions and renewals of
the foregoing (“Copyrights”), including the Copyrights which are the subject of
a registration or application referred to in Item A of Schedule V;
          (b) all express or implied Copyright licenses and other agreements for
the grant by or to such Grantor of any right to use any items of the type
referred to in clause (a) above (each a “Copyright License”), including each
Copyright License referred to in Item B of Schedule V;
          (c) the right to sue for past, present and future infringements of any
of the Copyrights owned by such Grantor, and for breach or enforcement of any
Copyright License; and
          (d) all proceeds of, and rights associated with, the foregoing
(including Proceeds, licenses, royalties, income, payments, claims, damages and
proceeds of infringement suits);
provided that the foregoing shall not include Excluded Collateral.
     “Credit Agreement” is defined in the first recital.
     “Distributions” means all dividends paid on Capital Securities, liquidating
dividends paid on Capital Securities, shares (or other designations) of Capital
Securities resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions on or with respect to any Capital
Securities constituting Collateral.
     “Excluded Accounts” means payroll accounts, petty cash accounts, pension
fund accounts, 401(k) accounts, zero-balance accounts and other accounts that
any Grantor may hold in trust for others.
     “Excluded Collateral” is defined in Section 2.1.
     “General Intangibles” means all “general intangibles” and all “payment
intangibles”, each as defined in the UCC, and shall include all interest rate or
currency protection or hedging arrangements, all tax refunds, all licenses,
permits, concessions and authorizations and all Intellectual Property Collateral
(in each case, regardless of whether characterized as general intangibles under
the UCC).
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4

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     “Grantor” and “Grantors” are defined in the preamble.
     “Intellectual Property” means Trademarks, Patents, Copyrights, Trade
Secrets and all other similar types of intellectual property under any law,
statutory provision or common law doctrine in the United States.
     “Intellectual Property Collateral” means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
     “Owned Intellectual Property Collateral” means all Intellectual Property
Collateral that is owned by the Grantors.
     “Patent Collateral” means all of the Grantors’ right, title and interest in
and to:
          (a) inventions and discoveries, whether patentable or not, all letters
patent and applications for United States letters patent, including all United
States patent applications in preparation for filing, including all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations of any of the foregoing, including all patents issued by, or
patent applications filed with, the United States Patent and Trademark Office
(“Patents”), including each Patent and Patent application referred to in Item A
of Schedule III;
          (b) all Patent licenses, and other agreements for the grant by or to
such Grantor of any right to use any items of the type referred to in clause (a)
above (each a “Patent License”), including each Patent License referred to in
Item B of Schedule III;
          (c) the right to sue third parties for past, present and future
infringements of any Patent or Patent application, and for breach or enforcement
of any Patent License; and
          (d) all proceeds of, and rights associated with, the foregoing
(including Proceeds, licenses, royalties, income, payments, claims, damages and
proceeds of infringement suits);
provided that the foregoing shall not include Excluded Collateral.
     “Permitted Liens” means all Liens permitted by Section 7.2.3 of the Credit
Agreement or any other Loan Document.
     “Second-Priority” means , with respect to any Lien purported to be created
in any Collateral pursuant to any Loan Document, that such Lien is the most
senior Lien to which such Collateral is subject (other than (i) Liens created to
secure the obligations under the First Lien Loan Documents and as otherwise
permitted under the Intercreditor Agreement and (ii) any other Permitted Liens).
     “Securities Act” is defined in clause (a) of Section 6.2.
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5

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     “Security Agreement” is defined in the preamble.
     “Trademark Collateral” means all of the Grantors’ right, title and interest
in and to:
          (a) (i) all United States trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now existing
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent and
Trademark Office, and all common-law rights relating to the foregoing, and
(ii) the right to obtain all reissues, extensions or renewals of the foregoing
(collectively referred to as “Trademarks”), including those Trademarks referred
to in Item A of Schedule IV;
          (b) all Trademark licenses and other agreements for the grant by or to
such Grantor of any right to use any Trademark (each a “Trademark License”),
including each Trademark License referred to in Item B of Schedule IV; and
          (c) all of the goodwill of the business connected with the use of, and
symbolized by the Trademarks described in clause (a) and, to the extent
applicable, clause (b);
          (d) the right to sue third parties for past, present and future
infringements or dilution of the Trademarks described in clause (a) and, to the
extent applicable, clause (b) or for any injury to the goodwill associated with
the use of any such Trademark or for breach or enforcement of any Trademark
License; and
          (e) all proceeds of, and rights associated with, the foregoing
(including Proceeds, licenses, royalties, income, payments, claims, damages and
proceeds of infringement suits);
provided that the foregoing shall not include Excluded Collateral.
     “Trade Secrets Collateral” means all of the Grantors’ right, title and
interest throughout the world in and to (a) all common law and statutory trade
secrets and all other confidential, proprietary or useful information and all
know how (collectively referred to as “Trade Secrets”) obtained by or used in or
contemplated at any time for use in the business of a Grantor, whether or not
such Trade Secret has been reduced to a writing or other tangible form,
including all Documents and things embodying, incorporating or referring in any
way to such Trade Secret, (b) all Trade Secret licenses and other agreements for
the grant by or to such Grantor of any right to use any Trade Secret (each a
“Trade Secret License”) including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret License, and
(d) all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits);
provided that the foregoing shall not include Excluded Collateral.
Pledge and Security Agreement (Second Lien)

6

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     SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
     SECTION 1.3. UCC Definitions. When used herein the terms Account,
Certificate of Title, Certificated Securities, Chattel Paper, Commercial Tort
Claim, Commodity Account, Commodity Contract, Deposit Account, Document,
Electronic Chattel Paper, Equipment, Goods, Instrument, Inventory, Investment
Property, Letter-of-Credit Rights, Payment Intangibles, Proceeds, Promissory
Notes, Securities Account, Security Entitlement, Supporting Obligations and
Uncertificated Securities have the meaning provided in Article 8 or Article 9,
as applicable, of the UCC. Letters of Credit has the meaning provided in
Section 5-102 of the UCC.
ARTICLE II
SECURITY INTEREST
     SECTION 2.1. Grant of Security Interest. Each Grantor hereby grants to the
Collateral Agent, for its benefit and the ratable benefit of each other Secured
Party, a continuing security interest in all of such Grantor’s right, title and
interest in and to the following property, whether now or hereafter existing,
owned or acquired by such Grantor, and wherever located, (collectively, the
“Collateral”):
          (a) Accounts;
          (b) Chattel Paper;
          (c) Commercial Tort Claims listed on Item I of Schedule II (as such
schedule may be amended or supplemented from time to time);
          (d) Deposit Accounts;
          (e) Documents;
          (f) General Intangibles;
          (g) Goods;
          (h) Instruments;
          (i) Investment Property;
          (j) Letter-of-Credit Rights and Letters of Credit;
          (k) Supporting Obligations;
          (l) all books, records, writings, databases, information and other
property relating to, used or useful in connection with, evidencing, embodying,
incorporating or referring to, any of the foregoing in this Section;
Pledge and Security Agreement (Second Lien)

7

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          (m) all Proceeds and products of the foregoing and, to the extent not
otherwise included, all payments under insurance (whether or not the Collateral
Agent is the loss payee thereof); and
          (n) all other property and rights of every kind and description and
interests therein.
     Notwithstanding the foregoing, the term “Collateral” shall not include the
following (collectively, the “Excluded Collateral”):
               (i) such Grantor’s real property interests (including fee real
estate, leasehold interests and fixtures);
               (ii) any General Intangibles, healthcare insurance receivables or
other rights arising under any contracts, instruments, licenses or other
documents as to which the grant of a security interest would (A) constitute a
violation of a valid and enforceable restriction in favor of a third party on
such grant, unless any required consent shall have been obtained, (B) give any
other party to such contract, instrument, license or other document the right to
terminate its obligations thereunder, or (C) otherwise cause such Grantor to
lose material rights thereunder;
               (iii) Investment Property consisting of Capital Securities of a
direct Foreign Subsidiary of such Grantor, in excess of 65% of the total
combined voting power of all Capital Securities of each such direct Foreign
Subsidiary, except that such 65% limitation shall not apply to a direct Foreign
Subsidiary that (x) is treated as a partnership under the Code or (y) is not
treated as an entity that is separate from (A) such Grantor; (B) any Person that
is treated as a partnership under the Code or (C) any “United States person” (as
defined in Section 7701(a)(30) of the Code);
               (iv) any Investment Property (other than Equity Interests of a
Subsidiary) of any of the Grantors to the extent that applicable law or the
organizational documents or other applicable agreements among the investors of
such Person with respect to any such Investment Property (A) does not permit the
grant of a security interest in such interest or an assignment of such interest
or requires the consent of any third party to permit such grant of a security
interest or assignment or (B) would, following the grant of a security interest
or assignment hereunder, would cause any other Person (other than the Company or
any of its Subsidiaries) to have the right to purchase such Investment Property;
               (v) any real or personal property, the granting of a security
interest in which would be void or illegal under any applicable governmental
law, rule or regulation, or pursuant thereto would result in, or permit the
termination of, such asset;
               (vi) any real or personal property subject to a Permitted Lien
(other than Liens in favor of the Collateral Agent) to the extent that the grant
of other Liens
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8

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on such asset (A) would result in a breach or violation of, or constitute a
default under, the agreement or instrument governing such Permitted Lien,
(B) would result in the loss of use of such asset, (C) would permit the holder
of such Permitted Lien to terminate such Grantor’s use of such asset or
(D) would otherwise result in a loss of material rights of such Grantor in such
asset;
               (vii) any Excluded Accounts;
               (viii) any Excluded Contracts to the extent any third party
consent required to grant a security interest in such rights, contracts,
licenses, leases and other agreements has not been obtained by the applicable
Grantor; provided that any such rights, contracts, licenses, leases and other
agreements shall constitute Collateral and a security interest shall attach
immediately to any such rights, contracts, licenses, leases and other agreements
at the time the applicable Grantor obtains the applicable required consent; or
               (ix) any applications for United States trademark registration
pursuant to IS U.S.L. §1051(b) (i.e., an intent-to-use application), until such
time as such registration is granted or, if earlier, the date of first use of
the trademark, at which point such application or registration shall constitute
Collateral.
     SECTION 2.2. Security for Obligations. This Security Agreement and the
Collateral in which the Collateral Agent for the benefit of the Secured Parties
is granted a security interest hereunder by the Grantors secure the payment and
performance of all of the Obligations.
     SECTION 2.3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, to the extent permitted by applicable law:
          (a) the Grantors will remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and will perform all
of their duties and obligations under such contracts and agreements to the same
extent as if this Security Agreement had not been executed;
          (b) the exercise by the Collateral Agent of any of its rights
hereunder will not release any Grantor from any of its duties or obligations
under any such contracts or agreements included in the Collateral; and
          (c) no Secured Party will have any obligation or liability under any
contracts or agreements included in the Collateral by reason of this Security
Agreement, nor will any Secured Party be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
     SECTION 2.4. Distributions on Pledged Shares. In the event that any
Distribution with respect to any Capital Securities pledged hereunder is
permitted to be paid (in accordance with Section 7.2.6 of the Credit Agreement),
such Distribution or payment may be paid directly to the applicable Grantor. If
any Distribution is made in contravention of Section 7.2.6 of the Credit
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Agreement, such Grantor shall hold the same segregated and for the benefit of
the Collateral Agent until paid to the Collateral Agent in accordance with
Section 4.1.5.
     SECTION 2.5. Security Interest Absolute, etc. To the extent permitted by
applicable law, this Security Agreement shall in all respects be a continuing,
absolute, unconditional and irrevocable grant of security interest, and shall
remain in full force and effect until the Termination Date. To the extent
permitted by applicable law, all rights of the Secured Parties and the security
interests granted to the Collateral Agent (for its benefit and the ratable
benefit of each other Secured Party) hereunder, and all obligations of the
Grantors hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:
          (a) any lack of validity, legality or enforceability of any Loan
Document or other applicable agreement under which such Obligations arise;
          (b) the failure of any Secured Party (i) to assert any claim or demand
or to enforce any right or remedy against the Borrower or any of its
Subsidiaries or any other Person (including any other Grantor) under the
provisions of any Loan Document or other applicable agreement under which such
Obligations arise or otherwise, or (ii) to exercise any right or remedy against
any other guarantor (including any other Grantor) of, or Collateral securing,
any Obligations;
          (c) any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligations;
          (d) any reduction, limitation, impairment or termination of any
Obligations for any reason (other than the occurrence of the Termination Date),
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and each Grantor hereby waives (to the extent permitted
by law) any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations or otherwise;
          (e) any amendment to, rescission, waiver, or other modification of, or
any consent to or departure from, any of the terms of any Loan Document or other
applicable agreement under which such Obligations arise;
          (f) any addition, exchange or release of any Collateral or of any
Person that is (or will become) a Grantor (including the Grantors hereunder) of
the Obligations, or any surrender or non-perfection of any Collateral, or any
amendment to or waiver or release or addition to, or consent to or departure
from, any other guaranty held by any Party securing any of the Obligations; or
          (g) any other circumstance (other than payment or performance of the
Obligations, in each case in full and, with respect to payments, in cash) which
might otherwise constitute a defense available to, or a legal or equitable
discharge of, the Borrower or any of its Subsidiaries, any surety or any
guarantor.
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     SECTION 2.6. Postponement of Subrogation. Each Grantor agrees that it will
not exercise any rights against another Grantor which it may acquire by way of
rights of subrogation under any Loan Document or other applicable agreement
under which such Obligations arise to which it is a party until the Termination
Date. No Grantor shall seek any contribution or reimbursement from the Company
or any of its Subsidiaries, in respect of any payment made under any Loan
Document or other applicable agreement under which such Obligations arise or
otherwise, until following the Termination Date. Any amount paid to such Grantor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and (subject to the terms,
conditions and restrictions of the Intercreditor Agreement) shall immediately be
paid and turned over to the Collateral Agent for the benefit of the Secured
Parties in the exact form received by such Grantor (duly endorsed in favor of
the Collateral Agent, if required), to be credited and applied against the
outstanding Obligations in accordance with Section 6.1; provided that if such
Grantor has made payment to the Parties of all or any part of the Obligations
and the Termination Date has occurred, then upon such Grantor’s notice to the
Collateral Agent of such payment and request, the Collateral Agent (on behalf of
the Secured Parties) will, at the expense of such Grantor, execute and deliver
to such Grantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Grantor of an interest in the Obligations resulting from such payment. In
furtherance of the foregoing, at all times prior to the Termination Date, such
Grantor shall refrain from taking any action or commencing any proceeding
against the Company or any of its Subsidiaries (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in respect of payments made under this Security Agreement to any Secured
Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
     In order to induce the Secured Parties to enter into the Credit Agreement
and make Loans thereunder, after giving effect to the consummation of the IP
Purchase and the Spin-Off, the Grantors represent and warrant to each Secured
Party as set forth below.
     SECTION 3.1. As to Capital Securities of the Subsidiaries, Investment
Property.
          (a) With respect to any direct U.S. Subsidiary of any Grantor that is
               (i) a corporation, business trust, joint stock company or similar
Person, all Capital Securities issued by such Subsidiary is duly authorized and
validly issued, fully paid and non-assessable; and
               (ii) a partnership or limited liability company, no Capital
Securities issued by such Subsidiary (A) is dealt in or traded on securities
exchanges or in securities markets, (B) expressly provides that such Capital
Securities is a security governed by Article 8 of the UCC or (C) is held in a
Securities Account, except, with respect to this clause (a)(ii), Capital
Securities (x) for which the Administrative Agent or the Collateral Agent is the
registered owner or (y) with respect to which the issuer has agreed in an
authenticated record with such
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Grantor and the Collateral Agent (at the written instruction of the
Administrative Agent) to comply with any written instructions of the Collateral
Agent (at the written instruction of the Administrative Agent) without the
consent of such Grantor; provided that the Grantor shall have the right to
provide instructions to such issuer until such issuer receives notice of sole
control from the Collateral Agent (at the written instruction of the
Administrative Agent) during the continuance of an Event of Default; provided
further that upon the cure or waiver of all Events of Default, the Grantor shall
have the right to give instructions to the issuer.
          (b) Subject to Section 7.1.1. of the Credit Agreement, each Grantor
has delivered all Certificated Securities constituting Collateral held by such
Grantor on the Closing Date to the Collateral Agent, together with duly executed
undated blank stock powers, or other equivalent instruments of transfer
reasonably acceptable to the Collateral Agent.
          (c) With respect to Uncertificated Securities constituting Collateral
owned by any Grantor (other than any Capital Securities in a Foreign Subsidiary
which are uncertificated), such Grantor has caused the issuer thereof either to
(i) register the Collateral Agent as the registered owner of such security or
(ii) agree in an authenticated record with such Grantor and the Collateral Agent
that such issuer will comply with instructions with respect to such security
originated by the Collateral Agent without further consent of such Grantor.
          Subject to the permitted update to Schedule I pursuant to
Section 7.1.11 of the Credit Agreement, as of the Closing Date, the percentage
of the issued and outstanding Capital Securities of each Subsidiary pledged by
each Grantor hereunder is as set forth on Schedule I.
         SECTION 3.2. Grantor Name, Location, etc.
          (a) As of the Closing Date, the jurisdiction in which each Grantor is
located for purposes of Sections 9-301 and 9-307 of the UCC is set forth in
Item A of Schedule II.
          (b) As of the Closing Date, each Grantor’s organizational
identification number is set forth in Item B of Schedule II.
          (c) During the four months preceding the date hereof, no Grantor has
been known by any legal name different from the one set forth on the signature
page hereto, nor has such Grantor been the subject of any merger or other
corporate reorganization, except as set forth in Item C of Schedule II hereto.
          (d) As of the Closing Date, each Grantor’s federal taxpayer
identification number is (and, during the four months preceding the date hereof,
such Grantor has not had a federal taxpayer identification number different from
that) set forth in Item D of Schedule II hereto.
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          (e) As of the Closing Date, no Grantor is a party to any federal,
state or local government contract with a value individually in excess of
$2,000,000, except as set forth in Item E of Schedule II hereto.
          (f) As of the Closing Date, no Grantor maintains any Deposit Accounts
(other than Excluded Accounts), Securities Accounts or Commodity Accounts with
any Person, in each case, except as set forth on Item F of Schedule II.
          (g) As of the Closing Date, no Grantor is the beneficiary of any
Letters of Credit, except as set forth on Item G of Schedule II.
          (h) As of the Closing Date, no Grantor has Commercial Tort Claims
(x) in which a suit has been filed by such Grantor and (y) where the amount of
damages reasonably expected to be claimed individually exceeds $2,000,000,
except as set forth on Item H of Schedule II.
          (i) As of the Closing Date, the name set forth on the signature page
attached hereto is the true and correct legal name (as defined in the UCC) of
each Grantor.
          SECTION 3.3. Ownership, No Liens, etc. Each Grantor owns its
Collateral free and clear of any Lien, except for any security interest
(a) created by this Security Agreement and (b) in the case of Collateral other
than Certificated Securities, a Permitted Lien. No effective UCC financing
statement or other filing similar in effect covering all or any part of the
Collateral is on file in any recording office, except those filed in favor of
the Collateral Agent relating to this Security Agreement, Permitted Liens,
filings which have not been authorized by the applicable Grantor or as to which
a duly authorized termination statement relating to such UCC financing statement
or other instrument has been delivered to the Collateral Agent on the Closing
Date.
          SECTION 3.4. Possession of Inventory, Control; etc.
          (a) Each Grantor has, and agrees that it will maintain, exclusive
possession of its Documents, Instruments, Promissory Notes (not otherwise
delivered to the Collateral Agent), Goods, Equipment and Inventory maintained in
the U.S., other than (i) Equipment and Inventory in transit or out for repair or
refurbishing in the ordinary course of business, (ii) Equipment and Inventory
that is in the possession or control of a consignee, warehouseman, bailee agent
or other Person (other than an Affiliate of such Grantor) located in the United
States in the ordinary course of business; provided that, subject to the terms
of the Intercreditor Agreement to the extent the fair market value (as
determined in good faith by an Authorized Officer of the applicable Grantor) in
any U.S. location exceeds $5,000,000 and following notice from the Collateral
Agent (at the request of the Required Lenders) following the occurrence and
during the continuance of an Event of Default such Grantor shall promptly notify
such Persons of the security interest created in favor of the Secured Parties
pursuant to this Security Agreement, and such Grantor shall use commercially
reasonable efforts to cause such party to authenticate a record acknowledging
that it holds possession of such Collateral for the Secured Parties’ benefit and
waives or subordinates any Lien held by it against such Collateral,
(iii) Instruments or Promissory Notes that have been delivered to
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the Collateral Agent pursuant to Section 3.5 or are not otherwise required to be
delivered hereunder and (iv) such other Documents, Instruments, Promissory
Notes, Goods, Equipment and Inventory with a fair market value (as determined in
good faith by an Authorized Officer of the applicable Grantor) of $2,000,000 in
the aggregate. To each Grantor’s knowledge as of the date hereof, in the case of
Equipment or Inventory described in clause (ii) above, no lessor or warehouseman
of any premises or warehouse upon or in which such Equipment or Inventory is
located has (i) issued any warehouse receipt or other receipt in the nature of a
warehouse receipt in respect of any such Equipment or Inventory, (ii) issued any
Document for any such Equipment or Inventory, (iii) received notification of any
Secured Party’s interest (other than the security interest granted hereunder) in
any such Equipment or Inventory or (iv) any Lien on any such Equipment or
Inventory (other than Permitted Liens).
          (b) Each Grantor is the sole entitlement holder of its Accounts and no
other Person (other than the Collateral Agent pursuant to this Security
Agreement or any other Person with respect to Permitted Liens) has control or
possession of, or any other interest in, any of its Accounts or any other
securities or property credited thereto.
     SECTION 3.5. Negotiable Documents, Instruments and Chattel Paper. Each
Grantor has delivered to the Collateral Agent possession of all originals of all
Documents, Instruments, Promissory Notes, and tangible Chattel Paper with an
individual fair market value (as determined in good faith by an Authorized
Officer of the applicable Grantor) of at least $2,000,000 owned or held by the
Grantor on the Closing Date.
     SECTION 3.6. Intellectual Property Collateral.
          (a) In respect of the Intellectual Property Collateral as of the
Closing Date:
               (i) set forth in Item A of Schedule III hereto is a complete and
accurate list of all issued and applied-for U.S. Patents owned by the Grantors
and set forth in Item B of Schedule III hereto is a complete and accurate list
of all Patent Licenses;
               (ii) set forth in Item A of Schedule IV hereto is a complete and
accurate list all registered and applied-for U.S. Trademarks owned by the
Grantors, including those that are registered, or for which an application for
registration has been made, with the United States Patent and Trademark Office
and set forth in Item B of Schedule IV hereto is a complete and accurate list
all Trademark Licenses; and
               (iii) set forth in Item A of Schedule V hereto is a complete and
accurate list of all registered and applied-for U.S. Copyrights owned by the
Grantors, and set forth in Item B of Schedule V hereto is a complete and
accurate list of all Copyright Licenses and a complete and accurate list of all
Copyright Licenses that are exclusive licenses granted to the Grantors in
respect of any Copyright that is registered with the United States Copyright
Office.
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          (b) Except as disclosed on Schedules III through V, in respect of each
Grantor:
               (i) the Owned Intellectual Property Collateral is valid,
subsisting, unexpired and enforceable (except, in any case, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by
principles of equity) and has not been abandoned or adjudged invalid or
unenforceable (except, in any case, as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally and by principles of equity), in whole or in part,
except where the loss or expiration of such Owned Intellectual Property
Collateral would not be expected to have a Material Adverse Effect;
               (ii) such Grantor is the sole and exclusive owner of the entire
and unencumbered right, title and interest in and to the Owned Intellectual
Property Collateral (except for the Permitted Liens) and (A) as of the Closing
Date, no written claim, and (B) following the Closing Date, no written claim
which has a reasonable likelihood of an adverse determination and if adversely
determined against any Grantor would reasonably be expect to have Material
Adverse Effect, in each case has been made that such Grantor is or may be, in
conflict with, infringing, misappropriating, diluting, misusing or otherwise
violating any of the rights of any third party or that challenges the ownership,
use, protectability, registerability, validity, enforceability of any Owned
Intellectual Property Collateral or, to such Grantor’s knowledge, any other
Intellectual Property Collateral and, to such Grantor’s knowledge neither such
Grantor nor the Intellectual Property Collateral conflict with, infringe,
misappropriate or dilute or otherwise violate the rights of any third party;
               (iii) such Grantor has made all necessary filings and
recordations to protect its interest in any Owned Intellectual Property
Collateral that is material to the operations or business of such Grantor,
including recordations of all of its interests in the Patent Collateral, the
Trademark Collateral and the Copyright Collateral in the United States Patent
and Trademark Office, the United States Copyright Office and any patent,
trademark or copyright office anywhere in the world, as appropriate, and has
used proper statutory notice, as applicable, in connection with its use of any
Patent, Trademark or Copyright;
               (iv) such Grantor has taken all commercially reasonable steps to
safeguard its Trade Secrets and to its knowledge (A) none of the Trade Secrets
of such Grantor has been used, divulged, disclosed or appropriated for the
benefit of any other Person other than such Grantor which could reasonably be
expected to result in a Material Adverse Effect; (B) no employee, independent
contractor or agent of such Grantor has misappropriated any Trade Secrets of any
other Person in the course of the performance of his or her duties as an
employee, independent contractor or agent of such Grantor which could reasonably
be expected to result in a Material Adverse Effect; and (C) no employee,
independent contractor or
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agent of such Grantor is in default or breach of any term of any employment
agreement, non-disclosure agreement, assignment of inventions agreement or
similar agreement or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor’s Intellectual Property Collateral
which could reasonably be expected to result in a Material Adverse Effect;
               (v) no action by such Grantor is currently pending or threatened
in writing which asserts that any third party is infringing, misappropriating,
diluting, misusing or voiding any Owned Intellectual Property Collateral and, to
such Grantor’s knowledge, no third party is infringing upon, misappropriating,
diluting, misusing or voiding any Intellectual Property owned or used by such
Grantor in any material respect, or any of its respective licensees, in each
case except as would not have a Material Adverse Effect;
               (vi) no settlement or consents, covenants not to sue,
nonassertion assurances, or releases have been entered into by such Grantor or
to which such Grantor is bound that adversely affects its rights to own or use
any material Intellectual Property Collateral;
               (vii) except for the Permitted Liens, such Grantor has not made a
previous assignment, sale, transfer or agreement constituting a present or
future assignment, sale or transfer of any Intellectual Property Collateral for
purposes of granting a security interest or as collateral that has not been
terminated or released;
               (viii) such Grantor has executed and delivered to the Collateral
Agent, Intellectual Property Collateral security agreements for all Copyrights,
Patents and Trademarks owned by such Grantor that constitute Collateral,
including all Copyrights, Patents and Trademarks on Schedules III, IV or V (as
such schedules may be amended or supplemented from time to time);
               (ix) such Grantor uses adequate standards of quality in the
manufacture, distribution, and sale of all products sold and in the provision of
all services rendered under or in connection with any Trademarks and has taken
all commercially reasonable action necessary to ensure that all licensees of any
Trademarks owned by such Grantor use such adequate standards of quality, in each
case except as would not have a Material Adverse Effect;
               (x) the consummation of the transactions contemplated by the
Credit Agreement and this Security Agreement will not result in the termination
or material impairment of any of the Intellectual Property Collateral necessary
for the conduct of such Grantor’s business;
               (xi) all employees, independent contractors and agents who have
contributed to the creation or development of any Owned Intellectual Property
Collateral have been a party to an enforceable assignment agreement with such
Grantor in accordance with applicable laws, according and granting exclusive
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ownership of such Owned Intellectual Property Collateral to such Grantor, in
each case except as could not reasonably be expected to have a Material Adverse
Effect; and
      (xii) such Grantor owns directly or is entitled to use by license or
otherwise, all Intellectual Property Collateral with respect to any of the
foregoing reasonably necessary for such Grantor’s business, in each case except
as could not reasonably be expected to have a Material Adverse Effect.
Notwithstanding anything contained herein to the contrary, it is understood and
agreed that (A) after the consummation of the IP Purchase, the Grantors shall be
the owners of all the rights, title and interests in, to and under the
Intellectual Property Collateral and (B) the Grantors’ interests in such
Intellectual Property Collateral will not be recorded at the applicable filing
offices as of the Closing Date, but shall be filed in such filing offices no
later than five Business Days following the Closing Date.
     SECTION 3.7. Validity, etc.
          (a) This Security Agreement creates a valid security interest in the
Collateral securing the payment of the Obligations.
          (b) Each Grantor has filed or caused to be filed all UCC-1 financing
statements listing the Collateral Agent as “Secured Party” in the filing office
for each Grantor’s jurisdiction of organization listed in Item A of Schedule II
(collectively, the “Filing Statements”) (or has authorized the Administrative
Agent to file the Filing Statements suitable for timely and proper filing in
such offices) and has taken all other:
               (i) actions necessary to obtain control of the Collateral (to the
extent required herein or in the Credit Agreement) as provided in
Sections 9-104, 9-105, 9-106 and 9-107 of the UCC; and
               (ii) actions necessary to perfect the Collateral Agent’s security
interest with respect to any Collateral with a fair market value (as determined
in good faith by an Authorized Officer of the applicable Grantor) individually
valued in excess of $75,000 evidenced by a Certificate of Title.
          (c) Upon the filing of the Filing Statements with the appropriate
agencies therefor the security interests created under this Security Agreement
shall constitute a perfected security interest in the Collateral described on
such Filing Statements in favor of the Collateral Agent on behalf of the Secured
Parties to the extent that a security interest therein may be perfected by
filing pursuant to the relevant UCC, prior to all other Liens, except for
Permitted Liens.
     SECTION 3.8. Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or any
other third party is required either
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          (a) for the grant by the Grantors of the security interest granted
hereby or for the execution, delivery and performance of this Security Agreement
by the Grantors;
          (b) for the perfection or maintenance of the security interests
hereunder including the Second-Priority nature of such security interest to the
extent each Grantor is required to perfect a security interest hereunder in such
Collateral (except with respect to the Filing Statements or, with respect to
Owned Intellectual Property Collateral, the recordation of any agreements with
the United States Patent and Trademark Office or the United States Copyright
Office) or the exercise by the Collateral Agent of its rights and remedies
hereunder; or
          (c) for the exercise by the Collateral Agent of the voting or other
rights provided for in this Security Agreement, or, except (i) with respect to
any securities issued by a Subsidiary of the Grantors, as may be required in
connection with a disposition of such securities by laws affecting the offering
and sale of securities generally, the remedies in respect of the Collateral
pursuant to this Security Agreement, (ii) any “change of control” or similar
filings required by state licensing agencies and (iii) with respect to any
interest in a limited liability company, as may be required to become a member
and/or vote such interest.
          SECTION 3.9. Best Interests. It is in the best interests of each
Grantor (other than the Borrower) to execute this Security Agreement inasmuch as
such Grantor will, as a result of being an Affiliate of the Borrower, derive
substantial direct and indirect benefits from the Loans made from time to time
to the Borrower by the Lenders pursuant to the Credit Agreement, and each
Grantor acknowledges that the Secured Parties are relying on this representation
in agreeing to make such Loans pursuant to the Credit Agreement to the Borrower.
ARTICLE IV
COVENANTS
         Each Grantor covenants and agrees that, until the Termination Date,
such Grantor will perform, comply with and be bound by the obligations set forth
below.
         SECTION 4.1. As to Investment Property, etc.
         SECTION 4.1.1. Capital Securities of Subsidiaries. No Grantor will
allow any of its U.S. Subsidiaries:
          (a) that is a corporation, business trust, joint stock company or
similar Person, after the date hereof to issue Uncertificated Securities;
          (b) that is a partnership or limited liability company, to (i) issue
Capital Securities that are to be dealt in or traded on securities exchanges or
in securities markets, (ii) expressly provide in its Organic Documents that its
Capital Securities are securities governed by Article 8 of the UCC unless such
Capital Securities have been delivered to the Collateral Agent on the Closing
Date or, to the extent such Organic Documents are modified to provide that such
Capital Securities are securities governed by Article 8 of the UCC such Capital
Securities, together with duly executed undated blank instruments
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of transfer reasonably acceptable to the Collateral Agent, are delivered to the
Collateral Agent on or prior to the date of such modification, or (iii) subject
to the terms of the Intercreditor Agreement, place such Subsidiary’s Capital
Securities in a Securities Account unless such Securities Account is subject to
a Control Agreement; and
          (c) to issue Capital Securities in addition to or in substitution for
the Capital Securities pledged hereunder, except to such Grantor (and such
Capital Securities are immediately pledged and delivered to the Collateral Agent
pursuant to the terms of this Security Agreement).
     SECTION 4.1.2. Investment Property (other than Certificated Securities).
          (a) Other than Excluded Accounts, with respect to any Deposit
Accounts, Securities Accounts, Commodity Accounts, Commodity Contracts or
Security Entitlements constituting Investment Property owned or held by any
Grantor with an intermediary who is not a Secured Party, such Grantor will, upon
notice from the Collateral Agent (at the request of the Required Lenders), and
subject to the terms, conditions and provisions of the Intercreditor Agreement,
following the occurrence and during the continuance of an Event of Default, take
commercially reasonable efforts to cause the intermediary maintaining such
Investment Property to execute a Control Agreement relating to such Investment
Property pursuant to which such intermediary agrees to comply with the
Collateral Agent’s instructions with respect to such Investment Property upon
the Collateral Agent’s notice of sole control following the occurrence and
during the continuance of an Event of Default; provided that the Administrative
Agent agrees to instruct the Collateral Agent to promptly rescind such notice
upon the cure or waiver of all Events of Default.
          (b) Subject to the terms, conditions and provisions of the
Intercreditor Agreement, with respect to any Uncertificated Securities (other
than Uncertificated Securities credited to a Securities Account and any Capital
Securities in a Foreign Subsidiary which are uncertificated) constituting
Investment Property owned or held by any Grantor, such Grantor will take
commercially reasonable efforts to cause the issuer of such securities to either
(i) register the Collateral Agent as the registered owner thereof on the books
and records of the issuer or (ii) execute a Control Agreement relating to such
Investment Property pursuant to which the issuer agrees to comply with the
Collateral Agent’s instructions with respect to such Uncertificated Securities
upon notice of sole control following the occurrence and during the continuance
of an Event of Default; provided that the Administrative Agent agrees to
instruct the Collateral Agent to promptly rescind such notice upon the cure or
waiver of all Events of Default.
     SECTION 4.1.3. Certificated Securities (Stock Powers). Subject to
Section 7.1.11 of the Credit Agreement and applicable local law regarding the
retention of certificates representing Equity Interests in the appropriate
jurisdiction, each Grantor agrees that all Certificated Securities, including
the Capital Securities delivered by such Grantor pursuant to this Security
Agreement, will be accompanied by duly executed undated blank stock powers, or
other equivalent instruments of transfer reasonably acceptable to the Collateral
Agent.
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     SECTION 4.1.4. Continuous Pledge. Subject to Section 7.1.11 of the Credit
Agreement and applicable local law regarding the retention of certificates
representing Equity Interests in the appropriate jurisdiction, each Grantor will
(subject to the terms of the Intercreditor Agreement and the requirements
hereunder) deliver to the Collateral Agent and at all times keep pledged to the
Collateral Agent pursuant hereto, on a Second-Priority, or at all times after
the First Lien Termination Date, a first-priority, perfected basis (subject to
Permitted Liens), in each case in accordance with all applicable U.S. laws, all
Investment Property, all Dividends and Distributions with respect thereto, all
Payment Intangibles to the extent they are evidenced by a Document, Instrument,
Promissory Note or Chattel Paper, and all interest and principal with respect to
such Payment Intangibles, and all Proceeds and rights from time to time received
by or distributable to such Grantor in respect of any of the foregoing, in each
case to the extent such asset constitutes Collateral. Subject to the terms,
conditions and provisions of the Intercreditor Agreement, each Grantor agrees
that it will, promptly following receipt thereof, deliver to the Collateral
Agent possession of all originals of negotiable Documents, Instruments,
Promissory Notes and Chattel Paper that it acquires following the Closing Date
to the extent otherwise required hereunder.
     SECTION 4.1.5. Voting Rights; Dividends, etc. Subject to the terms,
conditions and provisions of the Intercreditor Agreement, each Grantor agrees
promptly upon receipt of notice from the Administrative Agent of the
Administrative Agent’s or Collateral Agent’s intent to seek remedies under this
Section 4.1.5 after the occurrence and continuance of a Specified Default:
          (a) so long as such Specified Default shall continue, to deliver
(properly endorsed where required hereby or requested by the Administrative
Agent) to the Collateral Agent all Dividends and Distributions with respect to
Investment Property constituting Collateral, all interest, principal, other cash
payments on Payment Intangibles, and all Proceeds of the Collateral, in each
case thereafter received by such Grantor, all of which shall be held by the
Collateral Agent as additional Collateral; and
          (b) with respect to Collateral consisting of general partner interests
or limited liability company interests, upon the occurrence and continuance of a
Specified Default and so long as the Collateral Agent has notified such Grantor
of the Collateral Agent’s intention to exercise its voting power (pursuant to
the written direction of the Administrative Agent) under this clause,
               (i) that the Collateral Agent may exercise (to the exclusion of
such Grantor) the voting power and all other incidental rights of ownership with
respect to any Investment Property constituting Collateral and such Grantor
hereby grants the Collateral Agent an irrevocable proxy, exercisable under such
circumstances, to vote such Investment Property; and
               (ii) to promptly deliver to the Collateral Agent such additional
proxies and other documents as may be necessary to allow the Collateral Agent to
exercise such voting power.
Subject to the terms, conditions and provisions of the Intercreditor Agreement,
all dividends, Distributions, interest, principal, cash payments, Payment
Intangibles and Proceeds that may at
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any time and from time to time be held by such Grantor, but which such Grantor
is then obligated to deliver to the Collateral Agent, shall, until delivery to
the Collateral Agent, be held by such Grantor separate and apart from its other
property for the benefit of the Collateral Agent. Subject to the terms,
conditions and provisions of the Intercreditor Agreement, the Collateral Agent
agrees that unless a Specified Default shall have occurred and be continuing and
the Collateral Agent shall have given the notice referred to in clause (b), such
Grantor will have the exclusive voting power with respect to any Investment
Property constituting Collateral and the Collateral Agent will, upon the written
request of such Grantor, promptly deliver such proxies and other documents, if
any, as shall be reasonably requested by such Grantor which are necessary to
allow such Grantor to exercise that voting power; provided that no vote shall be
cast, or consent, waiver, or ratification given, or action taken by such Grantor
that would impair any such Collateral (except to the extent expressly permitted
by the Credit Agreement) or be inconsistent with or violate any provision of any
Loan Document. After any and all Events of Default have been cured or waived,
(i) each Grantor shall have the right to exercise the voting, managerial and
other consensual rights and powers that it would otherwise be entitled to
pursuant to this Section 4.1.5 and receive the payments, proceeds, dividends,
distributions, monies, compensation, property, assets, instruments or rights
which it would be authorized to receive and retain pursuant to this
Section 4.1.5 and (ii) within ten Business Days after notice of such cure or
waiver, the Collateral Agent shall repay and deliver to each Grantor all cash
and monies that such Grantor is entitled to retain pursuant to this
Section 4.1.5 which was not applied in repayment of the Obligations.
     SECTION 4.2. Change of Name, etc. No Grantor will change its legal name,
place of incorporation or organization, federal taxpayer identification number
or organizational identification number except upon 15 days’ prior written
notice to the Collateral Agent.
     SECTION 4.3. As to Accounts.
          (a) Each Grantor shall have the right to collect all Accounts so long
as (i) no Specified Default shall have occurred and be continuing and
(ii) notice pursuant to clause (b) has not been delivered.
          (b) Subject to the terms, conditions and provisions of the
Intercreditor Agreement, upon (i) the occurrence and continuance of a Specified
Default and (ii) the delivery of notice by the Collateral Agent (at the
direction of the Administrative Agent) to each Grantor, all Proceeds of
Collateral received by such Grantor shall be delivered in kind to the Collateral
Agent for deposit in a Deposit Account of such Grantor maintained with the
Collateral Agent (together with any other Accounts pursuant to which any portion
of the Collateral is deposited with the Collateral Agent, the “Collateral
Accounts”), and such Grantor shall not commingle any such Proceeds, and shall
hold separate and apart from all other property, all such Proceeds for the
benefit of the Collateral Agent until delivery thereof is made to the Collateral
Agent.
          (c) Following the delivery of notice pursuant to clause (b)(ii) and
subject to the terms, conditions and provisions of the Intercreditor Agreement,
the Collateral Agent shall apply any amount in the Collateral Account in
accordance with Section 4.7 of the Credit Agreement.
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          (d) With respect to each of the Collateral Accounts, it is hereby
confirmed and agreed that (i) deposits in such Collateral Account are subject to
a security interest as contemplated hereby, (ii) such Collateral Account shall
be under the control of the Collateral Agent and (iii) the Collateral Agent
shall have the sole right of withdrawal over such Collateral Account.
          SECTION 4.4. As to Grantors Use of Collateral.
          (a) Subject to clause (b), each Grantor (i) may in the ordinary course
of its business, at its own expense, subject to Section 7.2.11 of the Credit
Agreement, dispose of and use any Collateral, (ii) subject to the applicable
terms of the Credit Agreement, will, at its own expense, endeavor to collect, as
and when due, all amounts due with respect to any of the Collateral, subject to
the terms, conditions and provisions of the Intercreditor Agreement, including
the taking of such action with respect to such collection as the Collateral
Agent may reasonably request following the occurrence and continuance of a
Specified Default or, in the absence of such request, as such Grantor may deem
advisable, and (iii) may grant, in the ordinary course of business, to any party
obligated on any of the Collateral, any rebate, refund, set off or allowance to
which such party may be lawfully entitled or which may lawfully be allowed by
such Grantor.
          (b) At any time following the occurrence and during the continuance of
a Specified Default, whether before or after the maturity of any of the
Obligations, the Collateral Agent may (subject to the terms, conditions and
provisions of the Intercreditor Agreement), acting at the direction of the
Required Lenders, (i) revoke any or all of the rights of each Grantor set forth
in clause (a), (ii) with two Business Days prior notice to the applicable
Grantor, notify any parties obligated on any of the Collateral to make payment
to the Collateral Agent of any amounts due or to become due thereunder and
(iii) with two Business Days prior notice to the applicable Grantor, enforce
collection of any of the Collateral by suit or otherwise and surrender, release,
or exchange all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby.
          (c) Subject to the terms, conditions and provisions of the
Intercreditor Agreement, upon the reasonable request of the Administrative Agent
following the occurrence and during the continuance of a Specified Default, each
Grantor will, at its own expense, promptly notify any parties obligated on any
of the Collateral to make payment to the Collateral Agent of any amounts due or
to become due thereunder.
          (d) Subject to the terms, conditions and provisions of the
Intercreditor Agreement, at any time following the occurrence and during the
continuation of a Specified Default, the Collateral Agent may endorse, in the
name of such Grantor, any item, howsoever received by the Collateral Agent,
representing any payment on or other Proceeds of any of the Collateral.
          SECTION 4.5. As to Intellectual Property Collateral. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual
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Property Collateral (except for the tangible components of the Computer Hardware
and Software Collateral) material to the operations or business of such Grantor:
          (a) such Grantor will not, and will not knowingly permit any third
party or licensee to, (i) do or permit any act or knowingly omit to do any act
whereby any of the Patent Collateral may lapse or become abandoned or dedicated
to the public or unenforceable except upon expiration of the end of an
unrenewable term of a registration thereof or as otherwise permitted by the
Credit Agreement, (ii) fail to maintain as in the past the quality of products
and services offered under the Trademark Collateral, (iii) fail to employ the
Trademark Collateral registered with any federal or state or foreign authority
with an appropriate notice of such registration, (iv) do or permit any act or
knowingly omit to do any act whereby any of the Trademark Collateral may lapse
or become invalid or unenforceable, or (v) do or permit any act or knowingly
omit to do any act whereby any of the Copyright Collateral or any of the Trade
Secrets Collateral may lapse or become invalid or unenforceable or placed in the
public domain except upon expiration of the end of an unrenewable term of a
registration thereof, unless, in the case of any of the foregoing requirements
in clauses (i) through (v), (x) such Grantor shall reasonably and in good faith
determine that any of such Intellectual Property Collateral is of negligible
economic value to such Grantor or (y) the loss of such Intellectual Property
Collateral would not have a Material Adverse Effect;
          (b) such Grantor shall not permit any third party or licensee to adopt
or use any other Trademark which is confusingly similar or a colorable imitation
of any of the Trademark Collateral unless, (x) such Grantor shall reasonably and
in good faith determine that any of such Intellectual Property Collateral is of
negligible economic value to such Grantor or (y) the loss of such Intellectual
Property Collateral would not have a Material Adverse Effect;
          (c) unless otherwise permitted by the Credit Agreement, such Grantor
shall promptly notify the Collateral Agent if it knows that any application or
registration relating to any material item of the Intellectual Property
Collateral (except for the tangible components of the Computer Hardware and
Software Collateral) has a reasonable likelihood of becoming abandoned or
dedicated to the public or placed in the public domain or invalid or
unenforceable, or of any adverse determination (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office) regarding such
Grantor’s ownership of any Intellectual Property Collateral, its right to
register the same or to keep and maintain and enforce the same;
          (d) concurrently with the delivery of a Compliance Certificate
pursuant to clause (c) of Section 7.1.1 of the Credit Agreement, each Grantor
that has, since the date the Compliance Certificate was last delivered,
(i) filed an application for the registration of any Patent or Trademark with
the United States Patent and Trademark Office or (ii) received, as owner or
exclusive licensee, a Copyright registration with the United States Copyright,
in each case to the extent such Intellectual Property constitutes Collateral,
shall inform the Administrative Agent, and upon request of the Administrative
Agent, promptly execute and deliver an Intellectual Property Security Agreement
substantially in
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the form set forth as Exhibits A, B and C hereto and other documents as the
Administrative Agent may reasonably request to evidence the Collateral Agent’s
security interest in such Intellectual Property Collateral;
          (e) such Grantor will take all commercially reasonable steps,
including in any proceeding before the United States Patent and Trademark Office
the United States Copyright Office, to maintain and pursue any application (and
to obtain the relevant registration) filed with respect to, and to maintain any
registration of, the Owned Intellectual Property Collateral, including the
filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings and
the payment of fees and taxes (except to the extent that dedication, abandonment
or invalidation is permitted under the Credit Agreement or under the foregoing
clause (a) or (b)); and
          (f) concurrently with the delivery of a Compliance Certificate
pursuant to clause (c) of Section 7.1.1 of the Credit Agreement, each Grantor
that has obtained, since the date the Compliance Certificate was last delivered,
an ownership interest in any Patent, Copyright or Trademark, in each case to the
extent such Intellectual Property constitutes Collateral, shall execute and
deliver to the Collateral Agent a Patent Security Agreement, Copyright Security
Agreement or a Trademark Security Agreement in the form of Exhibit A, Exhibit B
or Exhibit C, as applicable, and in each case such Grantor shall execute and
deliver to the Collateral Agent any other document required to acknowledge or
register, record or perfect the Collateral Agent’s security interest in any part
of such item of Intellectual Property unless such Grantor shall otherwise
determine in good faith using its commercially reasonable business judgment that
any such Intellectual Property is not material.
          SECTION 4.6. As to Letter-of-Credit Rights.
          (a) Each Grantor, by granting a security interest in its
Letter-of-Credit Rights to the Collateral Agent, intends to (and hereby does)
collaterally assign to the Collateral Agent, subject to the terms, conditions
and provisions of the Intercreditor Agreement, its rights (including its
contingent rights ) to the Proceeds of all individual Letter-of-Credit Rights in
excess of $2,000,000 of which it is or hereafter becomes a beneficiary or
assignee. Such Grantor will promptly use its commercially reasonable efforts to
cause the issuer of each such Letter of Credit and each nominated person (if
any) with respect thereto to consent to such assignment of the Proceeds thereof
in a consent agreement in form and substance reasonably satisfactory to the
Collateral Agent and deliver written evidence of such consent to the Collateral
Agent.
          (b) Upon the occurrence and during the continuance of a Specified
Default, such Grantor will, subject to the terms, conditions and provisions of
the Intercreditor Agreement, promptly upon request by the Administrative Agent,
(i) notify (and such Grantor hereby authorizes the Administrative Agent to
notify) the issuer and each nominated person with respect to each of the Letters
of Credit that the Proceeds thereof have been assigned to the Collateral Agent
hereunder and any payments due or to become due in respect thereof are to be
made directly to the Collateral Agent and (ii) use
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commercially reasonable effort to arrange for the Collateral Agent to become the
transferee beneficiary Letter of Credit.
     SECTION 4.7. As to Commercial Tort Claims. Each Grantor covenants and
agrees that, until the occurrence of the Termination Date, with respect to any
Commercial Tort Claim in excess of $2,000,000 individually hereafter arising, it
shall promptly deliver to the Collateral Agent a revised Item H of Schedule II
identifying such new Commercial Tort Claims.
     SECTION 4.8. Electronic Chattel Paper and Transferable Records. If any
Grantor at any time holds or acquires an interest in any electronic chattel
paper or any “transferable record,” as that term is defined in Section 201 of
the U.S. Federal Electronic Signatures in Global and National Commerce Act, or
in Section 16 of the U.S. Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, with a value in excess of $2,000,000, such Grantor
shall promptly notify the Administrative Agent thereof and, at the reasonable
request of the Administrative Agent, shall take such action as the
Administrative Agent may request to vest in the Collateral Agent control under
Section 9-105 of the UCC of such electronic chattel paper or control under
Section 201 of the Federal Electronic Signatures in Global and National Commerce
Act or, as the case may be, Section 16 of the Uniform Electronic Transactions
Act, as so in effect in such jurisdiction, of such transferable record. The
Collateral Agent agrees with such Grantor that the Collateral Agent will allow,
pursuant to procedures reasonably satisfactory to the Collateral Agent and so
long as such procedures will not result in the Collateral Agent’s loss of
control, the Grantor to make alterations to the electronic chattel paper or
transferable record permitted under Section 9-105 of the UCC or, as the case may
be, Section 201 of the U.S. Federal Electronic Signatures in Global and National
Commerce Act or Section 16 of the U.S. Uniform Electronic Transactions Act for a
party in control to allow without loss of control, unless an Event of Default
has occurred and is continuing or would occur after taking into account any
action by such Grantor with respect to such electronic chattel paper or
transferable record.
     SECTION 4.9. Further Assurances, etc. Subject to the terms, conditions and
restrictions of the Intercreditor Agreement, each Grantor agrees that, from time
to time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that is necessary, in
order to perfect, preserve and protect any security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, such Grantor will (subject to
terms, conditions and restrictions in the Intercreditor Agreement):
          (a) from time to time upon the reasonable request of the
Administrative Agent or the Collateral Agent, (i) promptly deliver to the
Collateral Agent such stock powers, instruments and similar documents,
reasonably satisfactory in form and substance to the Administrative Agent, with
respect to such Collateral as the Administrative Agent may request and
(ii) after the occurrence and during the continuance of any Specified Default,
transfer any securities constituting Collateral into the name of any nominee
designated by the Collateral Agent; if any Collateral shall be evidenced by an
Instrument, negotiable Document, Promissory Note or tangible Chattel Paper and
such Collateral, individually, has a fair market value (as determined in good
faith by an Authorized Officer of the
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applicable Grantor) in excess of $2,000,000, promptly deliver and pledge to the
Collateral Agent hereunder such Instrument, negotiable Document, Promissory Note
or tangible Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Collateral Agent;
          (b) file (and hereby authorize the Administrative Agent to file) such
Filing Statements or continuation statements, or amendments thereto, and such
other instruments or notices (including any assignment of claim form under or
pursuant to the federal assignment of claims statute, 31 U.S.C. § 3726, any
successor or amended version thereof or any regulation promulgated under or
pursuant to any version thereof), as shall be necessary that the Administrative
Agent may reasonably request in order to perfect and preserve the security
interests and other rights granted or purported to be granted to the Collateral
Agent hereby;
          (c) promptly deliver to the Collateral Agent and at all times keep
pledged to the Collateral Agent pursuant hereto, on a Second-Priority, or at all
times after the First Lien Termination Date, a first-priority, perfected basis
(subject to Permitted Liens), at the request of the Administrative Agent, all
Investment Property constituting Collateral, all Dividends and Distributions
with respect thereto, and all interest and principal with respect to Promissory
Notes, and all Proceeds and rights from time to time received by or
distributable to such Grantor in respect of any of the foregoing Collateral;
          (d) not take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of the
maker of any Payment Intangible or other Instrument constituting Collateral,
except as provided in Section 4.4 or in the Credit Agreement;
          (e) upon the reasonable request of the Administrative Agent, place a
legend reasonably acceptable to the Administrative Agent indicating that the
Collateral Agent has a security interest in any tangible Chattel Paper;
          (f) furnish to the Collateral Agent, from time to time at the
Administrative Agent’s reasonable request, statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail; and
          (g) comply with the reasonable requests of the Collateral Agent and
the Administrative Agent in accordance with this Security Agreement in order to
enable the Collateral Agent to have and maintain control over the Collateral
consisting of Investment Property, Deposit Accounts, Letter-of-Credit-Rights and
Electronic Chattel Paper to the extent required herein.
With respect to the foregoing and the grant of the security interest hereunder,
each Grantor hereby authorizes the Administrative Agent or Collateral Agent to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral; and to make all relevant filings
with the United States Patent and Trademark Office and the United
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States Copyright Office in respect of the Intellectual Property Collateral, in
each case naming the Collateral Agent as “Secured Party” (or other similar
term). Each Grantor agrees that a carbon, photographic or other reproduction of
this Security Agreement or any UCC financing statement covering the Collateral
or any part thereof shall be sufficient as a UCC financing statement where
permitted by law. Each Grantor hereby authorizes the Administrative Agent to
file financing statements describing as the collateral covered thereby “all of
the debtor’s personal property or assets”, “all assets”, “all personal property”
or words to that effect, notwithstanding that such wording may be broader in
scope than the Collateral described in this Security Agreement.
     SECTION 4.10. Deposit Accounts. Promptly following the occurrence and
during the continuance of a Specified Default, at the request of the Collateral
Agent (at the direction of the Administrative Agent), such Grantor will maintain
all of its Deposit Accounts only with the Collateral Agent or with any
depositary institution that has entered into a Control Agreement in favor of the
Collateral Agent. Subject to the terms, conditions and restrictions in the
Intercreditor Agreement, such Control Agreements shall permit the Collateral
Agent (at the written instructions of the Administrative Agent) to deliver a
notice of sole exclusive control during the continuance of an Event of Default.
Subject to the terms, conditions and restrictions in the Intercreditor
Agreement, to the extent the Collateral Agent (at the written instructions of
the Administrative Agent) has delivered a notice of sole control with respect to
any such Deposit Accounts pursuant to a Control Agreement, the Administrative
Agent agrees promptly to notify (no later than 2 Business Days) all such
depository banks that the notice of exclusive control has been rescinded and the
applicable Grantor shall have the right to withdraw funds from such Deposit
Account(s) following the cure or waiver of all Specified Defaults.
ARTICLE V
THE COLLATERAL AGENT
     SECTION 5.1. Collateral Agent Appointed Attorney-in-Fact. Until the
Termination Date, each Grantor hereby irrevocably appoints the Collateral Agent
as its attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, from time to time as
directed by the Administrative Agent, following the occurrence and during the
continuance of a Specified Default, to take any action and to execute any
instrument which is necessary to accomplish the purposes of this Security
Agreement, in each case subject to the terms, conditions and provisions of the
Intercreditor Agreement, including:
               (a) with two Business Days prior notice to the applicable
Grantor, to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;
               (b) to receive, endorse, and collect any drafts or other
Instruments, Documents and Chattel Paper, in connection with clause (a) above;
               (c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable for
the collection of
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                  any of the Collateral or otherwise to enforce the rights of
the Collateral Agent with respect to any of the Collateral; and
               (d) to perform the affirmative obligations of such Grantor
hereunder.
Each Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
     SECTION 5.2. Collateral Agent May Perform. If any Grantor fails to perform
any agreement contained herein and the Administrative Agent provides prior
notice to such Grantor of such failure, within three days of such notice, the
Grantor shall perform, cause to be performed or agree to perform (and thereafter
actually perform within seven days after such notice) such agreement, the
Collateral Agent may (but shall have not obligation to) itself perform, or cause
performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor pursuant to
Section 10.3 of the Credit Agreement.
     SECTION 5.3. Collateral Agent Has No Duty. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession, the accounting for moneys actually received by it hereunder and,
except to the extent of the gross negligence, bad faith or willful misconduct of
the Collateral Agent or any of its respective officers, directors, employees or
agents, the Collateral Agent shall have no duty as to any Collateral or
responsibility for
               (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Investment Property, whether or not the Collateral Agent has or is deemed to
have knowledge of such matters, or
               (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
     SECTION 5.4. Reasonable Care. The Collateral Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided that the Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral, if
(i) such Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property or (ii) it takes such action for that
purpose as each Grantor reasonably requests in writing at times other than upon
the occurrence and during the continuance of any Specified Default, but failure
of the Collateral Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
     SECTION 5.5. Liability.
          (a) No provision of this Security Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or
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powers and the Collateral Agent shall not be liable or responsible for any loss
or diminution in the value of any of the Collateral.
          (b) In no event shall the Collateral Agent be responsible or liable
for special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Collateral Agent has been advised of the likelihood of such loss or damage and
regardless of the form of action.
     SECTION 5.6. Force Majeure. In no event shall the Collateral Agent be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Collateral Agent shall use reasonable
efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.
ARTICLE VI
REMEDIES
     SECTION 6.1. Certain Remedies. If any Specified Default shall have occurred
and be continuing and the Administrative Agent shall have given written notice
to the relevant Grantor of the Collateral Agent’s intent to exercise its
corresponding rights pursuant to this Section:
          (a) The Collateral Agent (subject to the terms, conditions and
provisions of the Intercreditor Agreement) may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a Secured Party on
default under the UCC (whether or not the UCC applies to the affected
Collateral) and also may (subject to the Intercreditor Agreement) to the extent
permitted by applicable law:
               (i) take possession of any Collateral not already in its
possession without demand and without legal process;
               (ii) require each Grantor to, and each Grantor hereby agrees that
it will, at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place to be designated by the
Collateral Agent that is reasonably convenient to both parties;
               (iii) enter onto the property where any Collateral is located and
take possession thereof without demand and without legal process; and
               (iv) without notice except as specified below and to the extent
permitted by applicable law, lease, or license, sell or otherwise dispose of the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or
for future delivery,
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and upon such other terms as the Collateral Agent, at the direction of the
Administrative Agent, may deem commercially reasonable. Each Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten days’
prior notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
          (b) Subject to the terms, conditions and provisions of the
Intercreditor Agreement, all cash Proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral shall be applied by the Collateral Agent in accordance
with Section 4.7 of the Credit Agreement.
          (c) The Collateral Agent may (subject to the terms, conditions and
provisions of the Intercreditor Agreement)
               (i) transfer all or any part of the Collateral into the name of
the Collateral Agent or its nominee, with or without disclosing that such
Collateral is subject to the Lien hereunder;
               (ii) with two Business Days prior notice to the applicable
Grantor, notify the parties obligated on any of the Collateral to make payment
to the Collateral Agent of any amount due or to become due thereunder;
               (iii) withdraw, or cause or direct the withdrawal, of all funds
with respect to the Collateral Account to repay the Obligations or otherwise
apply such funds in accordance with Section 4.7 of the Credit Agreement;
               (iv) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto;
               (v) endorse any checks, drafts, or other writings in any
Grantor’s name to allow collection of the Collateral;
               (vi) take control of any Proceeds of the Collateral; and
               (vii) execute (in the name, place and stead of any Grantor)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral;
          (d) Without limiting the foregoing, in respect of the Intellectual
Property Collateral:
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               (i) upon the request of the Administrative Agent, such Grantor
shall execute and deliver to the Collateral Agent an assignment or assignments
of the Intellectual Property Collateral, subject (in the case of any licenses
thereunder) to any valid and enforceable requirements to obtain consents from
any third parties, and such other documents as are necessary or appropriate to
carry out the intent and purposes hereof;
               (ii) the Administrative Agent shall have the right, in its sole
discretion, (which right shall take precedence over any right or action of any
Grantor) to file applications and maintain registrations for the protection of
the Intellectual Property Collateral and/or bring suit in the name of such
Grantor, the Collateral Agent or any Secured Party to enforce the Intellectual
Property Collateral and any licenses thereunder and, upon the request of the
Administrative Agent, such Grantor shall use all commercially reasonable efforts
to assist with such filing or enforcement (including the execution of relevant
documents); and
               (iii) in the event that the Collateral Agent elects not to make
any filing or bring any suit as set forth in clause (ii), such Grantor shall,
upon the request of Collateral Agent, use all commercially reasonable efforts,
whether through making appropriate filings or bringing suit or otherwise, to
protect, enforce and prevent the infringement, misappropriation, dilution,
unauthorized use or other violation of the Intellectual Property Collateral.
     Notwithstanding the foregoing provisions of this Section 6.1, for the
purposes of this Section 6.1, “Collateral” and “Intellectual Property
Collateral” shall include any “intent to use” trademark application only to the
extent (i) that the business of such Grantor, or portion thereof, to which that
mark pertains is also included in the Collateral and (ii) that such business is
ongoing and existing.
     SECTION 6.2. Securities Laws. Subject to the terms, conditions and
restrictions of the Intercreditor Agreement, if the Collateral Agent, at the
direction of the Administrative Agent, shall determine to exercise its right to
sell all or any of the Collateral that are Capital Securities pursuant to
Section 6.1, each Grantor agrees that, upon request of the Administrative Agent,
each Grantor will, at its own expense:
               (a) use commercially reasonable efforts to execute and deliver,
and cause (or, with respect to any issuer which is not a Subsidiary of such
Grantor, use its commercially reasonable efforts to cause) each issuer of the
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the opinion of
the Administrative Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the
“Securities Act”), and use commercially reasonable efforts to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related prospectus
which, in the opinion of the
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Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the SEC
applicable thereto;
               (b) use its commercially reasonable efforts to exempt the
Collateral under the state securities or “Blue Sky” laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested by
the Administrative Agent;
               (c) cause (or, with respect to any issuer that is not a
Subsidiary of such Grantor, use its commercially reasonable efforts to cause)
each such issuer to make available to its security holders, as soon as
practicable, an earnings statement that will satisfy the provisions of Section
11(a) of the Securities Act; and
               (d) do or use commercially reasonable efforts to cause to be done
all such other acts and things as may be necessary to make such sale of the
Collateral or any part thereof valid and binding and in compliance with
applicable law.
Each Grantor acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Collateral Agent or the Secured Parties by
reason of the failure by such Grantor to perform any of the covenants contained
in this Section and consequently agrees that, if such Grantor shall fail to
perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value (as determined by the Collateral Agent) of
such Collateral on the date the Collateral Agent shall demand compliance with
this Section.
     SECTION 6.3. Compliance with Restrictions. Each Grantor agrees that in any
sale of any of the Collateral whenever a Specified Default shall have occurred
and be continuing, the Collateral Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and such
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Collateral Agent be liable nor accountable to such Grantor for any
discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
     SECTION 6.4. Protection of Collateral. The Collateral Agent may (subject to
the terms, conditions and restrictions of the Intercreditor Agreement) from time
to time, at the direction of the Administrative Agent, perform any act which any
Grantor fails, within three days following the request by the Collateral Agent,
to perform or agree to perform (and thereafter actually perform within seven
days following notice of requested performance) (it being understood that no
such request need be given after the occurrence and during the continuance of a
Specified
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Default) and the Collateral Agent may (subject to the Intercreditor Agreement)
from time to time take any other action which the Administrative Agent deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.
ARTICLE VII
MISCELLANEOUS PROVISIONS
     SECTION 7.1. Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
     SECTION 7.2. Binding on Successors, Transferees and Assigns; Assignment.
This Security Agreement shall remain in full force and effect until the
Termination Date has occurred, shall be binding upon the Grantors and their
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that no Grantor may (unless otherwise permitted under the terms of the
Credit Agreement or this Security Agreement) assign any of its obligations
hereunder without the prior written consent of all Lenders.
     SECTION 7.3. Amendments, etc. No amendment to or waiver of any provision of
this Security Agreement, nor consent to any departure by any Grantor from its
obligations under this Security Agreement, shall in any event be effective
unless the same shall be in writing and signed by the Collateral Agent (at the
direction of the Administrative Agent) and the Administrative Agent (on behalf
of the Lenders or the Required Lenders, as the case may be, pursuant to
Section 10.1 of the Credit Agreement) and the Grantors and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
     SECTION 7.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party specified in the Credit Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other party. Any
notice or other communication, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any such notice or other communication, if
transmitted by facsimile, shall be deemed given when transmitted and
electronically confirmed.
     SECTION 7.5. Release of Liens. Upon (a) the Disposition of Collateral in
accordance with the Credit Agreement or (b) the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to (i) such Collateral (in the case of clause (a)) or (ii) all
Collateral (in the case of clause (b)). Upon any such Disposition or
termination, the Collateral Agent will, at the Grantors’ sole expense, promptly
deliver to the Grantors, without any representations, warranties or recourse of
any kind whatsoever, all Collateral held by the Collateral Agent hereunder, and
execute and deliver to the Grantors such documents as the Grantors shall
reasonably request to evidence such termination.
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     SECTION 7.6. Additional Grantors. Upon the execution and delivery by any
other Person of a supplement in the form of Annex I hereto, such U.S. Person
shall become a “Grantor” hereunder with the same force and effect as if it were
originally a party to this Security Agreement and named as a “Grantor”
hereunder. The execution and delivery of such supplement shall not require the
consent of any other Grantor hereunder (except to the extent already obtained),
and the rights and obligations of each Grantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Grantor as a party to
this Security Agreement.
     SECTION 7.7. No Waiver; Remedies. In addition to, and not in limitation of
Section 2.4, no failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
     SECTION 7.8. Headings. The various headings of this Security Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Security Agreement or any provisions thereof.
     SECTION 7.9. Severability. Any provision of this Security Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such provision
and such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Security
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
     SECTION 7.10. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION, AND PRIORITY OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK. This Security Agreement and the other Loan Documents constitute the
entire understanding among the parties hereto with respect to the subject matter
hereof and thereof and supersede any prior agreements, written or oral, with
respect thereto.
     SECTION 7.11. Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Security Agreement by facsimile (or other electronic) transmission shall be
effective as delivery of a manually executed counterpart of this Security
Agreement.
     SECTION 7.12. Foreign Pledge Agreements. Without limiting any of the
rights, remedies, privileges or benefits provided hereunder to the Collateral
Agent for its benefit and the
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ratable benefit of the other Secured Parties, each Grantor and the Collateral
Agent hereby agree that the terms and provisions of this Security Agreement in
respect of any Collateral subject to the pledge or other Lien of a Foreign
Pledge Agreement are, and shall be deemed to be, supplemental and in addition to
the rights, remedies, privileges and benefits provided to the Collateral Agent
and the other Secured Parties under such Foreign Pledge Agreement and under
applicable law to the extent consistent with applicable law; provided that, in
the event that the terms of this Security Agreement conflict or are inconsistent
with the applicable Foreign Pledge Agreement or applicable law governing such
Foreign Pledge Agreement, (i) to the extent that the provisions of such Foreign
Pledge Agreement or applicable foreign law are, under applicable foreign law,
necessary for the creation, perfection or priority of the security interests in
the Collateral subject to such Foreign Pledge Agreement, the terms of such
Foreign Pledge Agreement or such applicable law shall be controlling and
(ii) otherwise, the terms hereof shall be controlling.
     SECTION 7.13. Intercreditor Agreement. (a) Notwithstanding anything herein
to the contrary, the Lien and security interest granted to the Collateral Agent
pursuant to this Security Agreement and the exercise of any right or remedy by
the Collateral Agent hereunder is subject to the terms, conditions and
provisions of the Intercreditor Agreement in all respects. In the event of any
conflict between the terms of the Intercreditor Agreement and this Security
Agreement, the terms of the Intercreditor Agreement shall govern and control in
all respects. The Liens and security interests securing the Indebtedness and
other obligations incurred or arising under or evidenced by this instrument and
the rights and obligations evidenced hereby with respect to such Liens are
subordinate, in the manner and to the extent set forth in Intercreditor
Agreement, to the Liens and security interests securing the First Lien
Obligations and to the Liens and security interests securing Indebtedness
refinancing the First Lien Obligations as permitted by the Intercreditor
Agreement; and each holder of the Obligations, by its acceptance hereof,
irrevocably agrees to be bound by the terms, conditions and provisions of the
Intercreditor Agreement.
     (b) The delivery of any Collateral or any certificates, titles,
Instruments, Chattel Paper or Documents evidencing or in connection with such
Collateral to the First Lien Collateral Agent under and in accordance with the
First Lien Loan Documents, the granting of “control” over Collateral, the
execution and delivery of Control Agreements and/or the assignment of any
Collateral to the First Lien Collateral Agent under and in accordance with the
First Lien Loan Documents shall constitute compliance by the Grantor with the
provisions of this Security Agreement or any other Loan Document which require
delivery, possession, control and/or assignment of certain types of Collateral
by the Collateral Agent or delivery of control agreements to the Collateral
Agent so long as such First Lien Loan Documents are in full force and effect,
the First Lien Termination Date has not occurred, and the Grantors are in
compliance with the applicable provisions thereof with respect to such
Collateral. From and after the First Lien Termination Date, where this Security
Agreement refers to any provision of the First Lien Credit Agreement or any
action or delivery required by such provision, such reference shall be deemed to
be a reference to such provision as in effect immediately prior to the First
Lien Termination Date except that such action or delivery shall be made to or
for the benefit of the Collateral Agent rather than the First Lien Collateral
Agent.
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     IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer, solely in
such capacity and not as an individual, as of the date first above written.

              HANESBRANDS INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            HBI BRANDED APPAREL LIMITED, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            HANESBRANDS DIRECT, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            UPEL, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            CARIBETEX, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

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              SEAMLESS TEXTILES, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            BA INTERNATIONAL, L.L.C.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
       
 
  HBI INTERNATIONAL, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
       
 
  HBI BRANDED APPAREL ENTERPRISES, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            CASA INTERNATIONAL, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

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              UPCR, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            HBI SOURCING, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            CEIBENA DEL, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            NT INVESTMENT COMPANY, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            HANESBRANDS DISTRIBUTION, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

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              CARIBESOCK, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            NATIONAL TEXTILES, L.L.C.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            HANES PUERTO RICO, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            PLAYTEX INDUSTRIES, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            INNER SELF LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

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              PLAYTEX DORADO, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
            HANES MENSWEAR, LLC
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

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  CITIBANK, N.A.,    
 
  as Collateral Agent    
 
       
 
  By:    
 
 
 
   
 
  Name:    
 
  Title:    
 
       
 
  CITICORP USA, INC.    
 
  as Administrative Agent      
 
  By:    
 
 
 
   
 
  Name:    
 
  Title:    

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SCHEDULE I
to Security Agreement
Name of Grantor:

                                                              Common Stock      
                Authorized     Outstanding         Issuer (corporate)   Cert. #
    # of Shares     Shares     Shares     % of Shares Pledged  
 
                                       

                      Limited Liability Company Interests   Issuer (limited   %
of Limited Liability     Type of Limited Liability   liability company)  
Company Interests Pledged     Company Interests Pledged  
 
               

                      Partnership Interests       % of Partnership     % of
Partnership   Issuer (partnership)   Interests Owned     Interests Pledged  
 
               

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SCHEDULE II
to Security Agreement
Item A. Location of each Grantor.

     
Name of Grantor:
  Location for purposes of UCC:
[GRANTOR]
   

Item B. Organizational identification number.
Name of Grantor:
[GRANTOR]
Item C. Merger or other corporate reorganization.

     
Name of Grantor:
  Merger or other corporate reorganization:
[GRANTOR]
   

Item D. Taxpayer ID numbers.

     
Name of Grantor:
  Taxpayer ID numbers:
[GRANTOR]
   

Item E. Government Contracts.

     
Name of Grantor:
  Description of Contract:
[GRANTOR]
   

Item F. Deposit Accounts and Securities Accounts.

     
Name of Grantor:
  Description of Deposit Accounts and Securities Accounts:
[GRANTOR]
   

Item G. Letter of Credit Rights.
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Name of Grantor:
  Description of Letter of Credit Rights:
[GRANTOR]
   

Item H. Commercial Tort Claims.

     
Name of Grantor:
  Description of Commercial Tort Claims:
[GRANTOR]
   

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SCHEDULE III
to Security Agreement
Item A. Patents

                  ISSUED PATENTS   PATENT NO.   ISSUE DATE     TITLE  
 
               

Pending Patent Applications

                  SERIAL NO.   FILING DATE     TITLE  
 
               

Item B. Patent Licenses

                                                      Effective     Expiration  
PATENT   LICENSOR     LICENSEE     DATE     DATE  
 
                               

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SCHEDULE IV
to Security Agreement
Item A. Trademarks

                  REGISTERED TRADEMARKS     TRADEMARK   REGISTRATION NO.    
REGISTRATION DATE  
 
               

Pending Trademark Applications

                  TRADEMARK   SERIAL NO.     FILING DATE  
 
               

Item B. Trademark Licenses

                                                      Effective     Expiration  
TRADEMARK   LICENSOR     LICENSEE     DATE     DATE  
 
                               

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SCHEDULE V
to Security Agreement
Item A. Copyrights/Mask Works
REGISTERED COPYRIGHTS/MASK WORKS

                          REGISTRATION NO.   REGISTRATION DATE     AUTHOR(S)    
TITLE  
 
                       

Copyright/Mask Work Pending Registration Applications
SERIAL NO.
 
 
 
 
 
 
Item B. Copyright/Mask Work Licenses (including an all exclusive Copyright
Licenses for U.S. registered Copyrights)

                                                      Effective     Expiration  
Copyright   Licensor     Licensee     Date     Date  
 
                               

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EXHIBIT A
to Security Agreement
THE EXERCISE BY THE COLLATERAL AGENT OR ANY OTHER SECURED PARTY OF THEIR RIGHTS
HEREUNDER IS SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS OF THE
INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 7 OF THIS AGREEMENT
PATENT SECURITY AGREEMENT (SECOND LIEN)
     This PATENT SECURITY AGREEMENT, dated as of                      ___,
200___(this “Agreement”), is made by [NAME OF GRANTOR], a                     
                     (the “Grantor”), in favor of CITIBANK, N.A., as the
collateral agent (together with its successor(s) thereto in such capacity, the
“Collateral Agent”) for each of the Secured Parties.
W I T N E S S E T H :
     WHEREAS, pursuant to a Second Lien Credit Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”), among HBI Branded Apparel
Limited, Inc., a Delaware corporation (the “Borrower”), Hanesbrands Inc., the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent, the
Collateral Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as the Joint Lead Arrangers and Joint
Bookrunners, the Lenders have extended Commitments to make Loans to the
Borrower;
     WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Pledge and Security Agreement, dated as of September 5, 2006 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the “Security Agreement”);
     WHEREAS, pursuant to the Credit Agreement and pursuant to Section 4.5 of
the Security Agreement, the Grantor is required to execute and deliver this
Agreement and to grant to the Collateral Agent a continuing security interest in
all of the Patent Collateral (as defined below) to secure all Obligations; and
     WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
     SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.

 

--------------------------------------------------------------------------------

 

     SECTION 2. Grant of Security Interest. The Grantor hereby grants to the
Collateral Agent, for its benefit and the ratable benefit of each other Secured
Party, a continuing security interest in all of the Grantor’s right, title and
interest, whether now or hereafter existing or acquired by the Grantor, in and
to the following (“Patent Collateral”):
     (a) inventions and discoveries, whether patentable or not, all letters
patent and applications for letters patent, including all patent applications in
preparation for filing, including all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any of the
foregoing, including all patents issued by, or patent applications filed with,
the United States Patent and Trademark Office (“Patents”), including each Patent
and Patent application referred to in Item A of Schedule I;
     (b) all United States Patent licenses, and other agreements for the grant
by or to the Grantor of any right to use any items of the type referred to in
clause (a) above (each a “Patent License”), including each Patent License
referred to in Item B of Schedule I;
     (c) the right to sue third parties for past, present and future
infringements of any Patent or Patent application, and for breach or enforcement
of any Patent License; and
     (d) all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).
     (e) Notwithstanding the foregoing, Patent Collateral shall not include any
Excluded Collateral.
     SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Patent Collateral with the United States Patent and
Trademark Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Collateral Agent for its benefit and the ratable benefit of each other Secured
Party under the Security Agreement. The Security Agreement (and all rights and
remedies of the Collateral Agent and each Secured Party thereunder) shall remain
in full force and effect in accordance with its terms.
     SECTION 4. Release of Liens. Upon (i) the Disposition of Patent Collateral
in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Patent Collateral (in the case of clause (i))
or (B) all Patent Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Collateral Agent will, at the Grantor’s sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Patent Collateral held by the Collateral
Agent hereunder, and execute and deliver to the Grantor such Documents as the
Grantor shall reasonably request to evidence such termination.

A-2

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     SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
     SECTION 6. Loan Document. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
     SECTION 7. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder is subject to the terms, conditions and provisions of
the Intercreditor Agreement in all respects. In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control in all respects.
     SECTION 8. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile (or other electronic) transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
* * * * *

A-3

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered by its Authorized Officer, solely in such
capacity and not as an individual, as of the date first above written.

            [NAME OF GRANTOR]
      By:           Name:           Title:           CITIBANK, N.A.,
as Collateral Agent
      By:           Name:           Title:      

A-4

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SCHEDULE I
to Patent Security Agreement
Item A. Patents
Issued Patents

          Patent No.      Issue Date   Title
 
       

Pending Patent Applications

          Serial No.      Filing Date   Title
 
       

Item B. Patent Licenses

                                      Effective   Expiration     PATENT  
LICENSOR   LICENSEE   DATE   DATE
 
                   

A-5

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EXHIBIT B
to Security Agreement
THE EXERCISE BY THE COLLATERAL AGENT OR ANY OTHER SECURED PARTY OF THEIR RIGHTS
HEREUNDER IS SUBJECT TO THE TERMS, CONDITIONS AND PROVISIONS OF THE
INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 7 OF THIS AGREEMENT
TRADEMARK SECURITY AGREEMENT (SECOND LIEN)
     This TRADEMARK SECURITY AGREEMENT, dated as of                      ___,
200___(this “Agreement”), is made by [NAME OF GRANTOR], a                     
                     (the “Grantor”), in favor of CITIBANK, N.A., as the
collateral agent (together with its successor(s) thereto in such capacity, the
“Collateral Agent”) for each of the Secured Parties.
W I T N E S S E T H :
     WHEREAS, pursuant to a Second Lien Credit Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”), among HBI Branded Apparel
Limited, Inc., a Delaware corporation (the “Borrower”), Hanesbrands Inc., the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent, the
Collateral Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as the Joint Lead Arrangers and Joint
Bookrunners, the Lenders have extended Commitments to make Loans to the
Borrower;
     WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Pledge and Security Agreement, dated as of September 5, 2006 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the “Security Agreement”);
     WHEREAS, pursuant to the Credit Agreement and pursuant to Section 4.5 of
the Security Agreement, the Grantor is required to execute and deliver this
Agreement and to grant to the Collateral Agent a continuing security interest in
all of the Trademark Collateral (as defined below) to secure all Obligations;
and
     WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:

 

--------------------------------------------------------------------------------

 

     SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
     SECTION 2. Grant of Security Interest. The Grantor hereby grants to the
Collateral Agent, for its benefit and the ratable benefit of each other Secured
Party, a continuing security interest in all of the Grantor’s right, title and
interest, whether now or hereafter existing or acquired by the Grantor, in and
to the following (the “Trademark Collateral”):
     (a) (i) all United States trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos and other source or business
identifiers, and all goodwill of the business associated therewith, now existing
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications (except for any such applications
filed pursuant to 15 U.S.C. § 1051(b)) in the United States Patent and Trademark
Office, and all common-law rights relating to the foregoing, and (ii) the right
to obtain all reissues, extensions or renewals of the foregoing (collectively
referred to as “Trademarks”), including those Trademarks referred to in Item A
of Schedule I;
     (b) all Trademark licenses and other agreements for the grant by or to the
Grantor of any right to use any Trademark (each a “Trademark License”),
including each Trademark License referred to in Item B of Schedule I;
     (c) all of the goodwill of the business connected with the use of, and
symbolized by the Trademarks described in clause (a) and, to the extent
applicable, clause (b);
     (d) the right to sue third parties for past, present and future
infringements or dilution of the Trademarks described in clause (a) and, to the
extent applicable, clause (b) or for any injury to the goodwill associated with
the use of any such Trademark or for breach or enforcement of any Trademark
License; and
     (e) all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).
     Notwithstanding the foregoing, Trademark Collateral shall not include any
Excluded Collateral.
     SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Trademark Collateral with the United States Patent
and Trademark Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Collateral Agent for its benefit and the ratable benefit of each other Secured
Party under the Security Agreement. The Security Agreement (and all rights and
remedies of the

B-2

--------------------------------------------------------------------------------

 

Collateral Agent and each Secured Party thereunder) shall remain in full force
and effect in accordance with its terms.
     SECTION 4. Release of Liens. Upon (i) the Disposition of Trademark
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Trademark Collateral (in the case of clause
(i)) or (B) all Trademark Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Collateral Agent will, at the Grantor’s sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Trademark Collateral held by the Collateral
Agent hereunder, and execute and deliver to the Grantor such Documents as the
Grantor shall reasonably request to evidence such termination.
     SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Trademark Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
     SECTION 6. Loan Document. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
     SECTION 7. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder is subject to the terms, conditions and provisions of
the Intercreditor Agreement in all respects. In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control in all respects.
     SECTION 8. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile (or other electronic) transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
* * * * *

B-3

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered by Authorized Officer, solely in such capacity
and not as an individual, as of the date first above written.

            [NAME OF GRANTOR]
      By:           Name:           Title:           CITIBANK, N.A.,
as Collateral Agent
      By:           Name:           Title:      

B-4

--------------------------------------------------------------------------------

 

         

SCHEDULE I
to Trademark Security Agreement
Item A. Trademarks
Registered Trademarks

          Trademark   Registration No.   Registration Date
 
       

Pending Trademark Applications

          Trademark   Serial No.   Filing Date
 
       

Item B. Trademark Licenses

                                      Effective   Expiration     Trademark  
Licensor   Licensee   Date   Date
 
                   

 

--------------------------------------------------------------------------------

 

EXHIBIT C
to Security Agreement
THE EXERCISE BY THE COLLATERAL AGENT OR ANY OTHER SECURED PARTY OF THEIR RIGHTS
HEREUNDER IS SUBJECT TO THE TERMS, CONDITIONS AND PROVISIONS OF THE
INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 7 OF THIS AGREEMENT
COPYRIGHT SECURITY AGREEMENT (SECOND LIEN)
     This COPYRIGHT SECURITY AGREEMENT, dated as of                      ___,
200___(this “Agreement”), is made by [NAME OF GRANTOR], a                     
                     (the “Grantor”), in favor of CITIBANK, N.A., as the
collateral agent (together with its successor(s) thereto in such capacity, the
“Collateral Agent”) for each of the Secured Parties.
W I T N E S S E T H :
     WHEREAS, pursuant to a Second Lien Credit Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”), among HBI Branded Apparel
Limited, Inc., a Delaware corporation (the “Borrower”), Hanesbrands Inc., the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent, the
Collateral Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as the Joint Lead Arrangers and Joint
Bookrunners, the Lenders have extended Commitments to make Loans to the
Borrower;
     WHEREAS, in connection with the Credit Agreement, the Grantor has executed
and delivered a Pledge and Security Agreement, dated as of September 5, 2006 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the “Security Agreement”);
     WHEREAS, pursuant to the Credit Agreement and pursuant to Section 4.5 of
the Security Agreement, the Grantor is required to execute and deliver this
Agreement and to grant to the Collateral Agent a continuing security interest in
all of the Copyright Collateral (as defined below) to secure all Obligations;
and
     WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
Pledge and Security Agreement
(Second Lien)

C-1

--------------------------------------------------------------------------------

 

     SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
     SECTION 2. Grant of Security Interest. The Grantor hereby grants to the
Collateral Agent, for its benefit and the ratable benefit of each other Secured
Party, a continuing security interest in all of the Grantor’s right, title and
interest, whether now or hereafter existing or acquired by the Grantor, in and
to the following (the “Copyright Collateral”):
     (a) all United States copyrights, registered or unregistered and whether
published or unpublished, now or hereafter in force including copyrights
registered or applied for in the United States Copyright Office, and
registrations and recordings thereof and all applications for registration
thereof, whether pending or in preparation and all extensions and renewals of
the foregoing (“Copyrights”), including the Copyrights which are the subject of
a registration or application referred to in Item A of Schedule I;
     (b) all express or implied Copyright licenses and other agreements for the
grant by or to the Grantor of any right to use any items of the type referred to
in clause (a) above (each a “Copyright License”), including each Copyright
License referred to in Item B of Schedule I;
     (c) the right to sue for past, present and future infringements of any of
the Copyrights owned by the Grantor, and for breach or enforcement of any
Copyright License and all extensions and renewals of any thereof; and
     (d) all proceeds of, and rights associated with, the foregoing (including
Proceeds, licenses, royalties, income, payments, claims, damages and proceeds of
infringement suits).
     Notwithstanding the foregoing, Copyright Collateral shall not include any
Excluded Collateral.
     SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Collateral Agent in the Copyright Collateral with the United States
Copyright Office. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Collateral Agent for its benefit and the ratable benefit of each other Secured
Party under the Security Agreement. The Security Agreement (and all rights and
remedies of the Collateral Agent and each Secured Party thereunder) shall remain
in full force and effect in accordance with its terms.
     SECTION 4. Release of Liens. Upon (i) the Disposition of Copyright
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (A) such Copyright Collateral (in the case of clause
(i)) or (B) all Copyright Collateral (in the case of clause (ii)). Upon any such
Disposition or termination, the Collateral Agent will, at the Grantor’s sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind
Pledge and Security Agreement
(Second Lien)

C-2

--------------------------------------------------------------------------------

 

whatsoever, all Copyright Collateral held by the Collateral Agent hereunder, and
execute and deliver to the Grantor such Documents as the Grantor shall
reasonably request to evidence such termination.
     SECTION 5. Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Collateral Agent with respect to the
security interest in the Copyright Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein.
     SECTION 6. Loan Document. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
     SECTION 7. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Collateral Agent
pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder is subject to the terms, conditions and provisions of
the Intercreditor Agreement in all respects. In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control in all respects.
     SECTION 8. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile (or other electronic) transmission shall be effective as delivery of a
manually executed counterpart of this Agreement.
* * * * *
Pledge and Security Agreement
(Second Lien)

C-3

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed and delivered by its Authorized Officer, solely in such
capacity and not as an individual, as of the date first above written.

            [NAME OF GRANTOR]
      By:           Name:           Title:           CITIBANK, N.A.,
as Collateral Agent
      By:           Name:           Title:      

Pledge and Security Agreement
(Second Lien)

C-4

--------------------------------------------------------------------------------

 

SCHEDULE I
to Copyright Security Agreement
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works

          Registration No.   Registration Date   Title
 
       

Item B. Copyright/Mask Work Licenses (including an all exclusive Copyright
Licenses for U.S. registered Copyrights)

                              Effective   Expiration Copyright   Licensor  
Licensee   Date   Date
 
               

Pledge and Security Agreement
(Second Lien)

C-5

--------------------------------------------------------------------------------

 

ANNEX I
to Security Agreement
SUPPLEMENT TO
PLEDGE AND SECURITY AGREEMENT (SECOND LIEN)
     This SUPPLEMENT, dated as of                      ___,                     
(this “Supplement”), is to the Pledge and Security Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Security Agreement”), among the Grantors (such
term, and other terms used in this Supplement, to have the meanings set forth in
or incorporated by reference in Article I of the Security Agreement) from time
to time party thereto, in favor of CITIBANK, N.A., as the collateral agent
(together with its successor(s) thereto in such capacity, the “Collateral
Agent”) for each of the Secured Parties.
W I T N E S S E T H :
     WHEREAS, pursuant to a Second Lien Credit Agreement, dated as of
September 5, 2006 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the “Credit Agreement”), among HBI Branded Apparel
Limited, Inc., a Delaware corporation (the “Borrower”), Hanesbrands Inc., the
Lenders, HSBC Bank USA, National Association, LaSalle Bank National Association
and Barclays Bank PLC, as the Co-Documentation Agents, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc., as the
Co-Syndication Agents, Citicorp USA, Inc., as the Administrative Agent, the
Collateral Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as the Joint Lead Arrangers and Joint
Bookrunners, the Lenders have extended Commitments to make Loans to the
Borrower; and
     WHEREAS, pursuant to the provisions of Section 7.6 of the Security
Agreement, each of the undersigned is becoming a Grantor under the Security
Agreement; and
     WHEREAS, each of the undersigned desires to become a “Grantor” under the
Security Agreement in order to induce the Secured Parties to continue the Loans
under the Credit Agreement;
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the undersigned agrees, for
the benefit of each Secured Party, as follows.
     SECTION 1. Party to Security Agreement, etc. In accordance with the terms
of the Security Agreement, by its signature below each of the undersigned hereby
irrevocably agrees to become a Grantor under the Security Agreement with the
same force and effect as if it were an original signatory thereto and each of
the undersigned hereby (a) agrees to be bound by and comply with all of the
terms and provisions of the Security Agreement applicable to it as a Grantor and
(b) represents and warrants that the representations and warranties made by it
as a Grantor thereunder are true and correct in all material respects as of the
date hereof, unless stated
Pledge and Security Agreement
(Second Lien)

Annex I

--------------------------------------------------------------------------------

 

to relate solely to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date. In furtherance of the foregoing, each reference to a “Grantor” and/or
“Grantors” in the Security Agreement shall be deemed to include each of the
undersigned.
     SECTION 2. Representations. Each of the undersigned Grantor hereby
represents and warrants that this Supplement has been duly authorized, executed
and delivered by it and that this Supplement and the Security Agreement
constitute the legal, valid and binding obligation of each of the undersigned,
enforceable (except, in any case, as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally and by principles of equity) against it in
accordance with its terms.
     SECTION 3. Full Force of Security Agreement. Except as expressly
supplemented hereby, the Security Agreement shall remain in full force and
effect in accordance with its terms.
     SECTION 4. Severability. Wherever possible each provision of this
Supplement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Supplement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Supplement or the Security
Agreement.
     SECTION 5. Governing Law, Entire Agreement, etc. THIS SUPPLEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Supplement and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
     SECTION 6. Intercreditor Agreement. Notwithstanding anything herein to the
contrary, the Lien and security interest granted to the Collateral Agent
pursuant to this Supplement and the exercise of any right or remedy by the
Collateral Agent hereunder or under the Security Agreement, as supplemented
hereby, is subject to the terms, conditions and provisions of the Intercreditor
Agreement in all respects. In the event of any conflict between the terms of the
Intercreditor Agreement, the Security Agreement and this Supplement, the terms
of the Intercreditor Agreement shall govern and control in all respects.
     SECTION 7. Counterparts. This Supplement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Supplement by
facsimile (or other electronic) transmission shall be effective as delivery of a
manually executed counterpart of this Supplement.
* * * * *
Pledge and Security Agreement
(Second Lien)

Annex I - 2

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed and delivered by its Authorized Officer, solely in such
capacity and not as an individual, as of the date first above written.

            [NAME OF ADDITIONAL SUBSIDIARY]
      By:           Name:           Title:           [NAME OF ADDITIONAL
SUBSIDIARY]
      By:           Name:           Title:        

ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
CITIBANK, N.A.,
      as Collateral Agent

         
By:
       
 
 
 
Name:    
 
  Title:    

Pledge and Security Agreement
(Second Lien)

Annex I - 3

--------------------------------------------------------------------------------

 

[COPY SCHEDULES FROM SECURITY AGREEMENT]
Pledge and Security Agreement
(Second Lien)

10

--------------------------------------------------------------------------------

 

EXHIBIT H
INTERCREDITOR AGREEMENT
     This INTERCREDITOR AGREEMENT, dated as of September 5, 2006, is entered
into among CITIBANK, N.A., as First Lien Agent (as defined below), CITIBANK,
N.A., as Second Lien Agent (as defined below), CITIBANK, N.A., as Control Agent
(as defined below), the First Lien Borrower, the First Lien Guarantors, the
Second Lien Borrower and the Second Lien Guarantors (each as defined below) from
time to time a party hereto.
W I T N E S S E T H
     WHEREAS, concurrently with the execution and delivery of this Agreement,
the First Lien Borrower, certain financial institutions and other Persons (as
defined below) as lenders (together with their respective successors and
assigns, the “First Lien Lenders”), and Citicorp USA, Inc., as administrative
agent for such First Lien Lenders, are entering into a Credit Agreement, dated
as of the date hereof (as such agreement may be amended, supplemented, amended
and restated or otherwise modified from time to time, the “Initial First Lien
Financing Agreement”), pursuant to which such First Lien Lenders have agreed to
make loans and extensions of credit to the First Lien Borrower;
     WHEREAS, concurrently with the execution and delivery of this Agreement,
the Second Lien Borrower, certain financial institutions and other Persons (as
defined below) as lenders (together with their respective successors and
assigns, the “Second Lien Lenders”), and Citicorp USA, Inc., as administrative
agent for such Second Lien Lenders, are entering into a Credit Agreement, dated
as of the date hereof (as such agreement may be amended, supplemented, amended
and restated or otherwise modified from time to time, the “Initial Second Lien
Financing Agreement”), pursuant to which such Second Lien Lenders have agreed to
make loans to the Second Lien Borrower;
     WHEREAS, the First Lien Borrower and the First Lien Guarantors have granted
to the First Lien Agent security interests in the Common Collateral as security
for the prompt payment and performance of the First Lien Obligations;
     WHEREAS, the Second Lien Borrower and the Second Lien Guarantors have
granted to the Second Lien Agent security interests in the Common Collateral as
security for the prompt payment and performance of the Second Lien Obligations;
and
     WHEREAS, the First Lien Agent on behalf of itself and the First Lien
Lenders and the Second Lien Agent on behalf of itself and the Second Lien
Lenders, and by their acknowledgment hereof, the First Lien Borrower, the First
Lien Guarantors, the Second Lien Borrower and the Second Lien Guarantors, have
agreed to, among other things, the relative priority of Liens on the Common
Collateral as provided herein.
     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
obligations herein set forth and for other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, and in reliance upon the
representations, warranties
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and covenants herein contained, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
     SECTION 1.1. Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
     “Affiliate” means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
     “Agreement” means this Intercreditor Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
     “Cash Management Obligations” means, with respect to the Borrower or any of
its Subsidiaries, any direct or indirect liability, contingent or otherwise, of
such Person in respect of cash management services (including treasury,
depository, overdraft (daylight and temporary), credit or debit card, electronic
funds transfer and other cash management arrangements) provided after the
Closing Date by a Person who is (or was at the time such Cash Management
Obligations were incurred) the First Lien Administrative Agent, any First Lien
Lender or any Affiliate thereof, including obligations for the payment of fees,
interest, charges, expenses, attorneys’ fees and disbursements in connection
therewith to the extent provided for in the documents evidencing such cash
management services.
     “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. 101
et seq.), as amended from time to time.
     “Borrowers” means the First Lien Borrower and the Second Lien Borrower.
     “Capital Securities” means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued after the date hereof.
     “Capitalized Lease Liabilities” means, with respect to any Person, all
monetary obligations of such Person and its Subsidiaries under any leasing or
similar arrangement which, in accordance with GAAP, should be classified as
capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.
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     “Common Collateral” means any and all of the assets and property of any
Borrower or any Guarantor, now owned or hereafter acquired, whether real,
personal or mixed, in or upon which a Lien is granted or purported to be granted
to the First Lien Agent pursuant to the First Lien Documents and the Second Lien
Agent pursuant to the Second Lien Documents.
     “Comparable Second Lien Collateral Document” means in relation to any
Common Collateral subject to any First Lien Collateral Document, any Second Lien
Collateral Document(s) which create a security interest in the same Common
Collateral, granted by the same Borrower or same Guarantor.
     “Contingent Liability” means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person. The amount of any Person’s
obligation under any Contingent Liability shall (subject to any limitation set
with respect thereto) be deemed to be the outstanding principal amount of the
debt, obligation or other liability guaranteed thereby.
     “Control Agent” is defined in clause (a) of Section 5.5.
     “Control Collateral” means any Common Collateral consisting of any
Certificated Security, Investment Property, Deposit Account, cash and any other
Collateral as to which a Lien may be perfected through possession or control by
the secured party, or any agent therefor.
     “Controlled Account” means any deposit accounts of the Borrowers or
Guarantors subject to Liens under the terms of the First Lien Collateral
Documents or the Second Lien Collateral Documents.
     “DIP Financing” is defined in Section 6.1.
     “Discharge of First Lien Obligations” means (subject to reinstatement in
accordance with Section 6.5), the first date upon which each of the following
has occurred: (i) the payment in full in cash of all First Lien Obligations
(other than contingent obligations or indemnification obligations for which no
claim has been asserted); (ii) the termination of all Hedging Obligations or the
cash collateralization (or collateralization with other letters of credit) of
all First Lien Obligations, in a manner satisfactory to the applicable Hedging
Obligation counterparty owed such obligation; (iii) the expiration, termination
or cash collateralization (or collateralization with other letters of credit),
in a manner satisfactory to the First Lien Agent, of all Letters of Credit (as
defined in the First Lien Financing Agreement); (iv) the termination of all
commitments to extend credit under the First Lien Financing Agreement; and
(v) the delivery by the First Lien Agent to the Second Lien Agent of a written
notice confirming that the conditions set forth in clauses (i), (ii), (iii) and
(iv) have been satisfied.
     “First Lien Administrative Agent” means the “Administrative Agent” under,
and as defined in, the First Lien Financing Agreement.
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     “First Lien Agent” means Citibank, N.A., in its capacity as collateral
agent under the First Lien Collateral Documents, and any successor thereto
exercising substantially the same rights and powers.
     “First Lien Borrower” means Hanesbrands Inc., a Maryland corporation, as
borrower under the First Lien Financing Agreement.
     “First Lien Collateral” means all of the assets and properties of the First
Lien Borrower or any First Lien Guarantor, now owned or hereafter acquired,
whether real, personal or mixed, in or upon which a Lien is granted or purported
to be granted to the First Lien Lenders or the First Lien Agent as security for
any First Lien Obligation pursuant to the First Lien Documents.
     “First Lien Collateral Documents” means, collectively, the security
agreements, pledge agreements, collateral assignments, control agreements,
mortgages, deeds of trust and other documents or agreements, if any, providing
for grants or transfers for security executed and delivered by the First Lien
Borrower, any First Lien Guarantor or any of their respective Subsidiaries
creating a Lien upon property owned or to be acquired by the First Lien
Borrower, such First Lien Guarantor or such Subsidiary in favor of any holder of
First Lien Obligations or the First Lien Agent, in each case as security for any
First Lien Obligations.
     “First Lien Documents” means, collectively, the First Lien Financing
Agreement, the First Lien Collateral Documents, all Hedge Agreements evidencing
Hedging Obligations and all agreements evidencing Cash Management Obligations
that, in each case, constitute First Lien Obligations and all other agreements,
documents and instruments executed or delivered pursuant to or in connection
with any of the foregoing at any time evidencing any First Lien Obligations.
     “First Lien Financing Agreement” means, collectively, (i) the Initial First
Lien Financing Agreement, and (ii) any other credit agreement, loan agreement,
note agreement, promissory note, indenture or other agreement or instrument
evidencing or governing the terms of any Indebtedness or other financial
accommodation that has been incurred to extend, increase (subject to the
limitations set forth herein), replace, refinance or refund in whole or in part
the Indebtedness and other obligations outstanding under the Initial First Lien
Financing Agreement or any other agreement or instrument referred to in this
clause unless such agreement or instrument expressly provides that it is not
intended to be and is not a First Lien Financing Agreement; provided, that if
and to the extent that any amendment, modification, increase, replacement,
refinancing or refunding of the Initial First Lien Financing Agreement or any
other agreement referred to in this clause (in each case other than a DIP
Financing provided in accordance with Section 6) provides for revolving credit
commitments, revolving credit loans, term loans, bonds, debentures, notes or
similar instruments having a principal amount in excess of the Maximum First
Lien Principal Debt Amount, then only that portion of such principal amount in
excess of the Maximum First Lien Principal Debt Amount shall not constitute
First Lien Obligations for purposes of this Agreement. Any reference to the
First
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Lien Financing Agreement hereunder shall be deemed a reference to any First Lien
Financing Agreement then in existence.
     “First Lien Guarantor” means each Person that is (or hereafter becomes) a
guarantor of the First Lien Obligations pursuant to the First Lien Documents.
Upon becoming a guarantor thereunder such Person shall automatically be deemed
to be a First Lien Guarantor for all purposes hereunder.
     “First Lien Lenders” is defined in the recitals and in addition shall
include the First Lien Agent and any Person from time to time holding (or
committed to provide) First Lien Obligations.
     “First Lien Obligations” means, collectively, (i) subject, in the case of
principal only, to the proviso in the definition of First Lien Financing
Agreement, all Indebtedness outstanding under or with respect to one or more of
the First Lien Documents, and (ii) all other Obligations owing by the First Lien
Borrower or any First Lien Guarantor under or with respect to the First Lien
Financing Agreement or any other First Lien Document, including all claims under
the First Lien Documents for interest, fees, expense reimbursements,
indemnification and other similar claims, and all claims with respect to Cash
Management Obligations and Hedging Obligations (other than those owing to the
Second Lien Agent). First Lien Obligations shall include all interest accrued or
accruing (or which would accrue absent the commencement of an Insolvency or
Liquidation Proceeding) after the commencement of an Insolvency or Liquidation
Proceeding in accordance with and at the rate specified in the First Lien
Financing Agreement, whether or not the claim for such interest is allowed or
allowable in any Insolvency or Liquidation Proceeding. To the extent any payment
with respect to the First Lien Obligations (whether by or on behalf of the First
Lien Borrower or any First Lien Guarantor, as proceeds of security, enforcement
of any right of setoff or otherwise) is declared to be a fraudulent conveyance
or a preference or in any respect set aside or required to be paid to a debtor
in possession, the Second Lien Agent, a receiver or similar Person, then the
Obligation or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred, all as
more fully set forth in Section 6.5.
     “First Lien Required Lenders” means with respect to any amendment or
modification of the First Lien Financing Agreement or this Agreement, or any
termination or waiver of any provision of the First Lien Financing Agreement or
this Agreement, or any consent or departure by the First Lien Borrower or the
First Lien Guarantors, as the case may be, therefrom (in each case exclusive of
any such modification, waiver, consent, etc., which is permitted to be effected
by the First Lien Administrative Agent and the First Lien Borrower without
further approval or consent of any First Lien Lenders), those First Lien
Lenders, the approval of which is required pursuant to the First Lien Financing
Agreement to approve such amendment or modification, termination or waiver or
consent or departure.
     “GAAP” means United States generally accepted accounting principles and
policies as in effect from time to time.
     “Guarantors” means the First Lien Guarantors and the Second Lien
Guarantors.
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     “Governmental Authority” means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
     “Hedge Agreement” means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including any option with respect to any
of the foregoing and any combination of the foregoing agreements or
arrangements), and any confirmation executed in connection with any such
agreement or arrangement.
     “Hedging Obligations” means obligations of any Borrower, any Guarantor or
any of their respective Subsidiaries under any Hedge Agreement entered into with
any counterparty that is (or at the time of its delivery, was) the First Lien
Agent, a First Lien Lender or an Affiliate of the First Lien Agent or any First
Lien Lender.
     “including” means “including, without limitation”.
     “Indebtedness” of any Person means, (i) all obligations of such Person for
borrowed money or advances and all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (ii) all monetary obligations,
contingent or otherwise, relative to the face amount of all letters of credit,
whether or not drawn, and banker’s acceptances issued for the account of such
Person, (iii) all Capitalized Lease Liabilities of such Person, (iv) whether or
not so included as liabilities in accordance with GAAP, all obligations of such
Person to pay the deferred purchase price of property or services (excluding
trade accounts payable and accrued expenses in the ordinary course of business
which are not overdue for a period of more than 90 days or, if overdue for more
than 90 days, as to which a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of such Person), (v) indebtedness
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on property owned or being
acquired by such Person (including indebtedness arising under conditional sales
or other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse (provided that in the
event such indebtedness is limited in recourse solely to the property subject to
such Lien, for the purposes of this Agreement the amount of such indebtedness
shall not exceed the greater of the book value or the fair market value (as
determined in good faith by such Person’s board of directors or other managing
body) of the property subject to such Lien), (vi) monetary obligations arising
under Synthetic Leases, (vii) the full outstanding balance of trade receivables,
notes or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other than in any
such case any thereof sold solely for purposes of collection of delinquent
accounts and other than in connection with any Permitted Securitization (as
defined in the First Lien Financing Agreement and the Second Lien Financing
Agreement), (viii) all obligations (other than intercompany obligations) of such
Person pursuant to any Permitted Securitization (other than Standard
Securitization Undertakings (as defined in the First Lien Financing Agreement
and the Second Lien Financing Agreement)), and (ix) all Contingent Liabilities
of such Person in respect
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of any of the foregoing. The Indebtedness of any Person shall include the
Indebtedness of any other Person (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefore as a result
of such Person’s ownership interest in or other relationship with such Person,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefore.
     “Initial First Lien Financing Agreement” is defined in the recitals.
     “Initial Second Lien Financing Agreement” is defined in the recitals.
     “Insolvency or Liquidation Proceeding” means (i) any voluntary or
involuntary case or proceeding under the Bankruptcy Code with respect to any
Borrower or any Guarantor, (ii) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
any Borrower or any Guarantor or with respect to any of their respective assets,
(iii) any liquidation, dissolution, reorganization or winding up of any Borrower
or any Guarantor whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (iv) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of any Borrower or any
Guarantor.
     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, and any financing lease having
substantially the same economic effect as any of the foregoing).
     “Maximum First Lien Principal Debt Amount” means $2,600,000,000.
     “Obligations” means any principal, interest, penalties, fees, indemnities,
reimbursement obligations, guarantee obligations, costs, expenses (including
fees and disbursements of counsel), damages and other liabilities and
obligations, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with the documentation governing, or made, delivered or
given in connection with, any Indebtedness (including interest accruing at the
then applicable rate provided in such documentation after the maturity of such
Indebtedness and interest accruing at the then applicable rate provided in such
documentation after the commencement of an Insolvency or Liquidation Proceeding
(or which would, absent the commencement of an Insolvency or Liquidation
proceeding, accrue)), relating to any Borrower or any Guarantor, whether or not
a claim for such post-filing or post-petition interest is allowed or allowable
in such Insolvency or Liquidation Proceeding.
     “Person” means any natural person, corporation, limited liability company,
partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
     “Recovery” is defined in Section 6.5.
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     “Second Lien Administrative Agent” means the “Administrative Agent” under,
and as defined in, the Second Lien Financing Agreement.
     “Second Lien Agent” means Citibank, N.A., in its capacity as collateral
agent under the Second Lien Collateral Documents, and any successor thereto
exercising substantially the same rights and powers.
     “Second Lien Borrower” means HBI Branded Apparel Limited, Inc., a Delaware
corporation, as borrower under the Second Lien Financing Agreement.
     “Second Lien Collateral” means all of the assets and properties of the
Second Lien Borrower or any Second Lien Guarantor, now owned or hereafter
acquired, whether real, personal or mixed, in or upon which a Lien is granted or
purported to be granted to the Second Lien Agent or the Second Lien Lenders as
security for any Second Lien Obligation pursuant to the Second Lien Documents.
     “Second Lien Collateral Documents” means, collectively, the security
agreements, pledge agreements, collateral assignments, control agreements,
mortgages, deeds of trust and other documents or agreements, if any, providing
for grants or transfers for security executed and delivered by the Second Lien
Borrower, any Second Lien Guarantor or any of their respective Subsidiaries
creating a Lien upon property owned or to be acquired by the Second Lien
Borrower, such Second Lien Guarantor or such Subsidiary in favor of any holder
of Second Lien Obligations or the Second Lien Agent, in each case as security
for any Second Lien Obligations.
     “Second Lien Documents” means, collectively, the Second Lien Financing
Agreement, the Second Lien Collateral Documents and any other related document
or instrument executed or delivered pursuant to any of the foregoing at any time
or otherwise evidencing any Second Lien Obligations.
     “Second Lien Enforcement Date” means the date which is 180 days following
the date upon which the First Lien Agent receives a notice from the Second Lien
Agent certifying that (i) an Event of Default (under and as defined in the
Second Lien Financing Agreement) has occurred and is continuing, and (ii) Second
Lien Lenders holding the requisite amount of Second Lien Obligations (or the
Second Lien Agent on their behalf) have declared the Second Lien Obligations to
be due and payable prior to their stated maturity in accordance with the Second
Lien Financing Agreement; provided, that the Second Lien Enforcement Date shall
be stayed and shall not occur and shall be deemed not to have occurred (w) at
any time the First Lien Agent or the First Lien Lenders have commenced, and are
diligently pursuing, any enforcement action with respect to the Common
Collateral, (x) the First Lien Agent (or the First Lien Lenders holding the
requisite amount of First Lien Obligations) has declared the First Lien
Obligations to be due and payable prior to their stated maturity, (y) at any
time any Borrower or any Guarantor is then a debtor under or with respect to (or
otherwise subject to) any Insolvency or Liquidation Proceeding or (z) if the
acceleration of the Second Lien Obligations is rescinded in accordance with the
terms of the Second Lien Financing Agreement.
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     “Second Lien Financing Agreement” means, collectively, (i) the Initial
Second Lien Financing Agreement, and (ii) any other credit agreement, loan
agreement, note agreement, promissory note, indenture, or other agreement or
instrument evidencing or governing the terms of any Indebtedness or other
financial accommodation that has been incurred to extend, increase (subject to
the limitations set forth herein), replace, refinance or refund in whole or in
part the Indebtedness and other obligations outstanding under the Initial Second
Lien Financing Agreement or other agreement or instrument referred to in this
clause. Any reference to the Second Lien Financing Agreement hereunder shall be
deemed a reference to any Second Lien Financing Agreement then in existence.
     “Second Lien Guarantor” means each Person that is (or hereafter becomes) a
guarantor of the Second Lien Obligations pursuant to the Second Lien Documents.
Upon becoming a guarantor thereunder such Person shall automatically be deemed
to be a Second Lien Guarantor for all purposes hereunder.
     “Second Lien Lender” is defined in the recitals and in addition shall
include any Person holding Second Lien Obligations.
     “Second Lien Obligations” means, collectively, (i) all Indebtedness
outstanding under or with respect to the Second Lien Documents, and (ii) all
other Obligations owing by the Second Lien Borrower or any Second Lien Guarantor
under or with respect to the Second Lien Financing Agreement or any other Second
Lien Documents, including all claims under the Second Lien Documents for
interest, fees, expense reimbursements, indemnification and other similar
claims. Second Lien Obligations shall include all interest accrued or accruing
(or which would, absent the commencement of an Insolvency or Liquidation
Proceeding, accrue) after the commencement of an Insolvency or Liquidation
Proceeding in accordance with and at the rate specified in the Second Lien
Financing Agreement whether or not the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding. To the extent any payment
with respect to the Second Lien Obligations (whether by or on behalf of the
Second Lien Borrower or any Second Lien Guarantor, as proceeds of security,
enforcement of any right of setoff or otherwise) is declared to be a fraudulent
conveyance or a preference in any respect, set aside or required to be paid to a
debtor in possession, First Lien Agent, receiver or similar Person, then the
Obligation or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
     “Second Lien Required Lenders” means with respect to any amendment or
modification of the Second Lien Financing Agreement or this Agreement, or any
termination or waiver of any provision of the Second Lien Financing Agreement or
this Agreement, or any consent or departure by the Second Lien Borrower or the
Second Lien Guarantors, as the case may be, therefrom (in each case exclusive of
any such modification, waiver, consent, etc., which is permitted to be effected
by the Second Lien Administrative Agent and the Second Lien Borrower without
further approval or consent of any Second Lien Lenders), those Second Lien
Lenders, the approval of which is required pursuant to the Second Lien Financing
Agreement to approve such amendment or modification, termination or waiver or
consent or departure.
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     “Second Lien Security Agreement” means, collectively, the security
agreements, pledge agreements or similar collateral documents by which the
Second Lien Agent obtains a Lien or security interest in the Common Collateral
for the benefit of the Second Lien Lenders.
     “Subsidiary” means, with respect to any Person, any other Person of which
more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person.
     “Synthetic Lease” means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (i) that is not a capital lease in accordance
with GAAP and (ii) in respect of which the lessee retains or obtains ownership
of the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
     “Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in
effect from time to time in the State of New York or any other applicable
jurisdiction.
     “United States” means the United States of America, its fifty states and
the District of Columbia.
     “Voting Securities” means, with respect to any Person, Capital Securities
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
     SECTION 1.2. UCC Defined Terms. In addition, the following terms which are
defined in the Uniform Commercial Code are used herein as so defined:
Certificated Security, Deposit Account, Instrument and Investment Property.
     SECTION 1.3. Definitions (Generally). The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. The word
“will” shall be construed to have the same meaning and effect as the word
“shall.” Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document (including this
Agreement) herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, extended, supplemented,
restated, replaced or otherwise modified (subject to any restrictions on such
amendments, extensions, supplements, restatements, replacements or modifications
set forth herein), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,” “hereof”
and “hereunder,” and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision thereof,
(iv) all references herein to Sections shall be construed to refer to Sections
of this Agreement, (v) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contracts, and (vi) any reference to any law, rule, regulation, statute, code,
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ordinance or treaty shall include any statutory or regulatory provisions
consolidating, amending, replacing, supplementing or interpreting any of the
foregoing.
ARTICLE II
LIEN PRIORITIES
     SECTION 2.1. Lien Priority.
     (a) Priority. Notwithstanding (i) the date, time, method, manner or order
of grant, attachment or perfection (or failure to perfect) of any Liens granted
to the Second Lien Agent or the Second Lien Lenders on all or any portion of the
Common Collateral or of any Liens granted to the First Lien Agent or the First
Lien Lenders on all or any portion of the Common Collateral, and regardless of
how such Lien was acquired (whether by grant, statute, operation of law,
subrogation or otherwise), (ii) the order or time of filing or recordation of
any document or instrument for perfecting the Liens in favor of the First Lien
Agent or the Second Lien Agent (or any First Lien Lender or Second Lien Lender)
in any Common Collateral, (iii) any provision of the UCC, the Bankruptcy Code or
any applicable law, the First Lien Documents or the Second Lien Documents,
(iv) whether the First Lien Agent or the Second Lien Agent, in each case, either
directly or through agents, holds possession of, or has control over, all or any
part of the Common Collateral, (v) the fact that any Liens in favor of the First
Lien Agent or the First Lien Lenders securing any of the First Lien Obligations
are (A) subordinated to any Lien securing any obligation of any Borrower or any
Guarantor other than the First Lien Obligations or (B) otherwise subordinated,
voided, avoided, invalidated, or lapsed, or (vi) any other circumstance
whatsoever, the Second Lien Agent, on behalf of itself and the Second Lien
Lenders, hereby agrees that: (x) any Lien on any Common Collateral securing the
First Lien Obligations now or hereafter held by the First Lien Agent or the
First Lien Lenders shall be senior in priority to all Liens on any Common
Collateral securing the Second Lien Obligations; and (y) any Lien on any Common
Collateral now or hereafter held by the Second Lien Agent or the Second Lien
Lenders shall be and are expressly junior and subordinate in priority to any and
all Liens on any Common Collateral securing the First Lien Obligations.
     (b) Effect of Perfection or Failure to Perfect. Notwithstanding any failure
by the First Lien Agent, any First Lien Lender, the Second Lien Agent or any
Second Lien Lender to perfect its security interests in any Common Collateral or
any avoidance, invalidation or subordination by any third party or court of the
security interests in any Common Collateral granted to any such Person, the
priority and rights as between the First Lien Agent and the First Lien Lenders
on the one hand and the Second Lien Agent and the Second Lien Lenders on the
other hand with respect to any Common Collateral shall be as set forth in this
Agreement.
     (c) Nature of First Lien Obligations. The Second Lien Agent on behalf of
itself and the Second Lien Lenders acknowledges that a portion of the First Lien
Obligations are revolving in nature and that the amount thereof that may be
outstanding at any time or from time to time may be increased or reduced and
subsequently reborrowed, and that the terms of the First Lien Obligations may be
modified, extended or amended from
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time to time, and (subject to the proviso in the definition of First Lien
Financing Agreement) the aggregate amount of the First Lien Obligations may be
increased, replaced or refinanced, in each event, without notice to or consent
by the Second Lien Agent or any Second Lien Lender and without affecting the
provisions hereof. The lien priorities provided in this Section shall not be
altered or otherwise affected by any such amendment, modification, supplement,
extension, repayment, reborrowing, increase, replacement, renewal, restatement
or refinancing of either the First Lien Obligations or the Second Lien
Obligations, or any portion thereof.
     SECTION 2.2. Prohibition on Contesting Liens. The Second Lien Agent, for
itself and on behalf of each Second Lien Lender, and the First Lien Agent, for
itself and on behalf of each First Lien Lender, each agrees that it shall not
(and hereby waives any right to) directly or indirectly contest or support any
other Person in contesting, or objecting to, in any proceeding (including any
Insolvency or Liquidation Proceeding), the priority, perfection, validity or
enforceability of any Lien in any Common Collateral granted to the other, or the
provisions of this Agreement.
     SECTION 2.3. No New Liens.
     (a) Limitation on other Collateral for First Lien Lenders. So long as any
Second Lien Obligations remain outstanding, and subject to Section 6 hereof,
(i) the First Lien Agent agrees that, after the date hereof, neither the First
Lien Agent nor any First Lien Lender shall acquire or hold any Lien (other than
cash collateralization of any First Lien Obligation consisting of letters of
credit, Hedging Obligations or Bank Product Obligations) on any assets of any
Borrower, any Guarantor or any of their respective Subsidiaries securing any
First Lien Obligations which assets are not also subject to the second-priority
Lien of the Second Lien Agent under the Second Lien Documents, and (ii) each
Borrower and each Guarantor agrees not to grant any Lien on any of its assets,
or permit any of its Subsidiaries to grant a Lien (other than cash
collateralization of any First Lien Obligation consisting of letters of credit,
Hedging Obligations or Bank Product Obligations) on any of its assets, in favor
of the First Lien Agent or the First Lien Lenders securing the First Lien
Obligations unless it, or such Subsidiary, has granted a similar Lien on such
assets in favor of the Second Lien Agent or the Second Lien Lenders securing the
Second Lien Obligations. If the First Lien Agent or any First Lien Lender shall
acquire any Lien (other than cash collateralization of any First Lien Obligation
consisting of letters of credit, Hedging Obligations or Bank Product
Obligations) on any assets of any Borrower, any Guarantor or any of their
respective Subsidiaries securing any First Lien Obligations which assets are not
also subject to the second-priority Lien of the Second Lien Agent under the
Second Lien Documents, then the First Lien Agent (or the relevant First Lien
Lender), shall, without the need for any further consent of any other Person and
notwithstanding anything to the contrary in any other First Lien Document (A) be
deemed to hold and have held such Lien for the benefit of the Second Lien Agent
as security for the Second Lien Obligations subject to the priorities and other
terms set forth herein or (B) release such Lien.
     (b) Limitation on other Collateral for Second Lien Lenders. Until the date
upon which the Discharge of First Lien Obligations shall have occurred, (i) the
Second
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Lien Agent agrees that, after the date hereof, neither the Second Lien Agent nor
any Second Lien Lender shall acquire or hold any Lien on any assets of any
Borrower, any Guarantor or any of their respective Subsidiaries securing any
Second Lien Obligations which assets are not also subject to the first-priority
Lien of the First Lien Agent securing the First Lien Obligations, and (ii) each
Borrower and each Guarantor agrees not to grant any Lien on any of its assets,
or permit any of its Subsidiaries to grant a Lien on any of its assets, in favor
of the Second Lien Agent or the Second Lien Lenders securing the Second Lien
Obligations unless it, or such Subsidiary, has granted a similar Lien on such
assets in favor of the First Lien Agent or the First Lien Lenders. If the Second
Lien Agent or any Second Lien Lender shall acquire any Lien on any assets of any
Borrower, any Guarantor or any of their respective Subsidiaries securing any
Second Lien Obligations which assets are not also subject to the first-priority
Lien of the First Lien Agent securing the First Lien Obligations, then the
Second Lien Agent (or the relevant Second Lien Lender), shall, without the need
for any further consent of any other Person and notwithstanding anything to the
contrary in any other Second Lien Document (A) be deemed to hold and have held
such Lien for the benefit of the First Lien Agent as security for the First Lien
Obligations subject to the priorities and other terms set forth herein or
(B) release such Lien.
     SECTION 2.4. Similar Liens and Agreements. The parties hereto agree that it
is their intention that the First Lien Collateral and the Second Lien Collateral
be identical. In furtherance of the foregoing, the parties hereto agree:
     (a) upon request of the First Lien Agent or the Second Lien Agent, to
cooperate in good faith (and to direct their counsel and agents to cooperate in
good faith) from time to time in order to determine the specific items included
in the First Lien Collateral and the Second Lien Collateral and the steps taken
to perfect their respective Liens thereon and the identity of the respective
grantors with respect thereto; and
     (b) that the terms and provisions contained in the documents and agreements
creating or evidencing the First Lien Collateral and the Second Lien Collateral
shall be in all material respects be the same forms of documents other than with
respect to the priority of the Liens thereunder.
ARTICLE III
ENFORCEMENT, STANDSTILL, WAIVERS
     SECTION 3.1. Standstill and Waivers. Until the earlier of (i) the date upon
which the Discharge of First Lien Obligations shall have occurred, whether or
not any Insolvency or Liquidation Proceeding has been commenced by or against
any Borrower, any Guarantor or any of their respective Subsidiaries, or (ii) the
Second Lien Enforcement Date, neither the Second Lien Agent nor the Second Lien
Lenders:
     (a) will oppose, object to or contest in any manner, any foreclosure, sale,
lease, exchange, transfer or other disposition of any Common Collateral by the
First Lien Agent or any First Lien Lender, or any other exercise of any rights
or remedies by or on behalf of the First Lien Agent or any First Lien Lender in
respect of any Common Collateral,
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including the commencement or prosecution of any enforcement action under
applicable law or the First Lien Documents;
     (b) shall have any right to (1) direct either the First Lien Agent or any
First Lien Lender to exercise any right, remedy or power with respect to any
Common Collateral or pursuant to the First Lien Documents or (2) contest or
object to the exercise by the First Lien Agent or any First Lien Lender of any
right, remedy or power with respect to any Common Collateral or pursuant to the
First Lien Documents or to the timing or manner in which any such right is
exercised or not exercised (and, to the extent they may have any such right
described in this clause, whether as a junior lien creditor or otherwise, they
hereby irrevocably waive such right);
     (c) will institute any suit or other proceeding or assert in any suit,
Insolvency or Liquidation Proceeding or other proceeding any claim against the
First Lien Agent or any First Lien Lender seeking damages from or other relief
by way of specific performance, instructions or otherwise, with respect to, and
none of the First Lien Agent nor any First Lien Lender shall be liable for, any
action taken or omitted to be taken by the First Lien Agent or any First Lien
Lender with respect to any Common Collateral or pursuant to the First Lien
Documents; provided, that this provision shall not prevent the Second Lien Agent
on behalf of the Second Lien Lenders from asserting claims against the First
Lien Agent for damages arising from its gross negligence or willful misconduct
in performing its duties and obligations hereunder;
     (d) will take, receive or accept any Common Collateral or any proceeds of
any Common Collateral, except in accordance with the provisions of this
Agreement;
     (e) will commence judicial or nonjudicial foreclosure proceedings with
respect to, seek to have a trustee, receiver, liquidator or similar official
appointed for or over, attempt any action to take possession of any Common
Collateral, exercise any right, remedy or power with respect to, or otherwise
take any action to enforce their interest in or realize upon, any Common
Collateral or pursuant to the Second Lien Documents; or
     (f) will seek, and hereby waive any right, to have the Common Collateral or
any part thereof marshaled upon any foreclosure or other disposition of any
Common Collateral.
     SECTION 3.2. Exclusive Enforcement; Nature of Rights.
     (a) Limitation on Action by Second Lien Lenders. Until the earlier of
(i) the date upon which the Discharge of First Lien Obligations shall have
occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against any Borrower, any Guarantor or any of their respective
Subsidiaries, or (ii) the Second Lien Enforcement Date, the Second Lien Agent
agrees, on behalf of itself and the Second Lien Lenders, that the First Lien
Agent and the First Lien Lenders shall have the exclusive right to enforce
rights, exercise remedies (including setoff) and make determinations regarding
release (in connection with any such enforcement of rights or
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exercise of remedies), disposition, or restrictions with respect to any Common
Collateral without any consultation with or the consent of the Second Lien Agent
or any Second Lien Lender; provided, that in each case (subject to the
provisions of Section 6), (A) in any Insolvency or Liquidation Proceeding
commenced by or against the Second Lien Borrower or any Second Lien Guarantor,
the Second Lien Agent may file a claim or statement of interest with respect to
the Second Lien Obligations, (B) the Second Lien Agent may take any action (not
adverse to the senior Liens on any Common Collateral securing the First Lien
Obligations or the rights of the First Lien Agent to exercise remedies in
respect thereof) in order to preserve or protect its Lien on any Common
Collateral, (C) the Second Lien Agent shall be entitled to file any necessary
responsive or defensive pleadings in opposition to any motion, claim, adversary
proceeding or other pleading made by any Person objecting to or otherwise
seeking the disallowance of the claims of the Second Lien Lenders or the Second
Lien Agent, including any claims secured by any Common Collateral, in each case
in accordance with the terms of this Agreement, (D) the Second Lien Agent and
the Second Lien Lenders shall be entitled to file any pleadings, objections,
motions or agreements which assert rights or interests available to unsecured
creditors of the Second Lien Borrower and the Second Lien Guarantors arising
under either bankruptcy or non-bankruptcy law, except as specifically prohibited
herein, (E) the Second Lien Lenders and the Second Lien Agent shall be entitled
to file any proof of claim and other filings and make any agreements and motions
that are, in each case, in accordance with the terms of this Agreement, and
(F) the Second Lien Lenders and the Second Lien Agent may exercise any of their
rights and remedies with respect to any Common Collateral after the Second Lien
Enforcement Date and so long as the Second Lien Enforcement Date has not been
suspended pursuant to the definition thereof.
In exercising rights and remedies with respect to any Common Collateral, the
First Lien Agent and the First Lien Lenders may enforce the provisions of the
First Lien Documents and exercise remedies thereunder, all in such order and in
such manner as they may determine in the exercise of their sole discretion. Such
exercise and enforcement shall include the rights of an agent appointed by them
to sell or otherwise dispose of Common Collateral upon foreclosure, to incur
expenses in connection with such sale or disposition, and to exercise all the
rights and remedies of a secured party under the Uniform Commercial Code of any
applicable jurisdiction and of a secured creditor under bankruptcy or similar
laws of any applicable jurisdiction.
     (b) Permitted Action by Second Lien Lenders. Without limiting the
generality of the foregoing provisions of this Section, until the earlier of
(i) the date upon which the Discharge of First Lien Obligations shall have
occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against any Borrower, any Guarantor or any of their respective
Subsidiaries, or (ii) the Second Lien Enforcement Date, and subject to any other
rights set forth herein, the sole right of the Second Lien Agent and the Second
Lien Lenders with respect to any Common Collateral is to hold a Lien on any
Common Collateral pursuant to the Second Lien Documents for the period and to
the extent granted therein and to receive a share of the proceeds thereof, if
any, as set forth herein.
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     SECTION 3.3. No Additional Rights For the Borrower Hereunder. Except as
provided in Section 3.4, if the First Lien Agent or any First Lien Lender or
Second Lien Agent or any Second Lien Lender enforces its rights or remedies in
violation of the terms of this Agreement, neither any Borrower nor any Guarantor
shall be entitled to use such violation as a defense to any action by the First
Lien Agent or any First Lien Lender or Second Lien Agent or any Second Lien
Lender, nor to assert such violation as a counterclaim or basis for set off or
recoupment against the First Lien Agent or any First Lien Lender or Second Lien
Agent or any Second Lien Lender.
     SECTION 3.4. Actions Upon Breach.
     (a) If any Second Lien Lender or Second Lien Agent or First Lien Lender or
First Lien Agent, contrary to this Agreement, commences or participates in any
action or proceeding against any Borrower or any Guarantor or the Common
Collateral, such Borrower or Guarantor, with the prior written consent of the
First Lien Agent or the Second Lien Agent, as applicable, may interpose as a
defense or dilatory plea the making of this Agreement, and any First Lien Lender
or the First Lien Agent or Second Lien Lender or the Second Lien Agent, as
applicable, may intervene and interpose such defense or plea in its or their
name or in the name of such Borrower or Guarantor.
     (b) Should any Second Lien Lender or the Second Lien Agent, contrary to
this Agreement, in any way take, attempt to or threaten to take any action with
respect to the Common Collateral (including, without limitation, any attempt to
realize upon or enforce any remedy with respect to this Agreement), or fail to
take any action required by this Agreement, any First Lien Lender or First Lien
Agent (in its own name or in the name of the relevant Borrower or Guarantor) or
the relevant Borrower or Guarantor may obtain relief against such Second Lien
Lender or the Second Lien Agent, as applicable, by injunction, specific
performance and/or other appropriate equitable relief, it being understood and
agreed by the Second Lien Agent on behalf of each Second Lien Lender and itself
that (i) the First Lien Lenders’ or the First Lien Agent’s damages from its
actions may at that time be difficult to ascertain and may be irreparable, and
(ii) each Second Lien Lender and the Second Lien Agent waive any defense that
the Borrowers or Guarantors and/or the First Lien Lenders or the First Lien
Agent cannot demonstrate damage and/or be made whole by the awarding of damages.
     (c) Should any First Lien Lender or First Lien Agent, contrary to this
Agreement, in any way take, attempt to or threaten to take any action with
respect to the Common Collateral (including, without limitation, any attempt to
realize upon or enforce any remedy with respect to this Agreement), or fail to
take any action required by this Agreement, any Second Lien Lender or the Second
Lien Agent (in its own name or in the name of the relevant Borrower or
Guarantor) or the relevant Borrower or Guarantor may obtain relief against such
First Lien Lender or the First Lien Agent, as applicable, by injunction,
specific performance and/or other appropriate equitable relief, it being
understood and agreed by the First Lien Agent on behalf of each First Lien
Lender and itself that (i) the Second Lien Lender’s and the Second Lien Agent’s
damages from its actions may at that time be difficult to ascertain and may be
irreparable, and (ii) each First Lien Lender and the First Lien Agent waive any
defense that the Borrowers or
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Guarantors and/or the Second Lien Lenders or the Second Lien Agent cannot
demonstrate damage and/or be made whole by the awarding of damages.
ARTICLE IV
PAYMENTS
     SECTION 4.1. Application of Proceeds. Until the date upon which the
Discharge of First Lien Obligations shall have occurred (except as specifically
provided in the First Lien Documents and in the Second Lien Documents), the cash
proceeds of Common Collateral received in connection with the sale or
disposition of, or collection on, such Common Collateral and whether or not
pursuant to any exercise of remedies or any Insolvency or Liquidation
Proceeding, shall be applied by the First Lien Agent to the First Lien
Obligations and, to the extent applicable, to the Second Lien Agent for
application to the Second Lien Obligations in such order as specified in the
First Lien Documents. Upon the Discharge of First Lien Obligations, the First
Lien Agent shall deliver to the Second Lien Agent any proceeds of Common
Collateral held by it in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct. Upon
the Discharge of the Second Lien Obligations, the Second Lien Agent shall
deliver to the applicable Borrower or Guarantor any proceeds of Common
Collateral held by it in the same form as received, with any necessary
endorsements or as a court of competent jurisdiction may otherwise direct.
     SECTION 4.2. Payments Over. Until the date upon which the Discharge of
First Lien Obligations has occurred, any Common Collateral or proceeds thereof
received by the Second Lien Agent or any Second Lien Lender in contravention of
this Agreement shall be segregated and held in trust and forthwith paid over to
the First Lien Agent for the benefit of the First Lien Lenders in the same form
as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. Until the date upon which the Discharge of
First Lien Obligations shall have occurred, the First Lien Agent is hereby
authorized to make any such endorsements as agent for the Second Lien Agent or
such Second Lien Lender.
ARTICLE V
OTHER AGREEMENTS
     SECTION 5.1. Releases.
     (a) Until the date upon which the Discharge of First Lien Obligations shall
have occurred, if:
     (i) the First Lien Agent exercises any of its remedies in respect of any
Common Collateral in accordance with the terms of this Agreement, including any
sale, lease, exchange, transfer or other disposition of such Common Collateral;
     (ii) there occurs any sale, lease, exchange, transfer or other disposition
of Common Collateral to a Person other than a Borrower or a Guarantor in a
transaction that is permitted under the terms of the First Lien Financing
Agreement and the Second Lien Financing Agreement (whether or not in either case
an event of default under, and as defined therein, has occurred and is
continuing) at the time of such transaction; or
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     (iii) the Common Collateral to be released consists of the assets of a
Subsidiary of a Borrower or a Guarantor all of the Capital Securities of which
is being released pursuant to any other provision of this clause;
and if, in connection therewith, the First Lien Agent, for itself or on behalf
of any of the First Lien Lenders, releases any of its Liens on any part of the
Common Collateral, or releases any Guarantor from its obligations under its
guaranty of the First Lien Obligations (other than in connection with the
Discharge of First Lien Obligations), the Liens, if any, of the Second Lien
Agent, for itself or for the benefit of the Second Lien Lenders, on such Common
Collateral, and the obligations of such Guarantor under its guaranty of the
Second Lien Obligations, shall be automatically, unconditionally and
simultaneously released with no further consent or action of any Person, and the
Second Lien Agent, for itself or on behalf of any such Second Lien Lender,
promptly shall execute and deliver to the First Lien Agent and the Borrowers
such termination statements, releases and other documents and shall take such
further actions as the First Lien Agent, the Borrowers or such Guarantor may
reasonably request to effectively confirm such release.
     (b) The Second Lien Agent, for itself and on behalf of the Second Lien
Lenders, hereby irrevocably constitutes and appoints the First Lien Agent and
any officer or agent of the First Lien Agent, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Second Lien Agent or such Second Lien
Lender or in the First Lien Agent’s own name, from time to time, in the First
Lien Agent’s discretion, for the purpose of carrying out the terms of this
Section, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Section including, without limitation, any financing
statements, endorsements or other instruments or transfer or release. This
appointment is coupled with an interest.
     SECTION 5.2. Insurance. To the extent provided in the relevant First Lien
Collateral Documents or the Second Lien Collateral Documents, as the case may
be, the First Lien Agent and the Second Lien Agent shall be named as additional
insureds and the Control Agent shall be named as loss payee (on behalf of the
First Lien Agent, the First Lien Lenders, the Second Lien Agent and the Second
Lien Lenders) under any insurance policies maintained from time to time by the
Borrower or Guarantors. Until the date upon which the Discharge of First Lien
Obligations shall have occurred, as between the First Lien Agent and the First
Lien Lenders, on the one hand, and the Second Lien Agent and the Second Lien
Lenders on the other, the First Lien Agent and the First Lien Lenders shall have
the sole and exclusive right to the extent provided for in the First Lien
Documents (i) to adjust or settle any insurance policy or claim covering any
Common Collateral in the event of any loss thereunder; and (ii) to approve any
award granted in any condemnation or similar proceeding affecting any Common
Collateral. Until the date upon which the Discharge of First Lien Obligations
shall have occurred, all proceeds of any such policy and any such award in
respect of any Common Collateral that are payable to the First Lien Agent and
the Second Lien Agent shall be paid to the First Lien Agent for the benefit of
the First Lien Lenders to the extent required under the First Lien Documents
and, thereafter, to the Second Lien Agent for the benefit of the Second Lien
Lenders to the extent required under the applicable Second Lien Documents and
then to the applicable Borrower or Guarantor or as a court of competent
jurisdiction may
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otherwise direct. If the Second Lien Agent or any Second Lien Lender shall, at
any time, receive any proceeds of any such insurance policy or any such award in
contravention of this Agreement, it shall pay such proceeds over to the First
Lien Agent in accordance with the terms of Section 4.2.
     SECTION 5.3. Amendments to Second Lien Collateral Documents.
     (a) Until the date upon which the Discharge of First Lien Obligations shall
have occurred, without the prior written consent of the First Lien Agent, no
Second Lien Collateral Document may be amended, supplemented or otherwise
modified or entered into to the extent such amendment, supplement or
modification, or the terms of any new Second Lien Financing Agreement or Second
Lien Collateral Document, would contravene any of the terms of this Agreement.
The Second Lien Agent agrees that each Second Lien Collateral Document shall
include the following language:
“Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Collateral Agent pursuant to this Agreement and the exercise of
any right or remedy by the Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement, dated as of the date hereof, as the
same may be amended, restated, supplemented, modified or replaced from time to
time (the “Intercreditor Agreement”) among Citibank, N.A., as First Lien Agent,
Citibank, N.A., as Second Lien Agent, Citibank, N.A., as Control Agent, the
First Lien Borrower, the First Lien Guarantors, the Second Lien Borrower and the
Second Lien Guarantors (each as defined therein) from time to time a party
thereto. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern.”
In addition, the Second Lien Agent agrees that each Second Lien Collateral
Document under which any Lien on real property owned by the Second Lien Borrower
or any Second Lien Guarantor is granted to secure the Second Lien Obligations
covering any Common Collateral shall contain such other language as the First
Lien Agent may reasonably request to reflect the priority of the First Lien
Collateral Document covering such Common Collateral over such Second Lien
Collateral Document.
     (b) Without the prior written consent of the First Lien Agent (and any
required consent of the First Lien Lenders), no Second Lien Document may be
amended, supplemented or otherwise modified to the extent such amendment,
supplement or modification would (i) increase the then outstanding aggregate
principal amount of the loans under the Second Lien Financing Agreement to an
amount exceeding $450,000,000, (ii) contravene the provisions of this Agreement,
(iii) increase the “Applicable Margin” or similar component of the interest on
the loans thereunder by more than 3.0% per annum (exclusive, for the avoidance
of doubt, of any imposition of up to 2.0% of “default” interest), (iv) provide
for dates for payment of principal, interest, premium (if any) or fees which are
earlier than such dates under the Second Lien Financing Agreement, (v) provide
for covenants, events of default or remedies which are more restrictive on any
Guarantor than those set forth in the Second Lien Financing Agreement,
(vi) provide for redemption, prepayment or defeasance provisions that are
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more burdensome on any Guarantor than those set forth in the Second Lien
Financing Agreement, (vii) provide for collateral securing Indebtedness
thereunder which is more extensive than the collateral provided with respect to
the First Lien Financing Agreement or (viii) increase the obligations of any
Guarantor (except as set forth herein) or confer any additional rights on any
Second Lien Lender which could reasonably be expected to be adverse to the First
Lien Lender.
     (c) Without the prior written consent of the Second Lien Agent (and any
required consent of the Second Lien Lenders), no First Lien Document may be
amended, supplemented or otherwise modified to the extent such amendment,
supplement or modification would (i) contravene the provisions of this
Agreement, (ii) increase the then outstanding aggregate principal amount of the
loans under the First Lien Financing Agreement plus, if any, any undrawn portion
of any commitment under the First Lien Financing Agreement in excess of the
Maximum First Lien Principal Amount or (iii) increase the “Applicable Margin” or
similar component of the interest of the loans thereunder by more than 3.0% per
annum from the “Applicable Margin” or similar component of the interest under
the First Lien Financing Agreement as in effect as of the date hereof
(exclusive, for the avoidance of doubt, of any imposition of up to 2.0% of
“default” interest).
     SECTION 5.4. Rights as Unsecured Creditors and Judgment Creditors.
     (a) Except as otherwise expressly set forth in Section 3.1 and Section 3.2
and subject to Article VI, (i) the Second Lien Agent and the Second Lien Lenders
may exercise all rights and remedies as unsecured creditors against the Second
Lien Borrower, the Second Lien Guarantors or any of their Subsidiaries in
accordance with the terms of the Second Lien Documents and applicable law and
this Agreement, and (ii) nothing in this Agreement shall prohibit the
acceleration of the obligations under the Second Lien Documents or the receipt
of the Second Lien Agent or the Second Lien Lenders of the required payments of
principal and interest and other amounts, so long as such receipt is not the
direct or indirect result of the exercise of the Second Lien Agent or any Second
Lien Lender of rights and remedies as a secured creditor or enforcement in
contravention of this Agreement of any Lien held by any of them.
     (b) In the event the Second Lien Agent or any Second Lien Lender becomes a
judgment lien creditor in respect of Common Collateral as a result of its
enforcement of its rights as an unsecured creditor, such judgment lien shall be
subject to the terms of this Agreement for all purposes and shall be junior to
the Liens securing First Lien Obligations on the same basis as the other Liens
securing the Second Lien Obligations are junior to such First Lien Obligations
under this Agreement. Nothing in this Agreement modifies any rights or remedies
the First Lien Agent or the First Lien Lenders may have with respect to the
First Lien Collateral.
     SECTION 5.5. Limited Agency of Citibank, N.A. for Perfection.
     (a) The First Lien Agent, on behalf of itself and the First Lien Lenders,
and the Second Lien Agent, on behalf of itself and the Second Lien Lenders, each
hereby appoint
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Citibank, N.A. as its collateral agent (in such capacity, together with any
successor in such capacity appointed by the First Lien Agent and consented to by
the Second Lien Agent (such consent not to be unreasonably withheld or delayed),
the “Control Agent”) for the limited purpose of acting as the agent on behalf of
the First Lien Agent (on behalf of itself and the First Lien Lenders) and the
Second Lien Agent (on behalf of itself and the Second Lien Lenders) with respect
to the Control Collateral for purposes of perfecting the Liens of such parties
on the Control Collateral. The Control Agent accepts such appointment and agrees
to hold the Control Collateral that is part of the Common Collateral in its
possession or control (or in the possession or control of its agents or bailees)
as Control Agent for the benefit of the First Lien Agent (on behalf of itself
and the First Lien Lenders) and the Second Lien Agent (on behalf of itself and
the Second Lien Lenders) and any permitted assignee of any thereof solely for
the purpose of perfecting the security interest granted to such parties in such
Control Collateral, subject to the terms and conditions of this Section. The
Control Agent, the First Lien Agent, on behalf of itself and the First Lien
Lenders, and the Second Lien Agent, on behalf of itself and the Second Lien
Lenders, each hereby agrees that the First Lien Agent shall have the sole and
exclusive right and authority to give instructions to, and otherwise direct, the
Control Agent in respect of the Control Collateral or any control agreement with
respect to any Control Collateral until the earlier of the date upon which the
Discharge of First Lien Obligations shall have occurred and the Second Lien
Enforcement Date, and neither the Second Lien Agent nor any Second Lien Lender
will hinder, delay or interfere with the exercise of such rights by the First
Lien Agent in any respect. The First Lien Agent and the Second Lien Agent hereby
acknowledge that the Control Agent will obtain “control” under the UCC over each
Controlled Account as contemplated by the First Lien Collateral Documents and
the Second Lien Collateral Documents for the benefit of both the First Lien
Agent (on behalf of itself and the First Lien Lenders) and the Second Lien Agent
(on behalf of itself and the Second Lien Lenders) pursuant to the control
agreements relating to each respective Controlled Account. The Borrowers hereby
agree to pay, reimburse, indemnify and hold harmless the Control Agent to the
same extent and on the same terms that the First Lien Borrower is required to do
so for the First Lien Agent in accordance with the First Lien Financing
Agreement. The First Lien Agent and the Second Lien Agent hereby also
acknowledge and agree that the Control Agent, to the extent it receives landlord
lien waivers, will receive such landlord lien waivers for the benefit of the
Second Lien Agent for the benefit of Second Lien Lenders and the First Lien
Agent for the benefit of the First Lien Lenders. Except as set forth below, the
Control Agent shall have no obligation whatsoever to the Second Lien Agent or
any Second Lien Lender including any obligation to assure that the Control
Collateral is genuine or owned by any Borrower, any Guarantor or one of their
respective Subsidiaries or to preserve rights or benefits of any Second Lien
Lender or the Second Lien Agent except as expressly set forth in this Section.
In acting on behalf of the Second Lien Agent and the Second Lien Lenders, the
duties or responsibilities of the Control Agent under this Section shall be
limited solely (i) to physically holding the Control Collateral delivered to the
Control Agent by the Borrowers, Guarantors or any Subsidiary of such Person as
agent for the Second Lien Agent (on behalf of itself and the Second Lien
Lenders) for purposes of perfecting the Lien held by the Second Lien
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Agent (on behalf of itself and the Second Lien Lenders) and (ii) delivering such
collateral as set forth in clause (d) of Section 5.5.
     (b) The rights of the Second Lien Agent shall at all times be subject to
the terms of this Agreement and to the First Lien Agent’s rights under the First
Lien Documents.
     (c) The First Lien Agent shall not have by reason of the Second Lien
Security Agreement or this Agreement or any other document a fiduciary
relationship in respect of the Second Lien Agent or any Second Lien Lender.
     (d) Upon the Discharge of First Lien Obligations, the Control Agent shall
deliver to the Second Lien Agent the Control Collateral together with any
necessary endorsements (or otherwise allow the Second Lien Agent to obtain
control of such Control Collateral) or as a court of competent jurisdiction may
otherwise direct.
     (e) Upon the Discharge of the Second Lien Obligations, the Control Agent
shall deliver to the applicable Borrower or Guarantor the Control Collateral
together with any necessary endorsements or as a court of competent jurisdiction
may otherwise direct.
     SECTION 5.6. Inspection Rights. Subject to the First Lien Documents and the
Second Lien Documents, and solely between the First Lien Agent and the First
Lien Lenders, on the one hand, and the Second Lien Agent and the Second Lien
Lenders, on the other hand,
     (a) the First Lien Agent and its representatives and invitees may at any
time inspect, repossess, remove and otherwise deal with the Common Collateral,
and the First Lien Agent may advertise and conduct public auctions or private
sales of any Common Collateral, in each case without notice to (except as
provided in Section 7.5), the involvement of or interference by the Second Lien
Agent or any Second Lien Lender or liability to the Second Lien Agent or any
Second Lien Lender.
     (b) The Second Lien Agent may inspect the Common Collateral, in accordance
with Second Lien Documents, so long as such inspection does not interfere with
the rights of the First Lien Agent under Section 3.1 or under the First Lien
Documents.
ARTICLE VI
INSOLVENCY OR LIQUIDATION PROCEEDINGS
     SECTION 6.1. Financing and Sale Issues. If any Borrower or any Guarantor
shall be subject to any Insolvency or Liquidation Proceeding and at any time
prior to the Discharge of First Lien Obligations the First Lien Agent or the
First Lien Lenders shall desire to permit (or not object to) the sale, use or
lease of cash collateral or to permit (or not object to) any Borrower to obtain
financing under Section 363 or Section 364 of the Bankruptcy Code or to provide
such financing (“DIP Financing”), then, so long as the maximum amount of
Indebtedness that may be incurred in connection with such DIP Financing shall
not exceed an amount equal to the Maximum First Lien Principal Debt Amount, then
the Second Lien Agent, on behalf of itself and the Second Lien Lenders, and each
Second Lien Lender by becoming a Second Lien Lender, agrees that it will raise
no objection to, nor support any other Person objecting to, such sale, use, or
lease of cash collateral or DIP Financing and will not request any form of
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adequate protection or any other relief in connection therewith (except as
agreed by the First Lien Agent or to the extent expressly permitted by
Section 6.3) and, to the extent the Liens securing the First Lien Obligations
are subordinate to or pari passu with such DIP Financing, it (x) will
subordinate (and will be deemed hereunder to have subordinated) the Liens
securing the Second Lien Obligations (x) to such DIP Financing with, if
applicable, the same terms and conditions as the Liens securing the First Lien
Obligations are subordinated thereto (and such subordination will not alter in
any manner the terms of this Agreement), (y) to any adequate protection provided
to the First Lien Agent and the First Lien Lenders and (z) to any “carve-out”
for professionals and United States Trustee fees agreed to by the First Lien
Agent or the First Lien Lenders, and (ii) agrees that notice received four
(4) calendar days prior to the entry of an order approving such usage of cash
collateral or approving such financing shall be adequate notice. The Second Lien
Agent, on behalf of itself and the Second Lien Lenders, agrees that it will
raise no objection to or oppose a sale or other disposition of any Common
Collateral free and clear of its Liens or other claims under Section 363 of the
Bankruptcy Code (or otherwise) if the First Lien Required Lenders have consented
to (or supported) such sale or disposition of such assets so long as the
respective interests of the Second Lien Lenders attach to the proceeds thereof,
subject to the terms of this Agreement.
     SECTION 6.2. Relief from the Automatic Stay. Until the date upon which the
Discharge of First Lien Obligations shall have occurred, the Second Lien Agent,
on behalf of itself and the Second Lien Lenders, agrees that none of them shall
seek relief from the automatic stay or any other stay in any Insolvency or
Liquidation Proceeding in respect of any Common Collateral, without the prior
written consent of the First Lien Agent and the First Lien Required Lenders.
     SECTION 6.3. Adequate Protection. The Second Lien Agent, on behalf of
itself and the Second Lien Lenders, agrees that none of them shall object,
contest, or support any other Person objecting to or contesting, (i) any request
by the First Lien Agent or the First Lien Lenders for adequate protection or
(ii) any objection by the First Lien Agent or any First Lien Lender to any
motion, relief, action or proceeding based on a claim of a lack of adequate
protection or (iii) the payment of interest, fees, expenses or other amounts to
the First Lien Agent or any First Lien Lender under Section 506(b) or 506(c) of
the Bankruptcy Code or otherwise. Notwithstanding anything contained in this
Section and in Section 6.1, in any Insolvency or Liquidation Proceeding, (x) the
Second Lien Agent and the Second Lien Lenders, may seek, support, accept or
retain adequate protection (A) only if the First Lien Agent and the First Lien
Lenders are granted adequate protection that includes replacement liens on
additional collateral and superpriority claims and the First Lien Agent and the
First Lien Lenders do not object to the adequate protection being provided to
the First Lien Agent and the First Lien Lenders and (B) in the form of (1) a
replacement Lien on such additional collateral, subordinated to the Liens
securing the First Lien Obligations and such DIP Financing on the same basis as
the other Liens securing the Second Lien Obligations are so subordinated to the
First Lien Obligations under this Agreement and (y) superpriority claims junior
in all respects to the superpriority claims granted to the First Lien Agent and
the First Lien Lenders, and (2) in the event the Second Lien Agent, on behalf of
itself and the Second Lien Lenders, receives adequate protection, including in
the form of additional collateral, then the Second Lien Agent, on behalf of
itself or any of the Second Lien Lenders, agrees that the First Lien Agent shall
have a senior Lien and claim on such adequate protection as security for the
First Lien Obligations and that any Lien on any
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additional collateral securing the Second Lien Obligations shall be subordinated
to the Liens on such collateral securing the First Lien Obligations and any DIP
Financing (and all Obligations relating thereto) and any other Liens granted to
the First Lien Agent and the First Lien Lenders as adequate protection, with
such subordination to be on the same terms that the other Liens securing the
Second Lien Obligations are subordinated to such First Lien Obligations under
this Agreement. Notwithstanding the foregoing, if the First Lien Lenders are
deemed by a court of competent jurisdiction to be fully secured on the petition
date, then the Second Lien Lenders shall not be prohibited from seeking adequate
protection in the form of interest, fees or other cash payments.
     SECTION 6.4. No Waiver. Nothing contained herein shall prohibit or in any
way limit the First Lien Agent or any First Lien Lender from objecting in any
Insolvency or Liquidation Proceeding or otherwise to any action taken by the
Second Lien Agent or any of the Second Lien Lenders, including, without
limitation, the seeking by the Second Lien Agent or any Second Lien Lender of
adequate protection or the asserting by the Second Lien Agent or any Second Lien
Lender of any of its rights and remedies under the Second Lien Documents or
otherwise, unless, in each case, such action is consistent with the terms of
this Section 6.
     SECTION 6.5. Preference Issues. If the First Lien Agent or any First Lien
Lender is required in any Insolvency or Liquidation Proceeding or otherwise to
turn over or otherwise pay to the estate of the First Lien Borrower or any First
Lien Guarantor any amount (whether received by or on behalf of the First Lien
Borrower or any First Lien Guarantor, as proceeds of security, enforcement of
any right of setoff or otherwise) (a “Recovery”), then the obligation or part
thereof originally intended to be satisfied shall be reinstated and outstanding
as First Lien Obligations as if such payment had not occurred to the extent of
such Recovery and the Discharge of First Lien Obligations shall be deemed to not
have occurred. If this Agreement shall have been terminated prior to such
Recovery, this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations of the parties hereto from such date of reinstatement.
The Second Lien Agent and the Second Lien Lenders agree that none of them shall
be entitled to benefit from any avoidance action affecting or otherwise relating
to any distribution or allocation made in accordance with this Agreement,
whether by preference or otherwise, it being understood and agreed that the
benefit of such avoidance action otherwise allocable to them shall instead be
allocated and turned over for application in accordance with the priorities set
forth in this Agreement. In the event that any such payment with respect to the
First Lien Obligations results in a Discharge of First Lien Obligations, the
First Lien Agent and the First Lien Lenders agree that the Second Lien Agent and
the Second Lien Lenders shall be permitted to act hereunder as though a
Discharge of First Lien Obligations had occurred during the period from such
payment until the date of such reinstatement of the First Lien Obligations and
shall have no liability to the First Lien Agent or the First Lien Lenders for
any action taken or omitted to be taken hereunder in accordance therewith,
except to the extent such act or omission is found by a final, non-appealable
judgment of a court of competent jurisdiction to arise from the gross
negligence, bad faith or willful misconduct of the Second Lien Agent or Second
Lien Lenders.
     SECTION 6.6. Separate Grants of Security and Separate Classification. The
Second Lien Agent on behalf of itself and the Second Lien Lenders acknowledges
and agrees that (i) the
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grants of Liens pursuant to the First Lien Collateral Documents and the Second
Lien Collateral Documents constitute two separate and distinct grants of Liens
and (ii) because of, among other things, their differing rights in the Common
Collateral, the Second Lien Obligations are fundamentally different from the
First Lien Obligations and must be separately classified in any plan of
reorganization proposed or adopted in an Insolvency or Liquidation Proceeding.
To further effectuate the intent of the parties as provided in the immediately
preceding sentence, if it is held that the claims of the First Lien Agent and
the First Lien Lenders and the Second Lien Agent and the Second Lien Lenders in
respect of the Common Collateral constitute only one secured claim (rather than
separate classes of senior and junior secured claims), then the Second Lien
Agent on behalf of itself and the Second Lien Lenders hereby acknowledges and
agrees that all distributions shall be made as if there were separate classes of
senior and junior secured claims against the Borrowers and the Guarantors in
respect of the Common Collateral (with the effect being that, to the extent that
the aggregate value of the Common Collateral is sufficient (for this purpose
ignoring all claims held by the Second Lien Agent and the Second Lien Lenders),
the First Lien Agent and the First Lien Lenders shall be entitled to receive, in
addition to amounts distributed to them in respect of principal, pre-petition
interest and other claims, all amounts owing in respect of post-petition
interest before any distribution is made in respect of the claims held by the
Second Lien Agent and the Second Lien Lenders, with the Second Lien Agent and
the Second Lien Lenders hereby acknowledging and agreeing to turn over to the
First Lien Agent and the First Lien Lenders amounts otherwise received or
receivable by them to the extent necessary to effectuate the intent of this
sentence, even if such turnover has the effect of reducing the claim or recovery
of the Second Lien Agent and the Second Lien Lenders).
     SECTION 6.7. Other Matters. To the extent that the Second Lien Agent or any
Second Lien Lender has or acquires rights under Section 363 or Section 364 of
the Bankruptcy Code with respect to any of the Common Collateral, the Second
Lien Agent agrees, on behalf of itself and the Second Lien Lenders not to assert
any of such rights without the prior written consent of the First Lien Agent;
provided that if requested by the First Lien Agent, the Second Lien Agent shall
timely exercise such rights in the manner requested by the First Lien Agent,
including any rights to payments in respect of such rights.
     SECTION 6.8. Effectiveness in Insolvency or Liquidation Proceedings. This
Agreement, which the parties hereto expressly acknowledge is a “subordination
agreement” under Section 510(a) of the Bankruptcy Code, shall be effective
before, during and after the commencement of an Insolvency or Liquidation
Proceeding. All references in this Agreement to any Borrower or any Guarantor
shall include such Person as a debtor-in-possession and any receiver or trustee
for such Person in any Insolvency or Liquidation Proceeding.
ARTICLE VII
RELIANCE; WAIVERS; NOTICES; ETC
     SECTION 7.1. Reliance.
     (a) The consent by the First Lien Lenders to the execution and delivery of
the Second Lien Documents and the grant to the Second Lien Agent on behalf of
the Second Lien Lenders of a Lien on the Common Collateral and all loans and
other extensions of
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credit made or deemed made on and after the date hereof by the First Lien
Lenders to the First Lien Borrower shall be deemed to have been given and made
in reliance upon this Agreement. The Second Lien Agent, on behalf of the Second
Lien Lenders, acknowledges that the Second Lien Lenders have, independently and
without reliance on the First Lien Agent or any First Lien Lender, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into the Second Lien Financing Agreement, the
other Second Lien Documents, this Agreement and the transactions contemplated
hereby and thereby and they will continue to make their own credit decision in
taking or not taking any action under the Second Lien Financing Agreement, the
other Second Lien Documents or this Agreement.
     (b) The consent by the Second Lien Lenders to the execution and delivery of
the First Lien Documents and the grant to the First Lien Agent on behalf of the
First Lien Lenders of a Lien on the Common Collateral and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
Second Lien Lenders to the Second Lien Borrower shall be deemed to have been
given and made in reliance upon this Agreement. The First Lien Agent, on behalf
of the First Lien Lenders, acknowledges that the First Lien Lenders have,
independently and without reliance on the Second Lien Agent or any Second Lien
Lender, and based on documents and information deemed by them appropriate, made
their own credit analysis and decision to enter into the First Lien Financing
Agreement, the other First Lien Documents, this Agreement and the transactions
contemplated hereby and thereby and they will continue to make their own credit
decision in taking or not taking any action under the First Lien Financing
Agreement, the other First Lien Documents or this Agreement.
     SECTION 7.2. No Warranties or Liability.
     (a) The Second Lien Agent, on behalf of itself and the Second Lien Lenders,
acknowledges and agrees that each of the First Lien Agent and the First Lien
Lenders has made no express or implied representation or warranty, including,
without limitation, with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the First Lien
Documents. The First Lien Lenders will be entitled to manage and supervise their
respective loans and extensions of credit to the First Lien Borrower in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate, and the First Lien Lenders may manage their loans and extensions of
credit without regard to any rights or interests that the Second Lien Agent or
any of the Second Lien Lenders have in the Common Collateral or otherwise,
except as otherwise provided in this Agreement. Neither the First Lien Agent nor
any First Lien Lender shall have any duty to the Second Lien Agent or any of the
Second Lien Lenders to act or refrain from acting in a manner which allows, or
results in, the occurrence or continuance of an event of default or default
under any agreements with any Borrower or any Guarantor (including, without
limitation, the Second Lien Documents), regardless of any knowledge thereof
which they may have or be charged with.
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     (b) The First Lien Agent, on behalf of itself and the First Lien Lenders,
acknowledges and agrees that each of the Second Lien Agent and the Second Lien
Lenders has made no express or implied representation or warranty, including,
without limitation, with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any of the Second Lien
Documents. The Second Lien Lenders will be entitled to manage and supervise
their respective loans to the Second Lien Borrower in accordance with law and as
they may otherwise, in their sole discretion, deem appropriate, and the Second
Lien Lenders may manage their loans and extensions of credit without regard to
any rights or interests that the First Lien Agent or any of the First Lien
Lenders have in the Common Collateral or otherwise, except as otherwise provided
in this Agreement. Neither the Second Lien Agent nor any Second Lien Lender
shall have any duty to the First Lien Agent or any of the First Lien Lenders to
act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any agreements
with any Borrower or any Guarantor (including, without limitation, the First
Lien Documents), regardless of any knowledge thereof which they may have or be
charged with.
     SECTION 7.3. No Waiver of Lien Priorities.
     (a) No right of the First Lien Lenders, the First Lien Agent or any of them
to enforce any provision of this Agreement shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the First
Lien Borrower or the First Lien Guarantors or by any act or failure to act by
any First Lien Lender or the First Lien Agent, or by any noncompliance by any
Person with the terms, provisions and covenants of this Agreement, any of the
First Lien Documents or any of the Second Lien Documents, regardless of any
knowledge thereof which the First Lien Agent or the First Lien Lenders, or any
of them, may have or be otherwise charged with.
     (b) Without in any way limiting any other provision hereof, (but subject to
the rights of the First Lien Borrower and the First Lien Guarantors under the
First Lien Documents and the proviso set forth in the definition of the term
“First Lien Financing Agreement”), the First Lien Lenders, the First Lien Agent
and any of them, may, at any time and from time to time, without the consent of
the Second Lien Agent or any Second Lien Lender, without impairing or releasing
the lien priorities and other benefits provided in this Agreement (even if any
right of subrogation or other right or remedy of the Second Lien Agent or any
Second Lien Lender is affected, impaired or extinguished thereby) do any one or
more of the following:
     (i) make loans and advances to the First Lien Borrower or any First Lien
Guarantor or issue, guaranty or obtain letters of credit for the account of any
such Person or otherwise extend credit to any such Person, in any amount and on
any terms, whether pursuant to a commitment or as a discretionary advance and
whether or not any default or event of default or failure of condition is then
continuing;
     (ii) change the manner, place or terms of payment or change or extend the
time of payment of, or renew, exchange, amend, increase or alter, the terms of
any of the First
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Lien Obligations or any Lien on any First Lien Collateral or guaranty thereof or
any liability of the First Lien Borrower or any First Lien Guarantor, or any
liability incurred directly or indirectly in respect thereof (including, without
limitation, any increase in or extension of the First Lien Obligations, without
any restriction as to the amount, tenor or terms of any such increase or
extension) or otherwise amend; renew, exchange, extend, modify or supplement in
any manner any Liens held by the First Lien Lenders, the First Lien Obligations
or any of the First Lien Documents; provided, however, nothing herein shall
prohibit the Second Lien Agent and the Second Lien Lenders from enforcing any
rights arising under the Second Lien Financing Agreement as a result of Second
Lien Borrower’s or any Second Lien Guarantors’ violation of the terms thereof
including any covenant prohibiting the amendment of certain provisions of the
First Lien Financing Agreement, subject in each case to this Agreement;
     (iii) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any part of the First Lien
Collateral or any liability of the First Lien Borrower or any First Lien
Guarantor to the First Lien Lenders or the First Lien Agent, or any liability
incurred directly or indirectly in respect thereof;
     (iv) settle or compromise any First Lien Obligation or any other liability
of the First Lien Borrower or any First Lien Guarantor or any security therefor
or any liability incurred directly or indirectly in respect thereof and apply
any sums by whomsoever paid and however realized to any liability (including,
without limitation, the First Lien Obligations) in any manner or order;
     (v) exercise or delay in or refrain from exercising any right or remedy
against the First Lien Borrower or any security or any First Lien Guarantor or
any other Person, elect any remedy and otherwise deal freely with the First Lien
Borrower, any First Lien Guarantor and the First Lien Collateral and any
security and any guarantor or any liability of the First Lien Borrower or any
First Lien Guarantor to the First Lien Lenders or any liability incurred
directly or indirectly in respect thereof;
     (vi) release or discharge any First Lien Obligations or any guaranty
thereof or any agreement or obligation of the First Lien Borrower or First Lien
Guarantor or any other Person or entity with respect thereto;
     (vii) take or fail to take any Lien on any First Lien Collateral or any
other collateral security for any First Lien Obligations or take or fail to take
any action which may be necessary or appropriate to ensure than any Lien on any
First Lien Collateral or any other Lien upon any property is duly enforceable or
perfected or entitled to priority as against any other Lien or to ensure that
any proceeds of any property subject to any Lien are applied to the payment of
any First Lien Obligations or any other obligation secured thereby; or
     (viii) otherwise release, discharge or permit the lapse of any or all First
Lien Obligations or any other Liens upon any property at any time securing any
First Lien Obligations.
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     (c) The Second Lien Agent, on behalf of itself and the Second Lien Lenders,
also agrees that the First Lien Lenders and the First Lien Agent shall have no
liability to the Second Lien Agent or any Second Lien Lender, and the Second
Lien Agent, on behalf of itself and the Second Lien Lenders, hereby waives any
claim against any First Lien Lender or the First Lien Agent, arising out of any
and all actions which the First Lien Lenders or the First Lien Agent may take or
permit or omit to take with respect to: (i) the First Lien Documents, (ii) the
collection of the First Lien Obligations or (iii) the perfection, release,
failure to act upon, foreclosure upon, or sale, liquidation or other disposition
of, the First Lien Collateral; provided that notwithstanding the foregoing, the
First Lien Agent shall be liable for damages resulting from actions taken by it
in violation of any provision of this Agreement to the extent such violation is
found by a final, non-appealable judgment of a court of competent jurisdiction
to arise from its gross negligence, bad faith or willful misconduct. The Second
Lien Agent, on behalf of itself and the Second Lien Lenders, agrees that the
First Lien Lenders and the First Lien Agent have no duty to them in respect of
the maintenance or preservation of the First Lien Collateral or the First Lien
Obligations.
     (d) The Second Lien Agent, on behalf of itself and the Second Lien Lenders,
agrees not to assert and hereby waives, to the fullest extent permitted by law,
any right to demand, request, plead or otherwise assert or otherwise claim the
benefit of, any marshalling, appraisal, valuation or other similar right that
may otherwise be available under applicable law or any other similar rights a
junior secured creditor may have under applicable law.
     SECTION 7.4. Obligations Unconditional. All rights, interests, agreements
and obligations of the First Lien Agent and the First Lien Lenders and the
Second Lien Agent and the Second Lien Lenders, respectively, hereunder shall
remain in full force and effect as set forth herein irrespective of:
     (a) any lack of validity or enforceability of the First Lien Documents or
any Second Lien Documents;
     (b) any change in the time, manner or place of payment of, or in any other
terms of, all or any of the First Lien Obligations or Second Lien Obligations,
or any amendment or waiver or other modification, including, without limitation,
any increase in the amount thereof, whether by course of conduct or otherwise,
of the terms of the First Lien Financing Agreement or any other First Lien
Document or of the terms of the Second Lien Financing Agreement or any other
Second Lien Document;
     (c) any compromise, surrender, release, non-perfection or exchange of any
security interest in any Common Collateral or any other collateral, or any
amendment, waiver or other modification, whether in writing or by course of
conduct or otherwise, of all or any of the First Lien Obligations or Second Lien
Obligations or any guarantee thereof;
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     (d) the commencement of any Insolvency or Liquidation Proceeding in respect
of any Borrower or any Guarantor; or
     (e) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, any Borrower or any Guarantor in respect of the
First Lien Obligations or of the Second Lien Agent or any Second Lien Lender or
Second Lien Obligations in respect of this Agreement other than a defense of
performance in full, or payment in full in cash, of the First Lien Obligations.
     SECTION 7.5. Certain Notices.
     (a) Promptly upon the satisfaction of the conditions set forth in clauses
(i), (ii), (iii), and (iv) of the definition of Discharge of First Lien
Obligations, the First Lien Agent shall deliver the notice contemplated by
clause (v) of said definition.
     (b) Promptly upon (or as soon as practicable following) the commencement by
the First Lien Agent of any enforcement action with respect to any Common
Collateral (including by way of a public or private sale of Collateral), the
First Lien Agent shall notify the Second Lien Agent of such action; provided
that the failure to give any such notice shall not result in any liability of
the First Lien Agent hereunder or in the modification, alteration, impairment,
or waiver of the rights of any party hereunder.
ARTICLE VIII
MISCELLANEOUS
     SECTION 8.1. Conflicts. In the event of any conflict between the provisions
of this Agreement and the provisions of the First Lien Documents or the Second
Lien Documents regarding solely the relative rights and obligations between the
First Lien Agent and the First Lien Lenders on the one hand and the Second Lien
Agent and the Second Lien Lenders on the other, respectively, the provisions of
this Agreement shall govern.
     SECTION 8.2. Waiver of Consequential Damages. No party shall be liable for
any special, indirect, consequential or punitive damages in connection with this
Agreement regardless of whether such damages were contemplated and regardless of
the form of action.
     SECTION 8.3. Continuing Nature of this Agreement. This Agreement shall
continue to be effective notwithstanding the Discharge of the First Lien
Obligations. This is a continuing agreement of lien priorities and the First
Lien Lenders may continue, at any time and without notice to the Second Lien
Agent or any Second Lien Lender, to extend credit and other financial
accommodations and lend monies to or for the benefit of the First Lien Borrower
and First Lien Guarantors constituting First Lien Obligations on the faith
hereof. The Second Lien Agent, on behalf of itself and the Second Lien Lenders,
hereby waives any right it may have under applicable law to revoke this
Agreement or any of the provisions of this Agreement. The terms of this
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding.
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     SECTION 8.4. Amendments; Waivers. No amendment to or waiver of any
provision of this Agreement, nor consent to any departure by any Person from its
obligations under this Agreement, shall in any event be effective unless the
same shall be in writing and signed by the First Lien Agent and the Second Lien
Agent, each acting upon the direction of the First Lien Lenders or Second Lien
Lenders as set forth in the applicable Credit Agreement. Each waiver, if any,
shall be a waiver only with respect to the specific instance involved and shall
in no way impair the rights of the parties making such waiver or the obligations
of the other parties to such party in any other respect or at any other time.
Neither any Borrower nor any Guarantor shall have any right to amend, modify or
waive any provision of this Agreement without the consent of the Second Lien
Agent then party hereto or the First Lien Agent then party hereto, as
applicable, nor shall any consent or signed writing be required of any of them
to effect any amendment, modification or waiver of any provision of this
Agreement, except that no amendment, modification or waiver affecting any
obligation or right of any Borrower or any Guarantor hereunder shall be made
without the written consent of the applicable Borrower. The First Lien Agent
shall give prompt notice to the First Lien Borrower of each amendment,
modification or waiver hereunder that does not require the consent of the First
Lien Borrower, but the failure to give such notice shall not affect the validity
of each such amendment, modification or waiver.
     SECTION 8.5. Information Concerning Financial Condition of the Borrowers,
Guarantors and their Subsidiaries.
     (a) The First Lien Lenders, on the one hand, and the Second Lien Lenders,
on the other hand, shall each be responsible for keeping themselves informed of
(i) the financial condition of the Borrowers, Guarantors and their Subsidiaries
and all endorsers and/or guarantors of the Second Lien Obligations or the First
Lien Obligations and (ii) all other circumstances bearing upon the risk of
nonpayment of the Second Lien Obligations or the First Lien Obligations. The
First Lien Agent and the First Lien Lenders shall have no duty to advise the
Second Lien Agent or any Second Lien Lender of information known to it or them
regarding such condition or any such circumstances or otherwise. In the event
the First Lien Agent or any of the First Lien Lenders, in its or their sole
discretion, undertakes at any time or from time to time to provide any such
information to the Second Lien Agent or any Second Lien Lender, it or they shall
be under no obligation (x) to provide any additional information or to provide
any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential.
     (b) The Second Lien Agent and the Second Lien Lenders shall have no duty to
advise the First Lien Agent or any First Lien Lender of information known to it
or them regarding such condition or any such circumstances or otherwise. In the
event the Second Lien Agent or any of the Second Lien Lenders, in its or their
sole discretion, undertakes at any time or from time to time to provide any such
information to the First Lien Agent or any First Lien Lender, it or they shall
be under no obligation (i) to provide any additional information or to provide
any such information on any subsequent occasion, (ii) to undertake any
investigation or (iii) to disclose any
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information which, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential.
     SECTION 8.6. Subrogation. The Second Lien Agent, on behalf of itself and
the Second Lien Lenders, hereby waives any rights of subrogation it may acquire
as a result of any payment hereunder until the date upon which the Discharge of
First Lien Obligations shall have occurred.
     SECTION 8.7. Application of Payments. As between the First Lien Lenders and
the Second Lien Lenders, all payments received by the First Lien Lenders may be
applied, reversed and reapplied, in whole or in part, to such part of the First
Lien Obligations as the First Lien Lenders, in their sole discretion, deem
appropriate.
     SECTION 8.8. Consent to Jurisdiction; Waivers.
     (a) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO IN CONNECTION
HEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH
PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK
AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 8.9. EACH PARTY HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY PARTY HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT.
     (b) EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO IN
CONNECTION HEREWITH. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED
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FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE OTHER PARTIES HERETO ENTERING INTO THIS AGREEMENT.
     SECTION 8.9. Notices; Time. All notices and other communications provided
under this Agreement shall be in writing or by facsimile and addressed,
delivered or transmitted, if to the Borrowers, the First Lien Agent, the Second
Lien Agent or the Control Agent at its address or facsimile number set forth on
Schedule I hereto or at such other address or facsimile number as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received. Any notice, if
transmitted by facsimile, shall be deemed given when the confirmation of
transmission thereof is received by the transmitter. Except as set forth below,
electronic mail and Internet and intranet websites may be used only to
distribute routine communications among the parties and for the distribution and
execution of documentation for execution by the parties thereto, and may not be
used for any other purpose. Notwithstanding the foregoing, the parties hereto
agree that delivery of an executed counterpart of a signature page to this
Agreement by facsimile (or other electronic) transmission shall be effective as
delivery of an original executed counterpart of this Agreement. Unless otherwise
indicated, all references herein to the time of a day shall refer to New York
time.
     SECTION 8.10. Further Assurances. The Second Lien Agent, on behalf of
itself and the Second Lien Lenders, agrees that each of them shall take such
further action and shall execute and deliver to the First Lien Agent and the
First Lien Lenders such additional documents and instruments (in recordable
form, if requested) as the First Lien Agent or the First Lien Lenders may
reasonably determine to be required or appropriate to effectuate the terms of
and the lien priorities contemplated by this Agreement; provided that any
reasonable and documented out-of-pocket costs and expenses incurred by the
Second Lien Agent in connection therewith shall be reimbursable by the Second
Lien Borrower or the Second Lien Guarantors to the extent provided under the
Second Lien Documents.
     SECTION 8.11. Governing Law. THIS AGREEMENT WILL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK).
     SECTION 8.12. Binding on Successors and Assigns.
     (a) This Agreement shall be binding upon the First Lien Agent, the First
Lien Lenders, the Second Lien Agent, the Second Lien Lenders and their
respective permitted successors and assigns.
     (b) Upon a Person becoming the First Lien Agent as described in the
definition of “First Lien Agent” hereunder (other than the First Lien Agent
referred to in the recitals hereto), such new First Lien Agent shall
automatically become the First Lien Agent hereunder with all the rights and
powers of such party hereunder, and bound by the provisions hereof, without the
need for any further action on the part of any party hereto.
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     (c) Upon a successor administrative agent, collateral agent or trustee
becoming the Second Lien Agent under the Second Lien Financing Agreement or any
Second Lien Document, such successor automatically shall become the Second Lien
Agent hereunder with all the rights and powers of the Second Lien Agent
hereunder, and bound by the provisions hereof, without the need for any further
action on the part of any party hereto.
     SECTION 8.13. Specific Performance. The First Lien Agent may demand
specific performance of this Agreement. The Second Lien Agent, on behalf of
itself and the Second Lien Lenders hereby irrevocably waives any defense based
on the adequacy of a remedy at law and any other defense which might be asserted
to bar the remedy of specific performance in any action which may be brought by
the First Lien Agent.
     SECTION 8.14. Section Titles; Time Periods. The various headings contained
in this Agreement are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or any provisions hereof. In the
computation of time periods, unless otherwise specified, the word “from” means
“from and including” and each of the words “to” and “until” means “to but
excluding” and the word “through” means “to and including”.
     SECTION 8.15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document.
     SECTION 8.16. Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
     SECTION 8.17. No Third Party Beneficiaries. This Agreement and the rights
and benefits hereof shall inure to the benefit of the First Lien Agent and the
First Lien Lenders and their respective successors (including as a result of a
refinancing) and assigns and, to the extent applicable, the Borrowers, the
Guarantors, the Second Lien Agent and the Second Lien Lenders and their
respective permitted successors (including as a result of a refinancing) and
assigns. No other Person, shall have or be entitled to assert rights or benefits
hereunder.
     SECTION 8.18. Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to any Borrower or any Guarantor shall include such
Borrower or such Guarantor as debtor and debtor-in-possession and any receiver
or trustee for such Borrower or such Guarantor (as the case may be) in any
Insolvency or Liquidation Proceeding.
     SECTION 8.19. Rights of Agents. (a) The rights, protections, privileges and
immunities, without duplication, including rights of indemnification,
compensation and reimbursement, of the First Lien Agent, the Second Lien Agent
and the Control Agent, shall be the same as those applicable to the First Lien
Agent under the Pledge and Security Agreement, dated as of September 5, 2006,
among the First Lien Borrower, the Guarantors named therein and the First Lien
Agent, and such provisions are hereby incorporated herein as if specifically set
forth herein.
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     (b) The parties hereto agree that whenever this Agreement requires or
otherwise makes reference to the consent, discretion, agreement, approval,
judgment, or any other similar term contemplating an act, or omission to act, by
the First Lien Agent, the Second Lien Agent or the Control Agent, such Agents
will only so act, or omit to act, upon the specific written direction of the
First Lien Required Lenders, the First Lien Administrative Agent, the Second
Lien Required Lenders or the Second Lien Administrative, as the case may be, and
in the absence of such direction, such Agents shall have no liability whatsoever
for their failure to act.
     (c) The provisions of this Section 8.19 shall survive the termination of
this Agreement.
(Signature Pages Follow)
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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
CITIBANK, N.A., as First Lien Agent
388 Greenwich Street
14th Floor
New York, New York 10013
Attn: Agency & Trust
Fax: (212) 657-2762

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

CITIBANK, N.A., as Second Lien Agent
388 Greenwich Street
14th Floor
New York, New York 10013
Attn: Agency & Trust
Fax: (212) 657-2762

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

CITIBANK, N.A., as Control Agent
388 Greenwich Street
14th Floor
New York, New York 10013
Attn: Agency & Trust
Fax: (212) 657-2762

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

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HANESBRANDS INC., as the First Lien
Borrower and a Second Lien Guarantor

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HBI BRANDED APPAREL LIMITED, INC.,
as the Second Lien Borrower and a First
Lien Guarantor

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

Guarantors:
HANESBRANDS DIRECT, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

UPEL, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

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CARIBETEX, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

SEAMLESS TEXTILES, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

BA INTERNATIONAL, L.L.C.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HBI INTERNATIONAL, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HBI BRANDED APPAREL ENTERPRISES, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

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CASA INTERNATIONAL, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

UPCR, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HBI SOURCING, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HBI PLAYTEX BATH LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

CEIBENA DEL, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

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NT INVESTMENT COMPANY, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HANESBRANDS DISTRIBUTION, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

CARIBESOCK, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

NATIONAL TEXTILES, L.L.C.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

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HANES PUERTO RICO, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

PLAYTEX INDUSTRIES, INC.

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

INNER SELF LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

PLAYTEX DORADO, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

HANES MENSWEAR, LLC

             
 
  By:        
 
  Name:  
 
   
 
  Title:        

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SCHEDULE I
Notice Information (Pursuant to Section 8.9)
NOTICE ADDRESS FOR THE BORROWERS:
Hanesbrands Inc./ HBI Branded Apparel Limited, Inc.
1000 East Hanes Mill Rd
Winston Salem, NC 27105
Attn: General Counsel
NOTICE ADDRESS FOR ADMINISTRATIVE AGENT:
Citicorp USA, Inc.
2 Penns Way
Suite 100
New Castle, De 19720
Attention: Carin Seals
Fax: (302) 894-6076
Phone: (212) 994-0967
E-mail: carin.seals@citigroup.com
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EXHIBIT I
CLOSING DATE CERTIFICATE
HBI BRANDED APPAREL LIMITED, INC.
September 5, 2006
     This certificate is delivered pursuant to Section 5.2 of the Second Lien
Credit Agreement, dated as of September 5, 2006 (the “Credit Agreement”), among
HBI Branded Apparel Limited, Inc., a Delaware corporation (the “Borrower”),
Hanesbrands Inc. (the “Company”), the Lenders, HSBC Bank USA, National
Association, LaSalle Bank National Association and Barclays Bank PLC, as the
Co-Documentation Agents, Merrill Lynch Pierce, Fenner & Smith Incorporated and
Morgan Stanley Senior Funding, Inc., as the Co-Syndication Agents, Citicorp USA,
Inc., as the Administrative Agent, Citibank, N.A., as the Collateral Agent, and
Merrill Lynch Pierce, Fenner & Smith Incorporated and Morgan Stanley Senior
Funding, Inc., as the joint lead arrangers and joint bookrunners (in such
capacities, the “Lead Arrangers”). Capitalized terms used herein that are
defined in the Credit Agreement, unless otherwise defined herein, have the
meanings provided (or incorporated by reference) in the Credit Agreement.
     Each of the undersigned Authorized Officers, in each case, solely in such
capacity and not as an individual, hereby certifies, represents and warrants
that, as of the Closing Date:
     1. Consummation of Transactions. (a) All actions necessary to consummate
the Transaction (other than the entering into of the Senior Note Documents and
the issuance of the Senior Notes) have been taken in accordance in all material
respects with all applicable law and in accordance with the terms of each
applicable Transaction Document, without amendment or waiver of any material
provision thereof, unless approved by the Lead Arrangers in their reasonable
discretion.
     (b) Attached hereto as Annex I are true and correct copies of the material
First Lien Loan Documents which are in full force and effect and pursuant to
which the Company will incur $[___]1 of credit extensions thereunder on the
Closing Date.
     (c) Attached hereto as Annex II are true and correct copies of the material
Bridge Loan Documents which are in full force and effect and pursuant to which
the Company will borrow $500,000,000 in loans thereunder on the Closing Date.
     2. Litigation, etc. There exists no action, suit, investigation, litigation
or proceeding pending or threatened in writing in any court or before any
arbitrator or governmental or regulatory agency or authority that could
reasonably be expected to have a Material Adverse Effect.
     3. Approval. All material and necessary governmental and third party
consents and approvals have been obtained (without the imposition of any
material and adverse conditions that
 

1   To be confirmed.

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are not reasonably acceptable to the Lenders) and remain in effect and all
applicable waiting periods have expired without any material and adverse action
being taken by any competent authority.
     4. Debt Ratings. The Company has obtained a senior secured debt rating (of
any level) in respect of the Loans from each of S&P and Moody’s and such ratings
(of any level) are in effect as of the date hereof.
     5. Form 10. The financial information concerning the Branded Apparel
Business, the Borrower and the Company and its Subsidiaries contained in the
Company’s Form 10 filed with the Securities and Exchange Commission in
connection with the Spin-Off, including all amendments and modifications
thereto, is consistent in all material respects with the information previously
provided to the Lead Arrangers and the Lenders.

  6.   Compliance with Warranties, No Default, etc. The following statements are
true and correct as of the date hereof (after giving effect to the making of the
Loans):

     (a) the representations and warranties set forth in each Loan Document are,
in each case, true and correct in all material respects (unless stated to relate
solely to an earlier date, in which case such representations and warranties
were true and correct in all material respects as of such earlier date); and
     (b) no Default has occurred and is continuing.
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     IN WITNESS WHEREOF, the undersigned have caused this Closing Date
Certificate to be executed and delivered, and the certification, representations
and warranties contained herein, by their respective Authorized Officer, in each
case, are made solely in such capacity and not as an individual, as of the date
first written above.

            HBI BRANDED APPAREL LIMITED, INC.
      By:           Name:           Title:           HANESBRANDS INC.
      By:           Name:           Title:        

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Annex I
Material First Lien Loan Documents
Closing Date Certificate (Second Lien)

4

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Annex II
Material Bridge Loan Documents
Closing Date Certificate (Second Lien)

5