Exhibit 10.1
IMPORTANT NOTICE: The taking of this document or any certified copy or any
document which constitutes substitute documentation thereof, including written
confirmations or references thereto, into Austria as well as printing out any
e-mail communication which refers to this document in Austria or sending any
e-mail communication to which a pdf scan of this document is attached to an
Austrian addressee or sending any e-mail communication carrying an electronic or
digital signature which refers to this document to an Austrian addressee may
cause the imposition of Austrian stamp duty. Accordingly keep the original
document as well as all certified copies thereof and written and signed
references thereto outside of Austria and avoid printing out or sending any of
the aforementioned email communication to an Austrian addressee.
EXECUTION COPY
 
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
May 6, 2010,
among
LIZ CLAIBORNE, INC.,
MEXX EUROPE B.V.,
JUICY COUTURE EUROPE LIMITED,
and
LIZ CLAIBORNE CANADA INC.,
as Borrowers,
The GUARANTORS Party Hereto,
The LENDERS Party Hereto
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and US Collateral Agent,
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
as Canadian Administrative Agent and Canadian Collateral Agent,
J.P. MORGAN EUROPE LIMITED,
as European Administrative Agent and European Collateral Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND), NATIONAL
ASSOCIATION, SUNTRUST BANK and GENERAL ELECTRIC CAPITAL CORPORATION,
as Documentation Agents
 
J.P. MORGAN SECURITIES INC., BANC OF AMERICA SECURITIES LLC, WELLS FARGO
CAPITAL FINANCE, LLC and SUNTRUST ROBINSON HUMPHREY, INC.,
as Joint Lead Arrangers and Joint Bookrunners
 

 

 

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TABLE OF CONTENTS

              Page  
 
       
ARTICLE I Definitions
    1  
SECTION 1.01 Defined Terms
    1  
SECTION 1.02 Classification of Loans and Borrowings
    71  
SECTION 1.03 Terms Generally
    71  
SECTION 1.04 Accounting Terms; GAAP
    73  
SECTION 1.05 Currency Translations
    74  
 
       
ARTICLE II The Credits
    74  
SECTION 2.01 Commitments
    74  
SECTION 2.02 Loans and Borrowings
    75  
SECTION 2.03 Requests for Borrowing of Revolving Loans
    77  
SECTION 2.04 Protective Advances
    78  
SECTION 2.05 Swingline Loans
    80  
SECTION 2.06 Letters of Credit
    85  
SECTION 2.07 Funding of Borrowings
    90  
SECTION 2.08 Interest Elections
    91  
SECTION 2.09 Termination and Reduction of Commitments; Increase in Commitments
    93  
SECTION 2.10 Repayment of Loans; Evidence of Debt
    96  
SECTION 2.11 Prepayment of Loans
    98  
SECTION 2.12 Fees
    100  
SECTION 2.13 Interest
    101  
SECTION 2.14 Alternate Rate of Interest
    102  
SECTION 2.15 Increased Costs
    103  
SECTION 2.16 Break Funding Payments
    105  
SECTION 2.17 Taxes
    105  
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs
    110  
SECTION 2.19 Mitigation Obligations; Replacement of Lenders
    113  
SECTION 2.20 Returned Payments
    114  
SECTION 2.21 Bankers’ Acceptances
    114  
SECTION 2.22 Circumstances Making Bankers’ Acceptances Unavailable
    118  
SECTION 2.23 Defaulting Lenders
    119  
 
       
ARTICLE III Representations and Warranties
    121  
SECTION 3.01 Organization; Powers
    121  
SECTION 3.02 Authorization; Enforceability
    121  
SECTION 3.03 Governmental Approvals; No Conflicts
    122  
SECTION 3.04 Financial Condition; No Material Adverse Change
    122  
SECTION 3.05 Properties
    123  
SECTION 3.06 Litigation and Environmental Matters
    123  
SECTION 3.07 Compliance with Laws and Agreements
    123  
SECTION 3.08 Investment Company Status
    124  

 

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              Page  
SECTION 3.09 Taxes
    124  
SECTION 3.10 ERISA; Benefit Plans
    124  
SECTION 3.11 Disclosure
    126  
SECTION 3.12 No Default
    126  
SECTION 3.13 Solvency
    126  
SECTION 3.14 Insurance
    128  
SECTION 3.15 Capitalization and Subsidiaries
    128  
SECTION 3.16 Security Interest in Collateral
    128  
SECTION 3.17 Employment Matters
    128  
SECTION 3.18 Common Enterprise
    129  
SECTION 3.19 Centre of Main Interests
    129  
SECTION 3.20 Regulation H
    129  
SECTION 3.21 Certain Documents
    129  
 
       
ARTICLE IV Conditions
    129  
SECTION 4.01 Effective Date
    129  
SECTION 4.02 Each Credit Event
    134  
 
       
ARTICLE V Affirmative Covenants
    135  
SECTION 5.01 Financial Statements; Borrowing Base and Other Information
    135  
SECTION 5.02 Notices of Material Events
    139  
SECTION 5.03 Existence; Conduct of Business
    140  
SECTION 5.04 Payment of Obligations
    141  
SECTION 5.05 Maintenance of Properties
    141  
SECTION 5.06 Books and Records; Inspection Rights
    141  
SECTION 5.07 Compliance with Laws
    141  
SECTION 5.08 Use of Proceeds
    144  
SECTION 5.09 Insurance
    144  
SECTION 5.10 Casualty and Condemnation
    144  
SECTION 5.11 Appraisals
    144  
SECTION 5.12 Field Examinations
    145  
SECTION 5.13 [Reserved]
    145  
SECTION 5.14 Additional Collateral; Further Assurances
    145  
SECTION 5.15 Financial Assistance
    147  
SECTION 5.16 Collateral Access Agreements and Deposit Account Control Agreements
    147  
SECTION 5.17 Transfer of Accounts of Specified European Loan Parties
    148  
SECTION 5.18 European Cash Management
    148  
SECTION 5.19 Post-Closing Obligations
    148  
 
       
ARTICLE VI Negative Covenants
    149  
SECTION 6.01 Indebtedness
    150  
SECTION 6.02 Liens
    152  
SECTION 6.03 Fundamental Changes
    155  
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
    156  
SECTION 6.05 Asset Sales
    159  
SECTION 6.06 [Reserved]
    160  

 

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              Page  
SECTION 6.07 [Reserved]
    161  
SECTION 6.08 Swap Agreements
    161  
SECTION 6.09 Restricted Payments; Certain Payments of Indebtedness
    161  
SECTION 6.10 Transactions with Affiliates
    164  
SECTION 6.11 Restrictive Agreements
    164  
SECTION 6.12 Amendment of Material Documents
    165  
SECTION 6.13 [Reserved]
    165  
SECTION 6.14 Sale and Leaseback Transaction
    165  
SECTION 6.15 Changes in Fiscal Periods
    165  
SECTION 6.16 Minimum Aggregate Availability
    166  
 
       
ARTICLE VII Events of Default
    166  
 
       
ARTICLE VIII The Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent and the Collateral Agents
    170  
 
       
ARTICLE IX Miscellaneous
    178  
SECTION 9.01 Notices
    178  
SECTION 9.02 Waivers; Amendments
    181  
SECTION 9.03 Expenses; Indemnity; Damage Waiver
    183  
SECTION 9.04 Successors and Assigns
    186  
SECTION 9.05 Survival
    189  
SECTION 9.06 Counterparts; Integration; Effectiveness
    189  
SECTION 9.07 Severability
    190  
SECTION 9.08 Right of Setoff
    190  
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process
    190  
SECTION 9.10 WAIVER OF JURY TRIAL
    191  
SECTION 9.11 Headings
    191  
SECTION 9.12 Confidentiality
    191  
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law
    192  
SECTION 9.14 USA PATRIOT Act
    193  
SECTION 9.15 Disclosure
    193  
SECTION 9.16 Appointment for Perfection
    193  
SECTION 9.17 Interest Rate Limitation
    193  
SECTION 9.18 Waiver of Immunity
    194  
SECTION 9.19 Currency of Payment
    194  
SECTION 9.20 Conflicts
    195  
SECTION 9.21 Parallel Debt
    195  
SECTION 9.22 Canadian Anti-Money Laundering Legislation
    196  
SECTION 9.23 Subordination
    197  
SECTION 9.24 Process Agent
    197  
SECTION 9.25 No Novation
    198  
SECTION 9.26 UK Loan Parties
    198  
SECTION 9.27 French Loan Guarantor
    198  
SECTION 9.28 Greek Loan Party
    198  
SECTION 9.29 Netherlands Security Agreements
    198  
SECTION 9.30 Reaffirmation and Accession by the Loan Parties
    199  

 

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              Page  
 
       
ARTICLE X Loan Guaranty
    199  
SECTION 10.01 Guaranty
    199  
SECTION 10.02 Guaranty of Payment
    204  
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty
    205  
SECTION 10.04 Defenses Waived
    206  
SECTION 10.05 Rights of Subrogation
    206  
SECTION 10.06 Reinstatement; Stay of Acceleration
    206  
SECTION 10.07 Information
    206  
SECTION 10.08 [Reserved]
    207  
SECTION 10.09 Maximum Liability
    207  
SECTION 10.10 Limitations on Enforcement in respect of German Loan Parties
    207  
SECTION 10.11 Contribution
    210  
SECTION 10.12 Liability Cumulative
    210  
SECTION 10.13 Place of Performance
    210  
 
       
ARTICLE XI The Borrower Representative
    211  
SECTION 11.01 Appointment; Nature of Relationship
    211  
SECTION 11.02 Powers
    211  
SECTION 11.03 Employment of Agents
    211  
SECTION 11.04 Notices
    212  
SECTION 11.05 Successor Borrower Representative
    212  
SECTION 11.06 Execution of Loan Documents; Borrowing Base Certificate
    212  
SECTION 11.07 Reporting
    212  

SCHEDULES:

         
Schedule 1.01(a)
  —   Commitment Schedule
Schedule 1.01(b)
  —   Eligible Real Property
Schedule 1.01(c)
  —   Mandatory Cost Formula
Schedule 1.01(d)
  —   Mortgaged Properties
Schedule 1.01(e)
  —   Specified Loan Documents
Schedule 2.06
  —   Existing Letters of Credit
Schedule 3.05
  —   Real Property
Schedule 3.06
  —   Disclosed Matters
Schedule 3.10
  —   Foreign Benefit Arrangements and Foreign Pension Plans
Schedule 3.14
  —   Insurance
Schedule 3.15
  —   Capitalization and Subsidiaries
Schedule 3.16
  —   Filing Jurisdictions
Schedule 5.19
  —   Post-Closing Obligations
Schedule 6.01
  —   Existing Indebtedness
Schedule 6.02
  —   Existing Liens
Schedule 6.04
  —   Existing Investments
Schedule 6.11
  —   Existing Restrictions
Schedule 8
  —   European Collateral Agent Security Trust Provisions

 

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EXHIBITS:

         
Exhibit A
  —   Form of Assignment and Assumption
Exhibit B-1
  —   Form of Aggregate Borrowing Base Certificate
Exhibit B-2
  —   Form of US Borrowing Base Certificate
Exhibit B-3
  —   Form of Canadian Borrowing Base Certificate
Exhibit B-4
  —   Form of European Borrowing Base Certificate
Exhibit B-5
  —   Form of UK Borrowing Base Certificate
Exhibit C
  —   Form of Compliance Certificate
Exhibit D
  —   Form of Joinder Agreement
Exhibit E
  —   Form of Exemption Certificate
Exhibit F-1
  —   Form of In-house Opinion of Liz Claiborne, Inc.
Exhibit F-2
  —   Form of Legal Opinion of Kramer Levin Naftalis & Frankel LLP
Exhibit G
  —   Form of Discount Note
Exhibit H
  —   Form of Intercreditor Agreement
Exhibit I
  —   Form of Borrowing Request

 

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This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 6, 2010 (as it
may be amended or modified from time to time, this “Agreement”), among LIZ
CLAIBORNE, INC., MEXX EUROPE B.V., JUICY COUTURE EUROPE LIMITED, LIZ CLAIBORNE
CANADA INC., the other Loan Parties from time to time party hereto, the Lenders
party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent and US
Collateral Agent, J.P. MORGAN EUROPE LIMITED, as European Administrative Agent
and European Collateral Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as
Canadian Administrative Agent and Canadian Collateral Agent, BANK OF AMERICA,
N.A., as Syndication Agent, and WACHOVIA CAPITAL FINANCE CORPORATION (NEW
ENGLAND), SUNTRUST BANK and GENERAL ELECTRIC CAPITAL CORPORATION, as
Documentation Agents, amends and restates in full the Amended and Restated
Credit Agreement, dated January 12, 2009 (as amended, restated, supplemented or
otherwise modified prior to the date hereof, the “Existing Credit Agreement”),
among Liz Claiborne, Inc., Mexx Europe B.V., Liz Claiborne Canada Inc., the
other Loan Parties from time to time party thereto, the lenders party thereto,
JPMorgan Chase Bank, N.A., as administrative agent and US collateral agent, J.P.
Morgan Europe Limited, as European administrative agent and European collateral
agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian administrative
agent and Canadian collateral agent, and the other agents party thereto.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
“Acceptance Fee” has the meaning assigned to such term in Section 2.21(m).
“Acceptance Obligations” means, as to any Loan Party, any and all obligations of
such Loan Party, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof), arising under or evidenced by any bills of exchange,
drafts or similar instruments drawn on any Loan Party and accepted by such Loan
Party (whether payable at sight, on demand or at any specified time) that are
purchased or otherwise assigned or payable to (whether by endorsement or
otherwise) or held by any Lender or any Affiliate of any Lender; provided that
(i) for the avoidance of doubt, in no event shall “Acceptance Obligations”
include any obligations relating to BA Drawings, (ii) at or prior to the time
that any such obligation is incurred, the applicable Lender or its Affiliate
(other than JPMCB) shall have delivered written notice to the Administrative
Agent of such obligation and that it constitutes an Acceptance Obligation
entitled to the benefits of the Collateral Documents and (iii) the aggregate
principal amount of all Acceptance Obligations outstanding at any one time shall
not exceed $10,000,000.

 

 

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“Account” means, individually and collectively, any “Account” referred to in any
Security Agreement.
“Account Control Agreement” means, individually and collectively, any Deposit
Account Control Agreement and any agreement in writing in form and substance
reasonably satisfactory to the applicable Collateral Agent, by and among any
Loan Party, the applicable Collateral Agent and any securities intermediary in
respect of any relevant securities account.
“Account Debtor” means any Person obligated on an Account.
“Account Party” means any Loan Party other than a US Loan Party, Canadian Loan
Party, Netherlands Loan Party, UK Loan Party or German Loan Party.
“Acquired JV Interests” has the meaning assigned to such term in
Section 6.04(s).
“Adjusted Funding Amount” means, on any Interim Calculation Date, the excess of
(i) the aggregate principal amount of European Swingline Loans outstanding on
such date over (ii) the aggregate principal amount of the European Swingline
Loans with respect to which the European Administrative Agent has requested a
Settlement pursuant to Section 2.05(c).
“Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum equal to (a) (i) the LIBO Rate for
such Interest Period multiplied (if applicable) by (ii) the Statutory Reserve
Rate, plus (b) the Mandatory Cost (in each case, rounded upwards, if necessary,
to the next 1/16 of 1%).
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder, and its successors in such
capacity.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified 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.
“Agency Agreement” means the Agency Agreement, dated as of July 6, 2006, between
Liz Claiborne, Inc., as issuer, JPMorgan Chase Bank, N.A. and J.P. Morgan Bank
Luxembourg S.A.
“Agents” means, individually and collectively, the Administrative Agent, the
European Administrative Agent, the Canadian Administrative Agent, the US
Collateral Agent, the Canadian Collateral Agent, the European Collateral Agent,
the Syndication Agent and the Documentation Agents.
“Aggregate Availability” means, with respect to all the Borrowers, at any time,
an amount equal to (a) the lesser of (i) the aggregate amount of the Commitments
and (ii) the Aggregate Borrowing Base minus (b) the total Revolving Exposure.

 

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“Aggregate Borrowing Base” means the aggregate amount of the US Borrowing Base,
the Canadian Borrowing Base, the UK Borrowing Base and the European Borrowing
Base; provided that the maximum amount of (a) the Canadian Borrowing Base which
may be included in the Aggregate Borrowing Base is the Canadian Sublimit,
(b) the UK Borrowing Base which may be included in the Aggregate Borrowing Base
is the UK Sublimit and (c) the European Borrowing Base which may be included in
the Aggregate Borrowing Base is the European Sublimit.
“Aggregate Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete by a Financial Officer of the Borrower Representative,
in substantially the form of Exhibit B-1.
“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all the Lenders.
“Agreement” has the meaning assigned to such term in the preamble hereto.
“Alabama Property” means that certain real property located at Lot 1, according
to the Interstate Industrial Park Plat No. 7, as said Map appears of record in
the office of the Judge of Probate of Montgomery County, Alabama in Plat Book
42, at Page 120.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a
one month interest period in effect on such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus 1%, provided that,
for the avoidance of doubt, for purposes of this definition, the Adjusted LIBO
Rate for any day shall be based on the rate appearing on the Reuters BBA Libor
Rates Page 3750 (or on any successor or substitute page of such page) at
approximately 11:00 a.m. London time on such day (or if such day is not a
Business Day, the immediately preceding Business Day). Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, respectively.
“Alternate Rate” means, for any day, the sum of (a) a rate per annum selected by
the Administrative Agent, in its reasonable discretion based on market
conditions in consultation with the Borrower Representative (or the applicable
Borrower) and the Lenders, plus (b) the Applicable Spread for Eurocurrency
Loans, plus (c) the Mandatory Cost. When used in reference to any Loan or
Borrowing, “Alternate Rate” refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the
Alternate Rate.
“AML Legislation” has the meaning assigned to such term in Section 9.22(a).
“Applicable Commitment Fee Rate” means, for any day relating to each of Facility
A and Facility B, with respect to the commitment fees payable hereunder, the
applicable rate per annum set forth below, based upon the daily average
Commitment Utilization Percentage during the most recent fiscal quarter of the
Company:

 

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              Applicable       Commitment   Commitment Utilization Percentage  
Fee Rate  
Category 1 > 50%
    0.50 %
Category 2 ≤ 50%
    0.75 %

For purposes of the foregoing, the Applicable Commitment Fee Rate shall be
determined as of the end of each fiscal quarter of the Company; provided that
the Commitment Utilization Percentage shall be deemed to be in Category 2 (A) at
any time that an Event of Default has occurred and is continuing (other than an
Event of Default arising from the failure to deliver any Borrowing Base
Certificate) or (B) at the option of the Administrative Agent or at the request
of the Required Lenders if the Borrowers fail to deliver any Borrowing Base
Certificate that is required to be delivered by them pursuant to Section 5.01,
during the period from the expiration of the time for delivery thereof until
each such Borrowing Base Certificate is so delivered.
“Applicable Percentage” means, with respect to any Facility A Lender or Facility
B Lender, (a) with respect to Revolving Loans, LC Exposure, Swingline Loans or
Protective Advances, a percentage equal to a fraction the numerator of which is
such Lender’s Facility A Commitment or Facility B Commitment, as applicable, and
the denominator of which is the aggregate amount of the Facility A Commitments
or Facility B Commitments, as applicable (or, if the Facility A Commitments or
Facility B Commitments, as applicable, have terminated or expired, such Lender’s
share of the total Facility A Revolving Exposure or Facility B Revolving
Exposure, respectively, at that time); provided that in the case of
Section 2.23(c) when a Specified Defaulting Lender shall exist, “Applicable
Percentage” pursuant to this clause (a) shall mean the percentage equal to a
fraction the numerator of which is such Lender’s Facility A Commitments or
Facility B Commitments, as applicable, and the denominator of which is the
aggregate amount of the Facility A Commitments or Facility B Commitments
(disregarding any Specified Defaulting Lender’s Commitment), as applicable and
(b) with respect to the Aggregate Credit Exposure, a percentage based upon its
share of the Aggregate Credit Exposure and the aggregate amount of unused
Facility A Commitments or Facility B Commitments, as applicable.
“Applicable Spread” means, for any day, with respect to any ABR Loan, Canadian
Prime Rate Loan, Eurocurrency Loan, BA Drawing or Overnight LIBO Loan, as the
case may be, the applicable rate per annum set forth below under the caption
“ABR Spread”, “Eurocurrency Spread”, “Canadian Prime Spread”, “BA Drawing
Spread” or “Overnight LIBO Spread”, as the case may be, based upon the daily
average Aggregate Availability during the most recent fiscal quarter of the
Company (the “Average Aggregate Availability”); provided that until the
completion of one full fiscal quarter after the Effective Date, the Applicable
Spread shall be the applicable rate per annum set forth below in Category 2:

                                                              Canadian     BA  
  Overnight   Average Aggregate   ABR     Eurocurrency     Prime     Drawing    
LIBO   Availability   Spread     Spread     Spread     Spread     Spread  
Category 1
    2.25 %     3.25 %     2.25 %     3.25 %     3.25 %
>$200,000,000
                                       

 

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                                                              Canadian     BA  
  Overnight   Average Aggregate   ABR     Eurocurrency     Prime     Drawing    
LIBO   Availability   Spread     Spread     Spread     Spread     Spread  
Category 2
    2.50 %     3.50 %     2.50 %     3.50 %     3.50 %
≤ $200,000,000 but >$125,000,000
                                       
Category 3
    2.75 %     3.75 %     2.75 %     3.75 %     3.75 %
≤ $125,000,000
                                       

For purposes of the foregoing, the Applicable Spread shall be determined as of
the end of each fiscal quarter of the Company based upon the Aggregate Borrowing
Base Certificate that is delivered from time to time pursuant to Section 5.01,
with any changes to the Applicable Spread resulting from changes in the Average
Aggregate Availability to be effective on the first day of the first month
following delivery of such Aggregate Borrowing Base Certificate; provided that
the Average Aggregate Availability shall be deemed to be in Category 3 (A) at
any time that an Event of Default has occurred and is continuing (other than an
Event of Default arising from the failure to deliver any Borrowing Base
Certificate) or (B) if the Company fails to deliver any Borrowing Base
Certificate that is required to be delivered pursuant to Section 5.01, during
the period from the expiration of the time for delivery thereof until five days
after each such Borrowing Base Certificate is so delivered; provided further
that if any Borrowing Base Certificate is at any time restated or otherwise
revised or if the information set forth in any Borrowing Base Certificate
otherwise proves to be false or incorrect such that the Applicable Spread would
have been higher than was otherwise in effect during any period, without
constituting a waiver of any Default or Event of Default arising as a result
thereof, interest due under this Agreement shall be immediately recalculated at
such higher rate for any such applicable periods and shall be due and payable on
demand.
“Approved Fund” has the meaning assigned to such term in Section 9.04.
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
“Attorney” has the meaning assigned to such term in Article VIII.
“Auditor’s Determination” has the meaning set forth in Section 10.10(c).
“Austrian Collateral Document” means any document governed by Austrian law and
creating a security interest over any Account or over any other property of any
European Loan Party in favor of the European Collateral Agent or any Lender, any
Issuing Bank or any other Person to which any European Loan Party or Canadian
Loan Party owes any monies or incurs any obligations or other liabilities under
any Loan Document (which, for the purpose of this defined term shall include the
Existing Credit Agreement), in a form satisfactory to the European Collateral
Agent, as the same may be amended, restated or otherwise modified from time to
time.
“Availability Period” means the period from and including the Effective Date to
but excluding Maturity Date.

 

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“Available Commitments” means, at any time, the aggregate amount of the
Commitments then in effect minus the total Revolving Exposure at such time;
provided that in calculating the total Revolving Exposure for the purpose of
determining the Available Commitment pursuant to Section 2.12(a), the aggregate
principal amount of Swingline Loans then outstanding shall be deemed to be zero.
“Average Aggregate Availability” shall have the meaning set forth in the
definition of “Applicable Spread” set forth herein.
“BA Drawing” means B/As accepted and purchased, and any BA Equivalent Loan made
in lieu of such acceptance and purchase, on the same date and as to which a
single Contract Period is in effect.
“BA Equivalent Loan” means an extension of credit made by a Non BA Lender
pursuant to Section 2.21(j).
“Bankers’ Acceptance” and “B/A” means a bill of exchange, including a depository
bill issued in accordance with the Depository Bills and Notes Act (Canada),
denominated in Canadian Dollars, drawn by the Canadian Borrower and accepted by
a Facility B Lender and shall include a Discount Note except where the context
otherwise requires.
“Banking Services” means each and any of the following bank services provided to
any Loan Party by any Lender or any of its Affiliates: (a) commercial credit
cards, (b) stored value cards, (c) purchasing cards and (d) treasury, depositary
or cash management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts and
interstate depository network services) or any similar transaction.
“Banking Services Obligations” of the Loan Parties, means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
“Banking Services Reserves” means all Reserves which the Administrative Agent
from time to time establishes in its Permitted Discretion for Banking Services
then provided or outstanding.
“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
USC. §§ 101 et seq., as amended, or any similar federal or state law for the
relief of debtors.
“Belgian Loan Guarantor” has the meaning assigned to such term in
Section 10.01(q).
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America (or any successor thereto).
“Bookrunners” means, individually or collectively, J.P. Morgan Securities Inc.,
Banc of America Securities LLC, Wells Fargo Capital Finance, LLC and SunTrust
Robinson Humphrey, Inc., in their respective capacities as joint bookrunners
hereunder.

 

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“Borrower” or “Borrowers” means, individually or collectively, the Company, the
Canadian Borrower, the UK Borrower and the European Borrower.
“Borrower Representative” means the Company, in its capacity as contractual
representative of the Borrowers pursuant to Article XI.
“Borrowing” means (a) Revolving Loans of the same Facility, Type and currency,
made, converted or continued on the same date and, in the case of Eurocurrency
Loans, as to which a single Interest Period is in effect and, in the case of BA
Drawings, as to which a single Contract Period is in effect, (b) a Swingline
Loan and (c) a Protective Advance.
“Borrowing Base” means, individually and collectively, each of the Aggregate
Borrowing Base, the US Borrowing Base, the Canadian Borrowing Base, the UK
Borrowing Base and the European Borrowing Base.
“Borrowing Base Certificate” means, individually and collectively, each of the
Aggregate Borrowing Base Certificate, the US Borrowing Base Certificate, the
Canadian Borrowing Base Certificate, the UK Borrowing Base Certificate and the
European Borrowing Base Certificate.
“Borrowing Request” means a request by the Borrower Representative (or the
applicable Borrower) for a Borrowing of Revolving Loans, in accordance with
Section 2.03, in substantially the form of Exhibit I.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, (a) when used in connection with a Eurocurrency
Loan, any Swingline Loan made by the European Swingline Lender or any Facility B
Letter of Credit other than a Canadian Letter of Credit, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in deposits
in the applicable currency in the London interbank market, (b) when used in
connection with a Facility B Swingline Loan, Facility B Letter of Credit or
Eurocurrency Loan, in each case denominated in Euros, the term “Business Day”
shall also exclude any day which is not a TARGET Day (as determined by the
Administrative Agent), (c) when used in connection with any European Loan,
European Swingline Loan or European Letter of Credit, the term “Business Day”
shall also exclude any day on which commercial banks in the Netherlands are
authorized or required by law to remain closed, (d) when used in connection with
any UK Loan, UK Swingline Loan or UK Letter of Credit, the term “Business Day”
shall also exclude any day on which commercial banks in London, England are
authorized or required by law to remain closed, (e) when used in connection with
any Canadian Loan or Canadian Letter of Credit or any Loan or Letter of Credit
issued in Canadian Dollars, the term “Business Day” shall also exclude any day
on which commercial banks in Toronto, Canada are authorized or required by law
to remain closed, (f) when used in connection with any Loan denominated in
Sterling, the term “Business Day” shall also exclude any day on which commercial
banks in London, England are authorized or required by law to remain closed and
(g) when used in connection with any Loan denominated in Yen, the term “Business
Day” shall also exclude any day on which commercial banks in Tokyo, Japan are
authorized or required by law to remain closed; provided further that
notwithstanding anything to the contrary in this definition, when used in
connection with any Loan denominated in Euros to the UK Borrower or the European

 

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Borrower, the term “Business Day” shall mean any day that is not a Saturday,
Sunday or other day on which commercial banks in London, England, are authorized
or required by law to remain closed.
“Canadian Administrative Agent” means JPMorgan Chase Bank, N.A., Toronto Branch,
in its capacity as administrative agent for the Facility B Lenders hereunder,
and its successors in such capacity (or such of its Affiliates as it may
designate from time to time).
“Canadian Availability” means (a) the lesser of (x) the Canadian Sublimit and
(y) the sum of (i) the Canadian Borrowing Base plus (ii) solely to the extent
the total Revolving Exposure relating to the Canadian Borrower exceeds the
Canadian Borrowing Base, the US Availability (calculated without giving effect
to any Canadian US Borrowing Base Utilization), minus (b) the total Revolving
Exposure relating to the Canadian Borrower.
“Canadian Benefit Plans” means any plan, fund, program, policy or agreement,
whether oral or written, formal or informal, funded or unfunded, insured or
uninsured, providing employee benefits, including medical, hospital care,
dental, sickness, accident, disability, life insurance, pension, retirement,
supplemental retirement or savings benefits, maintained by any Loan Party or any
Subsidiary of any Loan Party or under which any Loan Party or any Subsidiary of
any Loan Party has any actual or potential liability with respect to any
employee or former employee, but excluding any Canadian Pension Plans.
“Canadian Borrower” means Liz Claiborne Canada Inc.
“Canadian Borrowing Base” means, at any time, with respect to the Canadian Loan
Parties, the sum of:
(a) 100% of the aggregate cash balances denominated in dollars or Canadian
Dollars in depositary accounts of the Canadian Loan Parties constituting
investment accounts that are held at JPMorgan Chase Bank, N.A. or any Affiliate
thereof approved by the Administrative Agent and subject to an Account Control
Agreement and upon which the Canadian Collateral Agent has a first priority
perfected Lien for the benefit of the Agents, the applicable Lenders and the
applicable Issuing Banks, subject only to Liens permitted pursuant to
Section 6.02(f), plus
(b) the sum of (i) the product of (A) 85% multiplied by (B) the Canadian Loan
Parties’ Eligible Accounts at such time, minus the Dilution Reserve related to
the Canadian Loan Parties, and (ii) the product of (A) 90% multiplied by (B) the
Canadian Loan Parties’ Eligible Credit Card Account Receivables at such time,
plus
(c) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Canadian Loan Parties’ Eligible Retail
Inventory (other than Eligible LC Inventory), valued at the lower of cost
(determined on a first-in-first-out basis) or market value, at such time, plus

 

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(d) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Canadian Loan Parties’ Eligible Wholesale
Inventory (other than Eligible LC Inventory), valued at the lower of cost
(determined on a first-in-first-out basis) or market value, at such time, plus
(e) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Canadian Loan Parties’ Eligible Retail LC
Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, plus
(f) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Canadian Loan Parties’ Eligible Wholesale
LC Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, minus
(g) without duplication, applicable Reserves established by the Administrative
Agent in its Permitted Discretion.
The Administrative Agent may, in its Permitted Discretion, adjust Reserves
(subject to Section 9.02(b)) used in computing the Aggregate Borrowing Base and
the Canadian Borrowing Base, with any such changes to be effective two Business
Days after delivery of notice thereof to the Borrower Representative and the
Lenders. The Canadian Borrowing Base at any time shall be determined by
reference to the most recent Canadian Borrowing Base Certificate delivered to
the Administrative Agent pursuant to Section 5.01(g) of this Agreement.
“Canadian Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete by a Financial Officer of the Borrower Representative,
in substantially the form of Exhibit B-3.
“Canadian Collateral Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, in
its capacity as collateral agent, security trustee and fondé de pouvoir for
itself, the Administrative Agent, the Issuing Banks and the Lenders, and its
successors in such capacity (or such of its Affiliates as it may designate from
time to time).
“Canadian Dollars” and “C$” means dollars in the lawful currency of Canada.
“Canadian Funding Office” means the office of JPMorgan Chase Bank, N.A., Toronto
Branch specified in Section 9.01 or such other office as may be specified from
time to time by the Administrative Agent by written notice to the Canadian
Borrower and the relevant Lenders.
“Canadian Group Member” means any Subsidiary of the Company (including the
Canadian Borrower) organized under the laws of Canada or any province or other
political subdivision thereof.

 

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“Canadian Letter of Credit” means any Letter of Credit or similar instrument
(including a bank guarantee) acceptable to the applicable Issuing Bank issued
hereunder for the purpose of providing credit support for the Canadian Borrower.
“Canadian Loans” means, individually and collectively, the Canadian Revolving
Loans, the Canadian Swingline Loans and the Canadian Protective Advances.
“Canadian Loan Party” means any Loan Party (including the Canadian Borrower)
organized under the laws of Canada or any province or other political
subdivision thereof.
“Canadian Pension Plans” means any pension plan, supplemental pension,
retirement savings, deferred profit sharing or other retirement income plan or
arrangement of any kind, registered or unregistered, established, maintained or
contributed to by a Loan Party or any Subsidiary of a Loan Party for its
employees or former employees, but does not include the Canada Pension Plan or
the Quebec Pension Plan as maintained by the Government of Canada or the
Province of Quebec, respectively.
“Canadian Prime Rate” means on any day, the greater of (a) the annual rate of
interest announced from time to time by the Canadian Administrative Agent as
being its reference rate then in effect for determining interest rates on
Canadian Dollar-denominated commercial loans made by it in Canada and (b) the
CDOR Rate for a one month term in effect from time to time plus 100 basis points
per annum.
“Canadian Prime Rate Loan” means a Loan denominated in Canadian Dollars the rate
of interest applicable to which is based upon the Canadian Prime Rate.
“Canadian Protective Advance” has the meaning assigned to such term in
Section 2.04.
“Canadian Reaffirmation Agreement” means the Canadian Reaffirmation Agreement,
dated as of the date hereof, among the Canadian Loan Parties party thereto and
the Canadian Collateral Agent for the benefit of the Agents, the applicable
Lenders and the applicable Issuing Banks, as the same may be amended, restated
or otherwise modified from time to time.
“Canadian Revolving Loan” means a Revolving Loan made to the Canadian Borrower.
“Canadian Security Agreement” means that certain Canadian Pledge and Security
Agreement dated January 12, 2009, between the Canadian Loan Parties party
thereto and the Canadian Collateral Agent for the benefit of the Agents, the
applicable Lenders and the applicable Issuing Banks, as the same may be amended,
restated or otherwise modified from time to time, the Canadian Reaffirmation
Agreement, and any other pledge or security agreement entered into, on or after
the date of this Agreement, by any other Canadian Loan Party (as required by
this Agreement or any other Loan Document for the purpose of creating a Lien on
the property of any Canadian Loan Party (or any other property located in the
Canada)), as the same may be amended, restated or otherwise modified from time
to time.
“Canadian Sublimit” means $40,000,000, as such sublimit may be reduced or
terminated in accordance with Section 2.09.

 

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“Canadian Swingline Lender” means JPMorgan Chase Bank, N.A., Toronto Branch, in
its capacity as lender of Canadian Swingline Loans hereunder, and its successors
and assigns in such capacity.
“Canadian Swingline Loan” has the meaning assigned to such term in
Section 2.05(a)(v).
“Canadian US Borrowing Base Utilization” means the excess of (i) the total
Revolving Exposure relating to the Canadian Borrower minus (ii) the Canadian
Borrowing Base.
“Capital Expenditures” means, for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries (it being
understood that “Capital Expenditures” shall not include any portion of the
purchase price of a Permitted Acquisition that is required to be capitalized
under GAAP).
“Capital Impairment” has the meaning set forth in Section 10.10.
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a consolidated balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
“CDOR Rate” means on any day, with respect to a particular term as specified
herein, the annual rate of discount or interest which is the arithmetic average
of the discount rates for such term applicable to Canadian Dollar bankers’
acceptances identified as such on the Reuters Screen CDOR Page at approximately
10:00 A.M. on such day, or if such day is not a Business Day, then on the
immediately preceding Business Day (as adjusted by the Canadian Administrative
Agent after 10:00 A.M. to reflect any error in any posted rate or in the posted
average annual rate). If the rate does not appear on the Reuters Screen CDOR
Page as contemplated above, then the CDOR Rate on any day shall be calculated as
the arithmetic average of the annual discount rates for such term applicable to
Canadian Dollar bankers’ acceptances of, and as quoted by, the Schedule I
Reference Banks, as of 10:00 A.M. on that day, or if that day is not a Business
Day, then on the immediately preceding Business Day.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934 and the rules
and regulations of the U.S. Securities and Exchange Commission thereunder as in
effect on the date hereof) of Equity Interests representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Company; (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated by the board of directors of the Company, or a committee
thereof, nor (ii) appointed by directors so nominated; (c) the Company shall
cease to own, directly or indirectly, free and

 

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clear of all Liens or other encumbrances (other than Liens created pursuant to
any Loan Document), 100% of the outstanding voting Equity Interests of the
Borrowers (other than the Company) on a fully diluted basis (other than any
directors’ qualifying shares of any Borrower); or (d) the occurrence of a Put
Event.
“Change in Law” means (a) the adoption of any law, rule, regulation, treaty,
practice or concession after the date of this Agreement, (b) any change in any
law, rule, regulation, treaty, practice or concession or in the interpretation
or application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes
of Section 2.15(b), by any lending office of such Lender or such Issuing Bank or
by such Lender’s or such Issuing Bank’s holding company, if any) with any
request, guideline, directive, notice, ruling, statement or policy or practice
statement (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement.
“Charges” has the meaning assigned to such term in Section 9.17.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline
Loans or Protective Advances.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means any and all property or rights owned, leased or operated by a
Person covered by the Collateral Documents and any and all other property or
rights owned, leased or operated by any Loan Party, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of the applicable Collateral Agent (on behalf of the Agents, the
Lenders, and the Issuing Banks) pursuant to the Collateral Documents in order to
secure the Secured Obligations.
“Collateral Access Agreement” means, individually and collectively, each
“Collateral Access Agreement” referred to in any Security Agreement.
“Collateral Agent” means, individually and collectively, the US Collateral
Agent, Canadian Collateral Agent and European Collateral Agent.
“Collateral Document” means, individually and collectively, each Security
Agreement, each Mortgage and each other document granting a Lien upon any of the
Collateral as security for payment of the Secured Obligations.
“Collection Account” means, individually and collectively, each “Collection
Account” referred to in any Security Agreement.
“Commitment” means, with respect to each Lender, individually and collectively,
the Facility A Commitment and the Facility B Commitment of such Lender.
“Commitment Schedule” means the Schedule attached hereto as Schedule 1.01(a).

 

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“Commitment Utilization Percentage” means, on any date, the percentage
equivalent to a fraction (a) with respect to Facility A, (i) the numerator of
which is the total Facility A Revolving Exposure and (ii) the denominator of
which is the aggregate amount of the Facility A Commitments (or, on any day
after termination of the Facility A Commitments, the aggregate amount of the
Facility A Commitments in effect immediately preceding such termination) and
(b) with respect to Facility B, (i) the numerator of which is the total Facility
B Revolving Exposure and (ii) the denominator of which is the aggregate amount
of the Facility B Commitments (or, on any day after termination of the Facility
B Commitments, the aggregate amount of the Facility B Commitments in effect
immediately preceding such termination).
“Company” means Liz Claiborne, Inc., a Delaware corporation.
“Company Plan” means any Plan, Foreign Pension Plan or Foreign Benefit
Arrangement, whether in effect on the date hereof or hereafter adopted.
“Confidential Information Memorandum” means the Confidential Information
Memorandum dated April 2010 relating to the Borrowers and the Transactions.
“Consolidated EBITDA” means, for any period, Consolidated Net Income from
Continuing Operations Attributable (determined in accordance with GAAP) to the
Company for such period plus (a) without duplication and to the extent reflected
as a charge in the statement of such Consolidated Net Income for such period,
the sum of (i) income or franchise tax expense for such period,
(ii) Consolidated Interest Expense for such period, (iii) all amounts
attributable to depreciation and amortization expense for such period, (iv) any
items of loss resulting from the sale of assets other than in the ordinary
course of business for such period, (v) any non-cash charges for tangible or
intangible impairments or asset write downs for such period (excluding any write
downs for write-offs of Inventory), (vi) any other extraordinary non-cash
charges for such period (but excluding any non-cash charge in respect of an item
that was included in Consolidated Net Income in a prior period and any non-cash
charge that relates to the write-down or write-off of inventory) and (vii) cash
restructuring charges, cash charges in connection with store closures and other
non-recurring cash charges, in each case, related to cost reduction and brand
exiting related activities, incurred on or prior to the first anniversary of the
Effective Date in an aggregate amount not to exceed $30,000,000, minus
(b) without duplication and to the extent included in Consolidated Net Income,
(i) any items of gain resulting from the sale of assets other than in the
ordinary course of business for such period, (ii) any cash payments made during
such period in respect of non-cash charges described in clause (a)(v) or (a)(vi)
taken in a prior period, (iii) any interest income for such period and (iv) any
extraordinary gains and any non-cash items of income for such period, all
calculated for the Company and its Subsidiaries on a consolidated basis in
accordance with GAAP. Notwithstanding anything to the contrary set forth herein,
for purposes of calculating the Fixed Charge Coverage Ratio, Consolidated EBITDA
shall include discontinued operations of the Company and its Subsidiaries, as
defined by GAAP, until the applicable restated financial statements reflecting
such discontinuation are available.
“Consolidated Interest Expense” means, with reference to any period, total
interest expense (including that attributable to Capital Lease Obligations) of
the Company and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Company and its

 

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Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers’ acceptance financing and net
costs under Swap Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP), calculated on a
consolidated basis for the Company and its Subsidiaries for such period in
accordance with GAAP.
“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated or amalgamated with the Company or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which the Company or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Company or such Subsidiary in the form of dividends or similar distributions and
(c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
“Contract Period” means the term selected by the Canadian Borrower applicable to
Bankers’ Acceptances in accordance with Section 2.21(b).
“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
“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.
“Corresponding Debt” has the meaning assigned to such term in Section 9.21.
“Credit Card Account Receivables” means any receivables due to any Loan Party
from the credit card issuer in connection with purchases from and other goods
and services provided by such Loan Party on the following credit cards: Visa,
MasterCard, American Express, Diners Club, Discover, JCB, Carte Blanche and such
other credit cards as the Administrative Agent shall reasonably approve from
time to time, in each case which have been earned by performance by such Loan
Party but not yet paid to such Loan Party by the credit card issuer or the
credit card processor, as applicable.
“Credit Exposure” means, as to any Facility A Lender or Facility B Lender at any
time, the sum of (a) such Lender’s Facility A Revolving Exposure or Facility B
Revolving Exposure, as applicable, at such time, plus (b) an amount equal to its
Applicable Percentage, if any, of the aggregate principal amount of Facility A
Protective Advances or Facility B Protective Advances, as applicable,
outstanding at such time.
“Currency of Payment” has the meaning assigned to such term in Section 9.19.

 

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“Custodian” has the meaning assigned to such term in Article VIII.
“Customer Credit Liability Reserves” means, at any time, 50% of the aggregate
remaining value at such time of outstanding gift certificates and gift cards
sold by the Loan Parties entitling the holder thereof to use all or a portion of
the certificate or gift card to pay all or a portion of the purchase price of
Inventory.
“Danish Kroner” refers to the lawful currency of Denmark.
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
“Defaulting Lender” means any Lender, as determined by the Administrative Agent,
that has (a) failed to fund any portion of its Loans or participations in
Letters of Credit or Swingline Loans within three Business Days of the date
required to be funded by it hereunder, (b) notified any Borrower, the
Administrative Agent, any Issuing Bank, any Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements in which it commits to extend credit, (c) failed, within three
Business Days after request by the applicable Administrative Agent, to confirm
that it will comply with the terms of this Agreement relating to its obligations
to fund prospective Loans and participations in then outstanding Letters of
Credit and Swingline Loans, (d) otherwise failed to pay over to the applicable
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within three Business Days of the date when due, unless the subject
of a good faith dispute, or (e) (i) become or is insolvent or has a parent
company that has become or is insolvent or (ii) become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, interim receiver,
receiver and manager, administrator, liquidator, conservator, trustee or
custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or
appointment or has a parent company that has become the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, interim receiver, receiver and
manager, administrator, liquidator, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment.
“Defaulting Loan Party” has the meaning set forth in Section 9.27(a).
“Departing Lender” has the meaning assigned to such term in Section 2.19(b).
“Deposit Account Control Agreement” means, individually and collectively, each
“Deposit Account Control Agreement” referred to in any Security Agreement or, in
the case of any Security Agreement other than the US Security Agreement or the
Canadian Security Agreement, any similar documentation or requirements necessary
to perfect the security over the subject account referred to in such Security
Agreement.
“Designated German Subsidiaries” means Mexx Modehandels GmbH, a German limited
liability company (GmbH) having its registered office at Korschenbroich, Germany
with registered number HRB 5316 (commercial register of the local court of
Neuss), Mexx Holding

 

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GmbH, a German limited liability company (GmbH) having its registered office at
Korschenbroich, Germany with registered number HRB 5294 (commercial register of
the local court of Neuss), Verwaltungsgesellschaft Mexx Direct GmbH, a German
limited liability company (GmbH) having its registered office at Korschenbroich,
Germany with registered number HRB 13778 (commercial register of the local court
of Neuss), Mexx Deutschland GmbH, a German limited liability company (GmbH)
having its registered office at Korschenbroich, Germany with registered number
HRB 3035 (commercial register of the local court of Neuss) and Mexx Direct GmbH
& Co. KG, a German limited partnership (KG) having its registered office at
Korschenbroich, Germany with registered number HRA 6551(commercial register of
the local court of Neuss).
“Designated Loan Party” means Mexx Austria GmbH, Mexx Direct Holding B.V., Mexx
Europe B.V., Mexx Holding GmbH, Mexx Hellas EPE, Mexx Luxembourg S.Á.R.L., Mexx
Modehandels GmbH, Mexx Modehandels AG, Liz Claiborne 3 B.V. and Mexx Europe
International B.V.
“Dilution Factors” means, without duplication, with respect to any period, the
aggregate amount of all deductions, credit memos, returns, adjustments,
allowances, bad debt write-offs and other non-cash credits which are recorded to
reduce accounts receivable in a manner consistent with current and historical
accounting practices of the Loan Parties.
“Dilution Ratio” means, at any date, the amount (expressed as a percentage)
equal to (a) the aggregate amount of the applicable Dilution Factors for the 12
most recently ended fiscal months divided by (b) total gross sales of the
applicable Loan Parties for the 12 most recently ended fiscal months.
“Dilution Reserve” means, at any date, the applicable Dilution Ratio multiplied
by the Eligible Accounts of the applicable Loan Parties, as the context may
require, on such date; provided that at all times that the Dilution Ratio is
less than 5.0%, the Dilution Reserve shall be zero.
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters existing on the Effective Date and disclosed on
Schedule 3.06.
“Discount Note” means a non-interest bearing promissory note denominated in
Canadian Dollars, substantially in the form of Exhibit G, issued by the Canadian
Borrower to a Non BA Lender to evidence a BA Equivalent Loan.
“Discount Proceeds” means for any Bankers’ Acceptance issued hereunder, an
amount calculated on the applicable Borrowing date or date of conversion or
continuation by multiplying (a) the face amount of the Bankers’ Acceptance by
(b) the quotient obtained by dividing (i) one by (ii) the sum of one plus the
product of (A) the Discount Rate applicable to the Bankers’ Acceptance and (B) a
fraction, the numerator of which is the applicable Contract Period and the
denominator of which is 365, with the quotient being rounded up or down to the
fifth decimal place and .00005 being rounded up.
“Discount Rate” means with respect to an issue of Bankers’ Acceptances with the
same maturity date, (a) for a Revolving Lender which is a Schedule I Lender, the
CDOR Rate for the

 

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appropriate term and (b) for a Revolving Lender which is not a Schedule I
Lender, the arithmetic average (rounded upwards to the nearest multiple of
0.01%) of the actual discount rates (expressed as annual rates) for B/As for
such term accepted by the Schedule II/III Reference Banks established in
accordance with their normal practices at or about 10:00 A.M. (Toronto time) on
the date of issuance but not to exceed the actual rate of discount applicable to
B/As established pursuant to clause (a) for the same B/A issue plus 10 basis
points per annum.
“Document” has the meaning assigned to such term in the US Security Agreement.
“Documentation Agent” means, individually and collectively, Wachovia Capital
Finance Corporation (New England), SunTrust Bank and General Electric Capital
Corporation, in their respective capacities as Documentation Agent.
“Dollar Equivalent” means, on any date of determination, (a) with respect to any
amount expressed in Euros, Sterling, Canadian Dollars, Yen or any other currency
other than dollars, the amount of dollars that would be required to purchase the
amount of such currency based upon the Spot Selling Rate as of such date of
determination and (b) with respect to any amount expressed in dollars, such
amount.
“dollars” or “$” means the lawful money of the United States of America unless
otherwise specified.
“Domestic Subsidiary” means any Subsidiary organized under the laws of any
jurisdiction within the United States.
“Draft” means (i) a blank bill of exchange, within the meaning of the Bills of
Exchange Act (Canada), drawn by the Canadian Borrower on a Facility B Lender,
denominated in Canadian Dollars and bearing such distinguishing letters and
numbers as such Lender may determine, but which at such time, except as
otherwise provided herein, has not been completed or accepted by such Lender or
(ii) a depository bill within the meaning of the Depository Bills and Notes Act
(Canada); provided however that the Administrative Agent may require such
Facility B Lender to use a general form of Bankers’ Acceptance satisfactory to
the Canadian Borrower and such Lender, each acting reasonably, provided by the
Administrative Agent for such purpose in place of the Lender’s own form.
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Eligible Accounts” means, at any time, the Accounts of any Loan Party which in
accordance with the terms hereof are eligible as the basis for the extension of
Revolving Loans and Swingline Loans and the issuance of Letters of Credit
hereunder. Eligible Accounts shall not include any Account:
(a) which is not subject to a first priority perfected security interest in
favor of the applicable Collateral Agent (for the benefit of the Agents, the
applicable Lenders and the applicable Issuing Banks);

 

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(b) which is subject to any Lien other than (i) a Lien in favor of the
applicable Collateral Agent (for the benefit of the Agents, the applicable
Lenders, the applicable Issuing Banks and any other holder of applicable Secured
Obligations), (ii) a Permitted Encumbrance pursuant to clause (a) of the
definition of “Permitted Encumbrance” which does not have priority over the Lien
in favor of the applicable Collateral Agent (for the benefit of the Agents, the
applicable Lenders and the applicable Issuing Banks), (iii) Prior Claims that
are unregistered and that secure amounts that are not yet due and payable and
(iv) the Permitted Second Priority Lien;
(c) (i) with respect to which the scheduled due date is more than 60 days after
the original invoice date, (ii) which is unpaid more than (A) 120 days (or, with
respect to Royalty Accounts, 180 days) after the date of the original invoice
therefor; or (B) 60 days after the original due date, or (iii) which has been
written off the books of the applicable Loan Party or otherwise designated as
uncollectible (in determining the aggregate amount from the same Account Debtor
that is unpaid hereunder there shall be excluded the amount of any net credit
balances relating to Accounts due from an Account Debtor which are unpaid more
than 120 days from the date of invoice or more than 60 days from the due date);
(d) which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible hereunder (it
being understood that in making any such determination, the face amount of the
ineligible Accounts owing from such Account Debtor shall be reduced by the
amount of all actual discounts (including early pay discounts), claims, credits
or credits pending, promotional program allowances, price adjustments or other
allowances (including any amount that any Loan Party may be obligated to rebate
to an Account Debtor pursuant to the terms of any agreement or understanding
(written or oral)) applicable thereto);
(e) which is owing by an Account Debtor to the extent the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to such Loan Party
exceeds 10% of the aggregate amount of Eligible Accounts of such Loan Party;
provided that (i) no Accounts owing by Macy’s, Kohl’s, JCPenney’s, El Corte
Inglés or TJX shall be ineligible solely because of this clause (e) unless the
aggregate amount of Accounts owing from any such Account Debtor and its
Affiliates to such Loan Party exceeds (x) 25%, in the case of Kohl’s, Macy’s and
JCPenney’s, (y) the lesser of 35% and $10,000,000, in the case of El Corte
Inglés, and (z) 15%, in the case of TJX, in each case, of the aggregate amount
of Eligible Accounts of such Loan Party, (ii) no Accounts of any Canadian Loan
Party owing by Hudson Bay, Sears or Costco shall be ineligible solely because of
this clause (e) unless the aggregate amount of Accounts owing from any such
Account Debtor and its Affiliates to such Canadian Loan Party exceeds (x) 25%,
in the case of Hudson Bay and (y) 20%, in the case of Sears and Costco, in each
case, of the aggregate amount of Eligible Accounts of such Canadian Loan Party
and (iii) no Accounts owing by any Investment Grade Account Debtor shall be
ineligible solely because of this clause (e);

 

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(f) with respect to which any covenant, representation, or warranty contained in
this Agreement or in any applicable Security Agreement has been breached or is
not true;
(g) which (i) does not arise from the sale of goods or performance of services
(for the avoidance of doubt, Royalty Accounts and RSB Accounts shall be deemed
to arise from the performance of services) in the ordinary course of business,
(ii) is not evidenced by an invoice or other documentation reasonably
satisfactory to the Administrative Agent which has been sent to the Account
Debtor, (iii) represents a progress billing, (iv) is contingent upon any Loan
Party’s completion of any further performance, (v) represents a sale on a
bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment,
cash-on-delivery or any other repurchase or return basis or (vi) relates to
payments of interest or service or finance charges;
(h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by the applicable Loan Party or which is otherwise recorded as
deferred revenue or if such Account was invoiced more than once;
(i) with respect to which any check or other instrument of payment has been
returned uncollected for any reason to the extent of such returned payment;
(j) which is owed by an Account Debtor that (i) has applied for or been the
subject of a petition or application for, suffered, or consented to the
appointment of any receiver, custodian, trustee, administrator, liquidator or
similar official for such Account Debtor of its assets, (ii) has had possession
of all or a material part of its property taken by any receiver, custodian,
trustee or liquidator, (iii) has filed, or had filed against it, under any
Insolvency Laws, any assignment, application, request or petition for
liquidation, reorganization, compromise, arrangement, adjustment of debts, stay
of proceedings, adjudication as bankrupt, winding-up, or voluntary or
involuntary case or proceeding, (iv) has admitted in writing its inability to
pay its debts as they become due, or (v) has ceased operation of its business;
(k) which is owed by an Account Debtor which (i) does not maintain its chief
executive office (or its domicile, for the purposes of the Quebec Civil Code) in
the United States, Canada or, solely with respect to any Account Debtor of any
Netherlands Loan Party or UK Loan Party (or, with respect to Accounts in an
aggregate amount not to exceed $10,000,000, any Account Debtor of any US Loan
Party or Canadian Loan Party), Norway, Switzerland or any Permitted European
Member State or (ii) is not organized under any applicable law of the United
States, any state of the United States or the District of Columbia, Canada or
any province or other political subdivision of Canada or, solely with respect to
any Account Debtor of any Netherlands Loan Party or UK Loan Party (or, with
respect to Accounts in an aggregate amount not to exceed $10,000,000, any
Account Debtor of any US Loan Party or Canadian Loan Party), Norway, Switzerland
or any Permitted European Member State, unless, in any such case, such Account
is backed by a letter of credit reasonably acceptable to the Administrative
Agent

 

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which is in the possession of, has been assigned to and is directly drawable by
the Administrative Agent;
(l) which is owed in any currency other than (i) dollars, Euros, or Canadian
Dollars, with respect to Accounts of the Canadian Loan Parties, (ii) dollars,
Canadian Dollars, or Euros, with respect to Accounts of the US Loan Parties,
(iii) dollars, Euros, Sterling, Danish Kroner or Swedish Kronor, with respect to
Accounts of the Specified European Loan Parties, or (iv) dollars, Euros, or
Sterling, with respect to Accounts of the UK Loan Parties; provided that the
aggregate amount of Eligible Accounts denominated in Danish Kroner and Swedish
Kronor at any time shall not exceed 5.0% of all Eligible Accounts at such time;
(m) which is owed by the government (or any department, agency, public
corporation, or instrumentality thereof, excluding states of the United States
of America) of any country and except to the extent that the subject Account
Debtor is (i) the federal government of the United States of America and, with
respect to Accounts in excess of $5,000,000 (individually or in the aggregate)
at any time, has complied with the Federal Assignment of Claims Act of 1940, as
amended (31 USC. § 3727 et seq. and 41 USC. § 15 et seq.), (ii) the federal
government of Canada and has complied with the Financial Administration Act
(Canada), as amended, (iii) the federal government of the Netherlands, or
(iv) the federal government of Germany, as applicable, and any other steps
necessary to perfect the Lien of the applicable Collateral Agent in such Account
have been complied with to the satisfaction of such applicable Collateral Agent;
(n) which is owed by any Affiliate, employee, officer, director, agent or
stockholder (other than any stockholder of the Company) of any Loan Party;
(o) which is evidenced by any promissory note, judgment, chattel paper or
instrument;
(p) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Loan Party is indebted, but only to the extent of such
indebtedness, or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;
(q) which is subject to any counterclaim, deduction, defense, setoff or dispute
but only to the extent of any such counterclaim, deduction, defense, setoff or
dispute;
(r) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit such Loan Party to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Loan Party has filed such
report or qualified to do business in such jurisdiction;
(s) with respect to which such Loan Party has made any agreement with the
Account Debtor for any reduction thereof, other than discounts and adjustments
given in

 

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the ordinary course of business, or any Account which was partially paid and
such Loan Party created a new receivable for the unpaid portion of such Account;
(t) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether federal, provincial, territorial, state
or local, including without limitation the Federal Consumer Credit Protection
Act, the Federal Truth in Lending Act and Regulation Z of the Board;
(u) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than such Loan Party has or has
had an ownership interest in such goods, or which indicates any party other than
such Loan Party as payee or remittance party;
(v) which was created on cash on delivery terms;
(w) which is subject to any limitation on assignments or other security
interests (whether arising by operation of law, by agreement or otherwise),
unless the applicable Collateral Agent has determined that such limitation is
not enforceable;
(x) which is governed by the laws of any jurisdiction other than the United
States, any state thereof or the District of Columbia, Canada or any province or
other political subdivision of Canada (with respect to an Account Debtor of any
Canadian Loan Party), the Netherlands (with respect to an Account Debtor of the
European Borrower), England and Wales (with respect to an Account Debtor of the
UK Borrower) or (with respect to RSB Accounts in an amount not to exceed
$500,000) Germany;
(y) in respect of which the Account Debtor is a consumer within applicable
consumer protection legislation;
(z) which was acquired or originated by any Person acquired directly or
indirectly by the Company after the date hereof until such time as a field exam
in respect of such Accounts reasonably satisfactory to the Administrative Agent,
in its Permitted Discretion, has been completed;
(aa) which is owed by an Account Debtor in respect of which the Company or any
of its Subsidiaries has received notice of any proceedings or actions which are
threatened or pending against such Account Debtor which would reasonably be
expected to affect the value of the Account as Collateral or the likelihood of
payment by the Account Debtor;
(bb) which is a Credit Card Account Receivable;
(cc) which is not owned by a Loan Party or such Loan Party does not have good or
marketable title to such Account;
(cc) which the Administrative Agent in its Permitted Discretion determines may
not be paid by reason of the Account Debtor’s inability to pay; or

 

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(dd) which is an RSB Account until such time as (x) a field exam in respect of
such Accounts reasonably satisfactory to the Administrative Agent and
(y) diligence with respect to RSB reasonably satisfactory to the Administrative
Agent has been completed.
In determining the amount of an Eligible Account, the face amount of an Account
may, in the Administrative Agent’s Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all sales, advances or prepayments, accrued and actual discounts (including
early pay discounts), claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances (including
any amount that any Loan Party may be obligated to rebate to an Account Debtor
pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but
not yet applied by such Loan Party to reduce the amount of such Account.
Standards of eligibility may be made more restrictive (and such increased
restrictiveness subsequently reversed in whole or in part) from time to time
solely by the Administrative Agent in the exercise of its Permitted Discretion,
with any such changes to be effective two Business Days after delivery of notice
thereof to the Borrower Representative and the Lenders.
“Eligible Credit Card Account Receivable” means any Credit Card Account
Receivable that (i) has been earned and represents the bona fide amounts due to
a Loan Party from a credit card processor and/or credit card issuer, and in each
case originated in the ordinary course of business of the applicable Loan Party
and (ii) is not excluded as an Eligible Credit Card Account Receivable pursuant
to any of clauses (a) through (i) below. Without limiting the foregoing, to
qualify as an Eligible Credit Card Account Receivable, a Credit Card Account
Receivable shall indicate no person other than a Loan Party as payee or
remittance party. Eligible Credit Card Account Receivable shall not include any
Credit Card Account Receivable if:
(a) such Credit Card Account Receivable is not owned by a Loan Party or such
Loan Party does not have good or marketable title to such Credit Card Account
Receivable;
(b) such Credit Card Account Receivable does not constitute an “Account” (as
defined in the UCC or, with respect to the Canadian Borrower, the PPSA) or such
Credit Card Account Receivable has been outstanding more than five Business
Days;
(c) the credit card issuer or credit card processor of the applicable credit
card with respect to such Credit Card Account Receivable is the subject of any
bankruptcy or insolvency proceedings;
(d) such Credit Card Account Receivable is not a valid, legally enforceable
obligation of the applicable credit card issuer with respect thereto;
(e) such Credit Card Account Receivable is not subject to a properly perfected
first priority security interest in favor of the applicable Collateral Agent
(for the benefit of the Agents, the applicable Lenders and the applicable
Issuing Banks), or is subject to any Lien whatsoever other than any Lien created
pursuant to the Loan Documents, any Permitted Encumbrances contemplated by the
processor agreements and for which

 

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appropriate Reserves (as determined by the Administrative Agent in its Permitted
Discretion) have been established and the Permitted Second Priority Lien;
(f) such Credit Card Account Receivable does not conform in all material
respects to all representations, warranties or other provisions in the Loan
Documents or in the credit card agreements relating to such Credit Card Account
Receivable;
(g) such Credit Card Account Receivable is subject to risk of set-off,
non-collection or not being processed due to unpaid and/or accrued credit card
processor fee balances, to the extent of the lesser of the balance of such
Credit Card Account Receivable or unpaid credit card processor fees;
(h) such Credit Card Account Receivable is evidenced by “chattel paper” or an
“instrument” of any kind unless such “chattel paper” or “instrument” is in the
possession of the Administrative Agent, and to the extent necessary or
appropriate, endorsed to the Administrative Agent; or
(i) such Credit Card Account Receivable does not meet such other usual and
customary eligibility criteria for Credit Card Account Receivables as the
Administrative Agent may determine from time to time in its Permitted
Discretion.
In determining the amount to be so included in the calculation of the value of
an Eligible Credit Card Account Receivable, the face amount thereof shall be
reduced by, without duplication, to the extent not reflected in such face
amount, (i) the amount of all customary fees and expenses in connection with any
credit card arrangements and (ii) the aggregate amount of all cash received in
respect thereof but not yet applied by the Loan Party to reduce the amount of
such Eligible Credit Card Account Receivable.
“Eligible Inventory” means, at any time, the Inventory of a Loan Party which in
accordance with the terms hereof is eligible as the basis for the extension of
Revolving Loans and Swingline Loans and the issuance of Letters of Credit
hereunder. Eligible Inventory shall not include any Inventory:
(a) which is not subject to a first priority perfected Lien in favor of the
applicable Collateral Agent (for the benefit of the Agents, the applicable
Lenders and the applicable Issuing Banks);
(b) which is subject to any Lien other than (i) a Lien in favor of the
applicable Collateral Agent (for the benefit of the Agents, the applicable
Lenders, the applicable Issuing Banks and any other holder of applicable Secured
Obligations), (ii) a Permitted Encumbrance pursuant to clause (a) or (b) of the
definition of Permitted Encumbrance hereunder which does not have priority over
the Lien in favor of the applicable Collateral Agent (for the benefit of the
Agents, the applicable Lenders and the applicable Issuing Banks), (iii) Prior
Claims that are unregistered and that secure amounts that are not yet due and
payable and (iv) the Permitted Second Priority Lien;
(c) which, in the Administrative Agent’s Permitted Discretion, is determined to
be slow moving, obsolete, unmerchantable, defective, used, unfit for sale, not
salable

 

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at prices approximating at least the cost of such Inventory in the ordinary
course of business, or unacceptable due to age, type, category and/or quantity
(it being understood that in the use of such Permitted Discretion, the
Administrative Agent may take into account whether such Inventory was treated as
slow moving or otherwise unfit for sale in the calculation of the applicable Net
Orderly Liquidation Value);
(d) with respect to which any covenant, representation, or warranty contained in
this Agreement or any applicable Security Agreement has been breached or is not
true;
(e) in which any Person other than the applicable Loan Party shall (i) have any
direct or indirect ownership, interest or title to such Inventory or (ii) be
indicated on any purchase order or invoice with respect to such Inventory as
having or purporting to have an interest therein;
(f) which is not finished goods or which constitutes work-in-process, raw
materials (other than raw materials located in the United States at any property
owned by such Loan Party or at any location leased by such Loan Party for which
a Collateral Access Agreement has been delivered to the Administrative Agent and
continues to be in effect), spare or replacement parts, subassemblies, packaging
and shipping material, manufacturing supplies, samples, prototypes, displays or
display items, bill-and-hold goods, goods that are returned or marked for
return, repossessed goods, defective or damaged goods, goods held by a Loan
Party on consignment, or goods which are not of a type held for sale in the
ordinary course of business;
(g) which is not located in the United States, Canada (with respect to Inventory
owned by any US Loan Party or Canadian Loan Party), England, Wales and Ireland
(with respect to Inventory owned by any UK Loan Party), the Netherlands (with
respect to Inventory owned by any Netherlands Loan Party) or Germany (to the
extent the European Borrower retains title to such Inventory pursuant to an
agreement that is satisfactory to the European Administrative Agent and the
aggregate amount of such Inventory does not exceed $15,000,000) or is in transit
from vendors and suppliers (it being understood, for the avoidance of doubt,
that any such Inventory that is in transit from any Loan Party to a warehouse
owned or leased by such Loan Party shall not be excluded pursuant to this clause
(g) solely because such Inventory is in transit so long as, in the case of any
such Inventory in transit to a warehouse leased by such Loan Party, either the
Administrative Agent has received a Collateral Access Agreement in respect
thereof that continues to be in effect or a Rent Reserve has been taken);
provided that such Inventory in transit with a common carrier from vendors and
suppliers may be included as eligible pursuant to this clause (g) so long as
(1) the applicable Administrative Agent shall have received (x) a true and
correct copy of the bill of lading and other shipping documents for such
Inventory, (y) evidence of satisfactory casualty insurance naming the applicable
Collateral Agent as loss payee and otherwise covering such risks as the
Administrative Agent may reasonably request, and (z) if the bill of lading is
(A) non-negotiable and the inventory is in transit to the United States or
Canada, a duly executed Collateral Access Agreement from the applicable customs
broker for such Inventory or (B) negotiable, confirmation that the bill is
issued in the name of the applicable Loan Party and consigned to the order of
the Collateral Agent, and an

 

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acceptable agreement has been executed with the Loan Party’s customs broker, in
which the customs broker agrees that it holds the negotiable bill as agent for
the applicable Collateral Agent and has granted the applicable Collateral Agent
access to the Inventory, (2) the common carrier is not an Affiliate of the
applicable vendor, supplier, distribution center or initial Group Member, as
applicable and (3) the aggregate amount of such Inventory in transit (w) in the
US Borrowing Base shall not exceed $35,000,000, (x) in the European Borrowing
Base shall not exceed $15,000,000, (y) in the Canadian Borrowing Base shall not
exceed $5,000,000, and (z) in the UK Borrowing Base shall not exceed
$10,000,000, in each case at any time;
(h) which is located in any (i) warehouse, cross-docking facility, distribution
center, regional distribution center or depot or (ii) any retail store located
in a jurisdiction providing for a common law or statutory landlord’s lien (or
any retail store location in the Province of Quebec in respect of which the
landlord has filed a hypothec) on the personal property of tenants, which lien
or hypothec would be prior or superior to that of the applicable Collateral
Agent (for the benefit of the Agents, the applicable Lenders and the applicable
Issuing Banks), in each case leased by the applicable Loan Party unless (A) the
lessor has delivered to the Administrative Agent a Collateral Access Agreement
which remains in effect or (B) a Rent Reserve has been established by the
Administrative Agent which Rent Reserve may be reduced if a subsequent
Collateral Access Agreement has been received by the Administrative Agent;
(i) which is located in any third party warehouse or is in the possession of a
bailee (other than a third party processor but including any ecommerce service
provider) and is not evidenced by a Document (other than bills of lading to the
extent permitted pursuant to paragraph (g) above), unless (i) such warehouseman
or bailee has delivered to the Administrative Agent a Collateral Access
Agreement which remains in effect and such other documentation as the
Administrative Agent may require or (ii) a Rent Reserve has been established by
the Administrative Agent which Rent Reserve may be reduced if a subsequent
Collateral Access Agreement has been received by the Administrative Agent;
(j) which is being processed offsite at a third party location or outside
processor, or is in-transit to or from said third party location or outside
processor;
(k) which is the subject of a consignment by any Loan Party as consignor;
provided that Inventory of the Netherlands Loan Parties, in an aggregate amount
not to exceed $5,000,000, located in the Netherlands or Germany shall not be
excluded pursuant to this clause (l) solely because such Inventory is subject to
a “four wall” concession arrangement so long as a Rent Reserve has been
established by the Administrative Agent;
(l) which is distressed Inventory, as determined by the Administrative Agent in
its Permitted Discretion;
(m) which contains or bears any intellectual property rights licensed to any
Loan Party unless the Administrative Agent is satisfied that it may sell or
otherwise dispose of such Inventory without (i) the consent of each applicable
licensor, (ii) infringing the rights of such licensor, (iii) violating any
contract with such licensor, or (iv) incurring any liability with respect to
payment of royalties other than royalties

 

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incurred pursuant to sale of such Inventory under the current licensing
agreement; provided however that any such Inventory bearing Intellectual
Property licensed to LC LIBRA, LLC pursuant to the Existing Donna Karan License
shall not be ineligible solely pursuant to this clause (m);
(n) which is not reflected in a current perpetual inventory report of such Loan
Party (unless such Inventory is reflected in a report to the Administrative
Agent as “in transit” Inventory and constitutes Eligible LC Inventory);
(o) for which reclamation rights have been asserted by the seller;
(p) (i) for which any contract relating to such Inventory expressly includes
retention of title in favor of the vendor or supplier thereof or (ii) for which
any contract relating to such Inventory does not address retention of title and
the relevant Loan Party has not represented to the Administrative Agent that
there is no retention of title in favor of the vendor or supplier thereof;
provided that Inventory of a Loan Party other than a US Loan Party of the types
described in clauses (i) and (ii) above shall not be excluded from Eligible
Inventory solely pursuant to this clause (p) in the event that (x) the European
Administrative Agent shall have received evidence satisfactory to it that the
full purchase price of such Inventory has, or will have, been paid prior to or
upon the delivery of such Inventory to a Loan Party or (y) a Letter of Credit
has been issued under this Agreement for the purchase of such Inventory; or
(q) which the Administrative Agent deems not to be Eligible Inventory based on
such credit and collateral considerations as the Administrative Agent in its
Permitted Discretion, deems appropriate;
provided that in determining the value of the Eligible Inventory, such value
shall be reduced by, without duplication, any amounts representing (a) Vendor
Rebates; (b) costs included in Inventory relating to advertising; (c) the shrink
reserve; (d) the unreconciled discrepancy between the general inventory ledger
and the perpetual Inventory ledger, to the extent the general Inventory ledger
reflects less Inventory than the perpetual inventory ledger; and (e) a reserve
for Inventory which is designated to be returned to vendor or which is
recognized as damaged or off quality by the applicable Loan Party.
Standards of eligibility may be made more restrictive (and such increased
restrictiveness subsequently reversed in whole or in part) from time to time
solely by the Administrative Agent in the exercise of its Permitted Discretion,
with any such changes to be effective two Business Days after delivery of notice
thereof to the Borrower Representative and the Lenders.
“Eligible Juicy Couture Trademark Amount” means $10,000,000; provided that such
amount shall amortize quarterly on a straight-line basis to zero over two years
commencing at the end of the first full fiscal quarter following the Effective
Date; provided further that the Eligible Juicy Couture Trademark Amount shall be
reduced on a pro rata basis, determined by reference to the allocated value of
each Juicy Couture Trademark, to the extent that (i) any such Juicy Couture
Trademark is no longer owned by a US Loan Party or (ii) the US Collateral Agent
does not have a perfected first priority Lien in such Juicy Couture Trademark.

 

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“Eligible Kate Spade Trademark Amount” means $3,000,000; provided that such
amount shall amortize quarterly on a straight-line basis to zero over two years
commencing at the end of the first full fiscal quarter following the Effective
Date; provided further that the Eligible Kate Spade Trademark Amount shall be
reduced on a pro rata basis, determined by reference to the allocated value of
each Kate Spade Trademark, to the extent that (i) any such Kate Spade Trademark
is no longer owned by a US Loan Party or (ii) the US Collateral Agent does not
have a perfected first priority Lien in such Kate Spade Trademark.
“Eligible LC Inventory” means the value of the undrawn face amount of commercial
and documentary Letters of Credit issued relating to the purchase price of
Inventory that has or will be shipped to a Loan Party’s location (as to which,
in the case of locations leased by a Loan Party, a Collateral Access Agreement
has been obtained, or appropriate Rent Reserves have been taken) and which
Inventory (a) is or will be owned by a Loan Party, (b) is fully insured on terms
reasonably satisfactory to the applicable Collateral Agent, (c) is subject to a
first priority Lien upon such goods in favor of the applicable Collateral Agent
(except for any possessor Lien upon such goods in the possession of a freight
carrier or shipping company securing only the freight charges for the
transportation of such goods to such Loan Party and other Permitted
Encumbrances), (d) is evidenced or deliverable pursuant to documents, notices,
instruments, statements and bills of lading that have been delivered to the
applicable Collateral Agent or an agent acting on its behalf, and (e) is
otherwise deemed to be “Eligible Inventory” hereunder; provided that the
Aggregate Availability represented by the Eligible LC Inventory in (w) the US
Borrowing Base shall not exceed $60,000,000, (x) the Canadian Borrowing Base
shall not exceed $15,000,000, (y) the European Borrowing Base shall not exceed
$25,000,000, and (z) the UK Borrowing Base shall not exceed $20,000,000, in each
case at any time. The applicable Collateral Agent shall have the right to
establish, modify, or eliminate Reserves against Eligible LC Inventory from time
to time in its Permitted Discretion. In addition, the applicable Collateral
Agent shall have the right, from time to time, to adjust any of the criteria set
forth above and to establish new criteria with respect to Eligible LC Inventory
in its Permitted Discretion, subject to the approval of the Administrative Agent
in the case of adjustments, new criteria or the elimination of Reserves which
have the effect of making more credit available or are otherwise adverse to the
Lenders; provided however, for the avoidance of doubt, no such approval shall be
required in the case of any adjustment or the elimination of Reserves caused by
operation of the provisions of this Agreement relating to the Aggregate
Borrowing Base.
“Eligible Liz Claiborne Trademark Amount” means $12,000,000; provided that such
amount shall amortize quarterly on a straight-line basis to zero over two years
commencing at the end of the first full fiscal quarter following the Effective
Date; provided further that the Eligible Liz Claiborne Trademark Amount shall be
reduced on a pro rata basis, determined by reference to the allocated value of
each Liz Trademark, to the extent that (i) any such Liz Trademark is no longer
owned by a US Loan Party or (ii) the US Collateral Agent does not have a
perfected first priority Lien in such Liz Trademark.
“Eligible Lucky Brand Trademark Amount” means $5,000,000; provided that such
amount shall amortize quarterly on a straight-line basis to zero over two years
commencing at the end of the first full fiscal quarter following the Effective
Date; provided further that the Eligible Lucky Brand Trademark Amount shall be
reduced on a pro rata basis, determined by reference to the allocated value of
each Lucky Brand Trademark, to the extent that (i) any such Lucky Brand

 

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Trademark is no longer owned by a US Loan Party or (ii) the US Collateral Agent
does not have a perfected first priority Lien in such Lucky Brand Trademark.
“Eligible Real Property” means, the real property listed on Schedule 1.01(b)
owned by any US Loan Party and any other real property that is approved by the
Administrative Agent on or prior to the second anniversary of the Effective
Date, located in the United States and owned by any US Loan Party, in each case
(i) in respect of which an appraisal report has been delivered to the
Administrative Agent in form, scope and substance reasonably satisfactory to the
Administrative Agent, (ii) in respect of which the Administrative Agent is
satisfied that all actions necessary or desirable in order to create a perfected
first priority Lien for the benefit of the US Collateral Agent on such real
property have been taken, including, the filing and recording of Mortgages and
that such real property is not subject to any other Lien (other than those
permitted under clauses (a), (b), (f) and (g) of the definition of Permitted
Encumbrance, under Section 6.02(k) and other than the Permitted Second Priority
Lien), (iii) in respect of which an environmental assessment report has been
completed and delivered to the Administrative Agent in form and substance
reasonably satisfactory to the Administrative Agent, (iv) which is adequately
protected by fully-paid valid title insurance with endorsements and in amounts
acceptable to the Administrative Agent, insuring that the US Collateral Agent,
for the benefit of the Agents, the Lenders and the Issuing Banks, shall have a
perfected first priority Lien on such real property, evidence of which shall
have been provided in form and substance satisfactory to the Administrative
Agent, and (v) if required by the Administrative Agent: (A) an ALTA survey has
been delivered for which all necessary fees have been paid and which is dated no
more than 30 days prior to the date on which the applicable Mortgage is
recorded, certified to Administrative Agent and the issuer of the title
insurance policy in a manner satisfactory to the Administrative Agent by a land
surveyor duly registered and licensed in the state in which such Eligible Real
Property is located and acceptable to the Administrative Agent, and shows all
buildings and other improvements, any offsite improvements, the location of any
easements, parking spaces, rights of way, building setback lines and other
dimensional regulations and the absence of encroachments, either by such
improvements or on to such property, and other defects, other than encroachments
and other defects acceptable to the Administrative Agent; (B) in respect of
which local counsel for the applicable US Loan Parties in states in which the
Eligible Real Property is located have delivered a letter of opinion with
respect to the enforceability and perfection of the Mortgages and any related
fixture filings in form and substance reasonably satisfactory to the
Administrative Agent; and (C) in respect of which the applicable US Loan Party
shall have used its reasonable commercial efforts to obtain estoppel
certificates executed by all tenants of such Eligible Real Property and such
other consents, agreements and confirmations of lessors and third parties have
been delivered as the Administrative Agent may deem necessary in its reasonable
discretion, together with evidence that all other actions that the
Administrative Agent may deem necessary in order to create perfected first
priority Liens on the property described in the Mortgages have been taken.
“Eligible Retail Inventory” means Eligible Inventory that is Retail Inventory.
“Eligible Retail LC Inventory” means Eligible LC Inventory that is Retail
Inventory.

 

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“Eligible Trademark Amount” means the aggregate amount of the Eligible Liz
Claiborne Trademark Amount, the Eligible Kate Spade Trademark Amount, the
Eligible Juicy Couture Trademark Amount and the Eligible Lucky Brand Trademark
Amount.
“Eligible Wholesale Inventory” means Eligible Inventory that is Wholesale
Inventory.
“Eligible Wholesale LC Inventory” means Eligible LC Inventory that is Wholesale
Inventory.
“EMU Legislation” means the legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.
“Environmental Laws” means all laws (including common law), rules, regulations,
codes, ordinances, orders-in-council, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating to the environment, preservation or reclamation
of natural resources, the management, presence, release or threatened release of
any harmful or deterious substance or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation or
remediation, fines, penalties or indemnities), directly or indirectly resulting
from or based upon (a) violation of or obligation under any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) the presence of or exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
“Environmental Reserve” means reserves relating to environmental matters
affecting any Eligible Real Property deemed necessary by the Administrative
Agent from time to time in its Permitted Discretion.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Loan Party, is treated as a single employer under
Section 414 of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30 day notice period referred to in Section 4043(c) of ERISA
is waived); (b) the existence with

 

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respect to any Plan of a non-exempt “prohibited transaction,” as defined in
Section 406 of ERISA and Section 4975(f)(3) of the Code; (c) any failure of any
Plan to satisfy the “minimum funding standard” applicable to such Plan (as such
term is defined in Sections 412 and 430 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(c) of the Code or
Section 302(c) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan, the failure to make by its due date a
required installment under Section 430(j) of the Code with respect to any Plan
or the failure of any Loan Party or ERISA Affiliate to make any required
contribution to any Multiemployer Plan; (e) the incurrence by any Loan Party or
any ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan including, without limitation, the imposition of any
Lien in favor of the PBGC or any Plan; (f) the receipt by any Loan Party or any
ERISA Affiliate from the PBGC or a Plan administrator of any notice relating to
an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan under Section 4042 of ERISA; (g) a determination that any
Plan is, or is expected to be, in “at risk” status (within the meaning of
Section 430 of the Code or Section 303 of ERISA); (h) the incurrence by any Loan
Party or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (i) the
receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt
by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA or in endangered or
critical status within the meaning of Section 432 of the Code or Section 305 of
ERISA.
“Euro” or “€” refers to the single currency of the Participating Member States.
“Euro Notes Documentation” means the Existing Euro Notes and all other
agreements and instruments executed in connection therewith.
“Euro Notes Refinancing Debt” has the meaning assigned to such term in
Section 6.01.
“Eurocurrency” when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
“European Account Transfer Trigger Event” means the first date after the
Effective Date on which a Full Cash Dominion Period is in effect.
“European Administrative Agent” means J.P. Morgan Europe Limited, in its
capacity as administrative agent for the Facility B Lenders hereunder, and its
successors in such capacity (or such of its Affiliates as it may designate from
time to time).
“European Availability” means (a) the lesser of (x) the European Sublimit and
(y) the sum of (i) the European Borrowing Base plus (ii) solely to the extent
the total Revolving Exposure relating to the European Borrower exceeds the
European Borrowing Base, the US Availability (calculated without giving effect
to any European US Borrowing Base Utilization), minus (b) the total Revolving
Exposure relating to the European Borrower.
“European Borrower” means Mexx Europe B.V.

 

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“European Borrowing Base” means, at any time, with respect to the Netherlands
Loan Parties, the sum of:
(a) 100% of the aggregate cash balances denominated in dollars, Euros, Sterling
or Yen in depositary accounts of the Netherlands Loan Parties constituting
investment accounts that are held at JPMorgan Chase Bank, N.A. or any Affiliate
thereof approved by the Administrative Agent and subject to an Account Control
Agreement and upon which the European Collateral Agent has a first priority
perfected Lien for the benefit of the Agents, the applicable Lenders and the
applicable Issuing Banks, subject only to Liens permitted pursuant to
Section 6.02(f), plus
(b) the product of (i) 85% multiplied by (ii) the Netherlands Loan Parties’
Eligible Accounts at such time, minus the Dilution Reserve related to the
Netherlands Loan Parties, plus
(c) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Netherlands Loan Parties’ Eligible Retail
Inventory (other than Eligible LC Inventory), valued at the lower of cost
(determined on a first-in-first-out basis) or market value, at such time, plus
(d) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Netherlands Loan Parties’ Eligible
Wholesale Inventory (other than Eligible LC Inventory), valued at the lower of
cost (determined on a first-in-first-out basis) or market value, at such time,
plus
(e) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Netherlands Loan Parties’ Eligible Retail
LC Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, plus
(f) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the Netherlands Loan Parties’ Eligible
Wholesale LC Inventory, valued at the lower of cost (determined on a
first-in-first-out basis) or market value, at such time, minus
(g) without duplication, applicable Reserves established by the Administrative
Agent in its Permitted Discretion.
The Administrative Agent may, in its Permitted Discretion, adjust Reserves
(subject to Section 9.02(b)) used in computing the Aggregate Borrowing Base and
the European Borrowing Base, with any such changes to be effective two Business
Days after delivery of notice thereof to

 

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the Borrower Representative and the Lenders in accordance with Section 11.04 of
this Agreement. The European Borrowing Base at any time shall be determined by
reference to the most recent European Borrowing Base Certificate delivered to
the Administrative Agent pursuant to Section 5.01(g) of this Agreement.
“European Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete by a Financial Officer of the Borrower Representative,
in substantially the form of Exhibit B-4.
“European Collateral Agent” means J.P. Morgan Europe Limited, in its capacity as
collateral agent and security trustee for itself, the Administrative Agent, the
Issuing Banks and the Lenders, and its successors in such capacity (or such of
its Affiliates as it may designate from time to time).
“European Group” means, collectively, each Netherlands Group Member, each German
Group Member and each UK Group Member.
“European Letter of Credit” means any Letter of Credit or similar instrument
(including a bank guarantee) acceptable to the applicable Issuing Bank issued
hereunder for the purpose of providing credit support for the European Borrower.
“European Loan Parties” means, individually and collectively, the Netherlands
Loan Parties, the German Loan Parties, the UK Loan Parties and any other Loan
Party that is organized in a member State of the European Union, Norway or
Switzerland.
“European Loans” means, individually and collectively, the European Revolving
Loans, the European Swingline Loans and the European Protective Advances.
“European Protective Advance” has the meaning assigned to such term in
Section 2.04.
“European Revolving Loan” means a Revolving Loan made to the European Borrower.
“European Security Agreement” means any document creating a security interest
over any Account of any Specified European Loan Party in favor of the European
Collateral Agent in a form satisfactory to the European Collateral Agent (that
is not already included within the definitions of German Security Agreement or
Netherlands Security Agreement), as the same may be amended, restated or
otherwise modified from time, and any other document creating a security
interest over property of any Specified European Loan Party in favor of the
European Collateral Agent in a form satisfactory to the European Collateral
Agent, on or after the date of this Agreement (that is not already included
within the definitions of German Security Agreement or Netherlands Security
Agreement), as the same may be amended, restated or otherwise modified from time
to time, and any Austrian Collateral Document (to the extent not otherwise a
European Security Agreement).
“European Sublimit” means, $100,000,000, as such sublimit may be reduced or
terminated in accordance with Section 2.09.

 

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“European Swingline Lender” means J.P. Morgan Europe Limited, in its capacity as
lender of European Swingline Loans hereunder, and its successors and assigns in
such capacity.
“European Swingline Loan” has the meaning set forth in Section 2.05(a)(iii).
“European US Borrowing Base Utilization” means the excess of (i) the total
Revolving Exposure relating to the European Borrower minus (i) the European
Borrowing Base.
“Events of Default” has the meaning assigned to such term in Article VII.
“Excluded Taxes” means, with respect to the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent, any Collateral Agent,
any Lender, any Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of any Loan Party hereunder or any other Loan
Document, (a) any Other Connection Taxes, (b) U.S. federal withholding Tax (with
respect to payments made by the Company), Canadian withholding tax (with respect
to payments made by the Canadian Borrower), Netherlands withholding tax (with
respect to payments made by the European Borrower), U.K. withholding tax (with
respect to payments made by the UK Borrower) whichever is applicable, imposed by
a Requirement of Law (after giving effect to the delivery of applicable tax
forms) in effect at the time a Foreign Lender (other than an assignee under
Section 2.19(b)) becomes a party hereto (or designates a new lending office
under Section 2.19(a)), with respect to any payment made by or on account of any
obligation of the Company, the Canadian Borrower, the European Borrower or the
UK Borrower, whichever is applicable, to such Foreign Lender (other than any
such payment made by such Person in a capacity other than as a Borrower), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts with respect to such withholding Tax under clause (a) of
Section 2.17, (c) Taxes attributable to a Lender’s (or, if required to provide
forms under Section 2.17(g), a Lender’s beneficial owner’s) failure to comply
with Section 2.17(g), (d) any withholding Tax imposed as a result of a Lender’s
failure to provide forms described in Section 2.17(g) if such failure is solely
due to the legal restrictions imposed under the secrecy laws of the jurisdiction
where such Lender is organized or (e) any U.S. Federal withholding Taxes imposed
by FATCA other than by reason of a Change in Law.
“Existing Convertible Notes” means the Company’s 6% Convertible Senior Notes due
2014.
“Existing Convertible Note Documents” means the indenture under which the
Existing Convertible Notes are issued and all other instruments, agreements and
other documents evidencing or governing the Existing Convertible Notes or
providing for any other right in respect thereof.
“Existing Credit Agreement” shall have the meaning set forth in the preamble
hereto.
“Existing Donna Karan License” means the License Agreement, dated as of
December 13, 1997, between Donna Karan Studio LLC, as licensor and LC LIBRA,
LLC, as licensee, as amended, restated, supplemented or otherwise modified on or
prior to the Original Effective Date.

 

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“Existing Euro Notes” means the Company’s existing €350,000,000 5% notes due
2013.
“Existing Letters of Credit” means the letters of credit referred to on Schedule
2.06 hereto, which letters of credit have been issued by an Issuing Bank or any
Lender.
“Existing Loan Documents” means the “Loan Documents” under and as defined in the
Existing Credit Agreement.
“Existing Mortgages” means each of the mortgages, deeds of trust or other
agreements made pursuant to the Existing Credit Agreement by any US Loan Party
in favor or the US Collateral Agent.
“Facility” means, individually and collectively, Facility A and Facility B.
“Facility A” means the Facility A Commitments and the extensions of credit made
thereunder.
“Facility A Commitment” means, with respect to each Facility A Lender, the
commitment, if any, of such Lender to make Facility A Revolving Loans and to
acquire participations in Facility A Letters of Credit, Facility A Protective
Advances and Facility A Swingline Loans, expressed as an amount representing the
maximum possible aggregate amount of such Lender’s Facility A Revolving Exposure
hereunder, as such commitment may be reduced or increased from time to time
pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant
to Section 9.04. The initial amount of each Lender’s Facility A Commitment is
set forth on the Commitment Schedule, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Facility A Commitment, as
applicable. The initial aggregate amount of the Lenders’ Facility A Commitments
is $150,000,000.
“Facility A Credit Exposure” means, with respect to any Facility A Lender at any
time, the sum of such Lender’s Facility A Revolving Exposure plus an amount
equal to such Lender’s Applicable Percentage of the aggregate principal amount
of Facility A Protective Advances outstanding at such time.
“Facility A LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Facility A Letters of Credit at such time for
the account of the Company plus (b) the aggregate amount of all LC Disbursements
in respect of Facility A Letters of Credit that have not yet been reimbursed by
or on behalf of the Company at such time. The Facility A LC Exposure of any
Lender at any time shall be its Applicable Percentage of the total Facility A LC
Exposure at such time.
“Facility A Lenders” means the Persons listed on the Commitment Schedule as
having a Facility A Commitment and any other Person that shall acquire a
Facility A Commitment pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.
“Facility A Letter of Credit” means any letter of credit or similar instrument
(including a bank guarantee) issued under this Agreement that is (a) reasonably
acceptable to the applicable Issuing Bank and (b) issued pursuant to Facility A
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the Company. For the avoidance of doubt, unless the context otherwise requires,
references herein to Facility A Letters of Credit shall include any time draft
presented under a Facility A Letter of Credit.
“Facility A Loans” means, individually and collectively, the Facility A
Revolving Loans, the Facility A Swingline Loans and the Facility A Protective
Advances.
“Facility A Obligations” means all unpaid principal of and accrued and unpaid
interest on the Facility A Loans (or which would have accrued but for the
commencement of any bankruptcy, insolvency, receivership or similar proceeding,
regardless of whether allowed or allowable in such proceeding), all Facility A
LC Exposure, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Loan Parties to the Facility A Lenders
or to any Facility A Lender, the Administrative Agent, any Issuing Bank in
respect of a Facility A Letter of Credit or any indemnified party arising under
the Loan Documents, in each case, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred.
“Facility A Protective Advance” has the meaning assigned to such term in
Section 2.04.
“Facility A Revolving Exposure” means, with respect to any Facility A Lender at
any time, the sum of the outstanding principal amount of such Lender’s Facility
A Revolving Loans and its Facility A LC Exposure plus an amount equal to its
Applicable Percentage of the aggregate principal amount of Facility A Swingline
Loans outstanding at such time.
“Facility A Revolving Loans” has the meaning assigned to such term in
Section 2.01.
“Facility A Swingline Loan” has the meaning assigned to such term in Section
2.05(a)(i).
“Facility A Swingline Sublimit” means $15,000,000.
“Facility B” means the Facility B Commitments and the extensions of credit made
thereunder.
“Facility B Borrower” means, individually and collectively, the Company (in its
capacity as a Borrower under Facility B), the European Borrower, the Canadian
Borrower and the UK Borrower.
“Facility B Commitment” means, with respect to each Facility B Lender, the
commitment, if any, of such Lender to make Facility B Revolving Loans and to
acquire participations in Facility B Letters of Credit, Facility B Protective
Advances and Facility B Swingline Loans, expressed as an amount representing the
maximum possible aggregate amount of such Lender’s Facility B Revolving Exposure
hereunder, as such commitment may be reduced or increased from time to time
pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant
to Section 9.04. The initial amount of each Lender’s Facility B Commitment is
set forth on the Commitment Schedule, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Facility B Commitment, as
applicable. The initial aggregate amount of the Lenders’ Facility B Commitments
is $200,000,000.

 

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“Facility B Credit Exposure” means, with respect to any Facility B Lender at any
time, the sum of such Lender’s Facility B Revolving Exposure plus an amount
equal to such Lender’s Applicable Percentage of the aggregate principal amount
of Facility B Protective Advances outstanding at such time.
“Facility B LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Facility B Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements in respect of Facility B
Letters of Credit that have not yet been reimbursed by or on behalf of a
Facility B Borrower at such time. The Facility B LC Exposure of any Lender at
any time shall be its Applicable Percentage of the total Facility B LC Exposure
at such time.
“Facility B Lenders” means the Persons listed on the Commitment Schedule as
having a Facility B Commitment and any other Person that shall acquire a
Facility B Commitment pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.
“Facility B Letter of Credit” means any letter of credit or similar instrument
(including a bank guarantee) issued under this Agreement that is (a) acceptable
to the applicable Issuing Bank and (b) issued pursuant to Facility B for the
purpose of providing credit support for a Facility B Borrower. For the avoidance
of doubt, unless the context otherwise requires, references herein to Facility B
Letters of Credit shall include any time draft presented under a Facility B
Letter of Credit.
“Facility B Loans” means, individually and collectively, the Facility B
Revolving Loans, the Facility B Swingline Loans and the Facility B Protective
Advances.
“Facility B Obligations” means all unpaid principal of and accrued and unpaid
interest on the Facility B Loans (or which would have accrued but for the
commencement of any bankruptcy, insolvency, receivership or similar proceeding,
regardless of whether allowed or allowable in such proceeding), all Facility B
LC Exposure, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Loan Parties to the Facility B Lenders
or to any Facility B Lender, the Administrative Agent, the Issuing Bank in
respect of a Facility B Letter of Credit or any indemnified party arising under
the Loan Documents, in each case, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred.
“Facility B Protective Advances” means, collectively, the European Protective
Advances, the Canadian Protective Advances, the UK Protective Advances and the
Facility B US Protective Advances.
“Facility B Revolving Exposure” means, with respect to any Facility B Lender at
any time, the sum of the outstanding principal amount of such Lender’s Facility
B Revolving Loans and its Facility B LC Exposure plus an amount equal to its
Applicable Percentage of the aggregate principal amount of Facility B Swingline
Loans outstanding at such time.
“Facility B Revolving Loans” has the meaning assigned to such term in
Section 2.01.

 

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“Facility B Swingline Loans” means, collectively, the European Swingline Loans,
the Canadian Swingline Loans, the UK Swingline Loans and the Facility B US
Swingline Loans.
“Facility B Swingline Sublimit” means $40,000,000.
“Facility B US Protective Advance” has the meaning assigned to such term in
Section 2.04.
“Facility B US Swingline Loan” has the meaning assigned to such term in Section
2.05(a)(ii).
“FATCA” means Section 1471 or 1472 of the Code and regulations or official
interpretations thereof.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
“Financial Officer” means the Executive Vice President — Chief Financial
Officer, chief financial officer, principal accounting officer, treasurer,
assistant treasurer, controller or assistant controller or similar officer of
the Borrower Representative or any Loan Party.
“Finnish Loan Party” has the meaning assigned to such term in Section 10.01(j).
“Fixed Charges” means, with reference to any period, without duplication,
Consolidated Interest Expense required to be paid in cash, plus income taxes
paid in cash (net of any income tax refund received, but in no event less than
zero), plus scheduled principal payments on Indebtedness made during such period
(including Capital Lease Obligation payments), plus dividends or distributions
paid in cash, plus cash contributions to any Pension Plan all calculated for the
Company and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each
fiscal month of the Company for the most-recently ended twelve fiscal months, of
(a) Consolidated EBITDA minus the unfinanced portion of Capital Expenditures, to
(b) Fixed Charges, all calculated for the Company and its Subsidiaries on a
consolidated basis in accordance with GAAP. Notwithstanding anything to the
contrary set forth herein, for purposes of calculating the Fixed Charge Coverage
Ratio, Fixed Charge Coverage Ratio shall include discontinued operations of the
Company and its Subsidiaries, as defined by GAAP, until the applicable restated
financial statements reflecting such discontinuation are available.
“Flood Insurance” has the meaning assigned to such term in Section 4.01(o)(v).

 

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“Foreign Benefit Arrangements” means any employee benefit arrangement mandated
by non-US law that is maintained or contributed to by any Loan Party or any of
its Subsidiaries or Affiliates, including for the avoidance of doubt any
Canadian Benefit Plan.
“Foreign Borrowing Base” means the aggregate amount of the Canadian Borrowing
Base, the UK Borrowing Base and the European Borrowing Base.
“Foreign Lender” means any Lender or Issuing Bank, (a) with respect to any
Borrower other than the Company and any Tax, that is treated as foreign or
non-resident by the jurisdiction imposing such Tax, (b) with respect to the
Company, (1) that, is not a “United States person” as defined by section
7701(a)(30) of the Code (a “US Person”), or (2) that is a partnership or other
entity treated as a partnership for United States federal income tax purposes
which is a US Person, but only to the extent the beneficial owners (including
indirect partners if its direct partners are partnerships or other entities
treated as partnerships for United States federal income tax purposes are US
Persons) are not US Persons.
“Foreign Loan Parties” means, individually and collectively, the Loan Parties
other than the US Loan Parties.
“Foreign Pension Plan” means any employee benefit plan (within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to
US law and is maintained or contributed to by any Loan Party or any of its
Subsidiaries or Affiliates, including any Canadian Pension Plan.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“Free Reserves Available for Distribution” has the meaning assigned to such term
in Section 10.01(n)(ii).
“French Guaranteed Obligations” means, with respect to any French Loan Guarantor
(i) all Facility B Obligations, (ii) all Banking Services Obligations, (iii) all
Acceptance Obligations and (iv) all Secured Swap Obligations, in each case, of
or owing by any European Loan Party and/or Canadian Loan Party to one or more
Lenders or their respective Affiliates, and any other obligations and other
actual or contingent liabilities from time to time incurred from time to time
incurred by a European Loan Party and/or a Canadian Loan Party to any Guaranteed
Party under the Loan Documents; provided that the amount of all such obligations
shall be limited to all outstanding amounts borrowed by the relevant French Loan
Guarantor from the European Borrower (it being understood, for the avoidance of
doubt, that no obligations owed by any US Loan Party to any Guaranteed Party
shall be guaranteed by a French Loan Guarantor under this Agreement).
“French Intercompany Loan” means the outstanding amount of any one or all of the
intercompany loans advanced by the European Borrower to Mexx Boutiques SARL or
to any other French Loan Guarantor.
“French Loan Guarantor” means (i) Mexx Boutiques SARL a French société à
responsabilité limitée registered under number 343 317 699 RCS Paris whose
registered office is

 

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at 23 Bis Rue Nieuport, 92150 Suresnes (France) and (ii) any other Loan
Guarantor incorporated in France.
“Full Cash Dominion Period” means any Level 1 Minimum Aggregate Availability
Period (provided that a Full Cash Dominion Period may be discontinued no more
than twice in any period of twelve consecutive months).
“Funding Accounts” has the meaning assigned to such term in Section 4.01(g).
“GAAP” means generally accepted accounting principles in the United States of
America.
“German Account Pledge Agreement” means any document governed by German law
creating a security interest over any Account of any German Loan Party or of the
European Borrower in favor of the European Collateral Agent in a form
satisfactory to the European Collateral Agent.
“German Bankruptcy Reserve” means reserves for fees payable to an insolvency
administrator pursuant to Section 171 of the German Insolvency Code
(Insolvenzordnung).
“German Global Assignment Agreement” means a German assignment agreement
creating a security interest over receivables of any German Loan Party in favor
of the European Collateral Agent in a form satisfactory to the European
Collateral Agent.
“German Group Member” means, collectively, any Subsidiary of the Company
(including the Designated German Subsidiaries) incorporated or otherwise formed
under the laws of Germany.
“German IP Transfer and Assignment Agreement” means any document creating a
security interest over all intellectual property rights, patents, trademarks,
know-how and utility models owned by any German Loan Party in favor of the
European Collateral Agent and in a form approved by the European Collateral
Agent.
“German Land Charge Deed” means all deeds entered into by any German Loan Party
in a form approved by the European Collateral Agent pursuant to which the German
Loan Party grants a land charge on its real estate property in favor of the
European Collateral Agent, accompanied by an acceptance of debt (Übernahme der
perönlichen Haftung) being immediately enforceable (Unterwerfung unter die
sofortige Zwangsvollstreckung) in accordance with section 800 of the German code
of civil procedure (Zivilproszessordnung) in favor of the European Collateral
Agent.
“German Law Security Agreement” has the meaning assigned to such term in
Article VIII.
“German Loan Party” means any Loan Party organized under the laws of Germany.

 

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“German Partnership Interest Pledge Agreement” means any agreement creating a
security interest over the partnership interests in Mexx Direct GmbH & Co. KG or
any other Germany Loan Party organized as a limited partnership under German
law.
“German Security Agreement” means each German Account Pledge Agreement, each
German Global Assignment Agreement, each German IP Transfer and Assignment
Agreement, each German Land Charge Deed, each German Partnership Interest Pledge
Agreement, each German Security Purpose Agreement, each German Share Pledge
Agreement, each German Security Transfer Agreement, and each German Security
Trust Agreement as the same may be amended, restated or otherwise modified from
time to time, and any other pledge or security agreement entered into or
acknowledged or consented to (as appropriate), after the date of this Agreement,
by any other German Loan Party (as required by this Agreement or any other Loan
Document for the purpose of creating a Lien on the property of any German Loan
Party (or any other property located in Germany)), as the same may be amended,
restated or otherwise modified from time to time.
“German Security Purpose Agreement” means any document determining the security
purpose of the security interest created under each German Land Charge Deed and
entered into by each German Loan Party in a form approved by the European
Collateral Agent.
“German Security Transfer Agreement” means any document creating a security
interest over all assets (including but not limited to Inventory, stock
machinery, equipment, fittings etc.) owned by any German Loan Party or any
Netherlands Loan Party and situated on any German Loan Party’s business
premises, in favor of the European Collateral Agent and in a form approved by
the European Collateral Agent.
“German Security Trust Agreement” means any document determining how the
security created by or pursuant to any German Security Agreement is to be held
and administered by the European Administrative Agent for and on behalf of the
Lenders, in a form approved by the European Collateral Agent.
“German Share Pledge Agreement” means any document creating a security interest
over the shares in each German Loan Party, in favor of the European Collateral
Agent in a form approved by the European Collateral Agent.
“Global Headquarters” means the Company’s global headquarters located at 1
Claiborne Avenue, North Bergen, New Jersey 07047.
“Governmental Authority” means the government of the United States of America,
Canada, the Netherlands, Germany, Austria, England and Wales or any other nation
or any political subdivision thereof, whether state, provincial, territorial,
municipal or local; the European Central Bank, the Council of Ministers of the
European Union or any other supranational body; 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.

 

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“Greek Account Pledge Agreement” means a document creating a security interest
over any Account of any Greek Loan Party in favor of the European Collateral
Agent in a form satisfactory to the European Collateral Agent.
“Greek Loan Party” means any Loan Party organized under the laws of Greece.
“Group Member” means any Loan Party other than an Account Party.
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
other obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.
“Guaranteed Parties” has the meaning assigned to such term in Section 10.01.
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, contaminants, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to or that
could result in liability under any Environmental Law.
“High Season” means all times other than Low Season.
“Hong Kong Intercompany Loan” means the intercompany loan made by the Company to
Mexx Europe International BV on May 23, 2001, and assigned by the Company to Liz
Claiborne International Limited on December 4, 2008.
“Hong Kong Intercompany Receivable” means the intercompany receivable, owing to
Liz Claiborne International Limited from the Company and certain of its
Subsidiaries, representing accrued commissions for sourcing and related
services.
“Hong Kong Subordination Agreement” means that certain Subordination Agreement,
dated as of January 12, 2009, among Liz Claiborne International Limited and the
Loan Parties, in form and substance reasonably acceptable to the Administrative
Agent.
“Immaterial Amendment” has the meaning assigned to such term in Section 4.02.

 

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“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments or bankers’ acceptances, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty for
Indebtedness, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (k) obligations under any liquidated earn-out
and (l) any other Off-Balance Sheet Liability. The Indebtedness of any Person
shall include, without duplication, the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnification Claim” has the meaning set forth in Section 9.27(a).
“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.
“Indemnitee” has the meaning assigned to such term in Section 9.03(b).
“Information” has the meaning assigned to such term in Section 9.12.
“Insolvency Laws” means each of the Bankruptcy Code, the Insolvency Act 1986,
the Council Regulation 1346/2000/EC on insolvency proceedings (European Union),
the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement
Act (Canada), the Winding-Up and Restructuring Act (Canada) and any other
applicable state, provincial, territorial or federal bankruptcy laws, each as
now and hereafter in effect, any successors to such statutes and any other
applicable insolvency or other similar law of any jurisdiction, including any
law of any jurisdiction permitting a debtor to obtain a stay or a compromise of
the claims of its creditors against it and including any rules and regulations
pursuant thereto.
“Intellectual Property” means, individually and collectively, all worldwide
intellectual property and proprietary rights of any kind, including but not
limited to, trademarks, service marks, tradenames, copyrights, patents, trade
secrets, industrial designs, internet domain names, including any applications
and registrations pertaining thereto and with respect to trademarks, service
marks and tradenames, the goodwill of the business symbolized thereby and
connected with the use thereof.
“Intercompany Obligations” means loans, advances, trade payables, credit
financing or borrowings among Mexx Europe Holding BV and its direct or indirect
Subsidiaries.

 

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“Intercompany Note” means the intercompany note dated as of January 12, 2009
entered into by the Loan Parties (as the same has been amended, supplemented or
otherwise modified from time to time).
“Intercompany Services Receivables” means intercompany receivables owing from
Loan Parties to non-Loan Parties representing accrued payables in respect of
services rendered to such Loan Parties, solely to the extent that the
obligations of the Loan Parties in connection therewith are subordinated to the
Obligations on terms reasonably satisfactory to the Administrative Agent.
“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as
of January 12, 2009, substantially in the form of Exhibit H hereto, among the US
Collateral Agent, the Administrative Agent, the US Loan Parties and SunTrust
Equity Funding, LLC.
“Interest Election Request” means a request by the Borrower Representative (or
the applicable Borrower) to convert or continue a Borrowing of Revolving Loans
in accordance with Section 2.08.
“Interest Payment Date” means (a) with respect to any ABR Loan, Canadian Prime
Rate Loan or Overnight LIBO Loan (including, in each case, a Swingline Loan),
the first day of each calendar month, (b) with respect to any Eurocurrency Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period, (c) with respect to any Swingline Loan,
the day that such Loan is required to be repaid and (d) with respect to any
Loan, the Maturity Date.
“Interest Period” means with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending (i) on the numerically
corresponding day in the calendar month that is one, two, three or six (or, if
agreed to by all Lenders under the relevant Facility, 12) months thereafter, as
the Borrower Representative may elect or (ii) solely as explicitly set forth in
Section 2.05(c), the date that is one week thereafter; provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurocurrency Borrowing only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) in the case of clause (i) above, any
Interest Period pertaining to a Eurocurrency Borrowing that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made, and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
“Interim Calculation Date” means each Business Day occurring during an Interim
Period.
“Interim Period” means any period commencing on the first Business Day after any
Settlement Request Date with respect to any European Swingline Loan and ending
on the Settlement Date that is the associated therewith.

 

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“Inventory” means, individually and collectively, “Inventory,” as referred to in
any Security Agreement.
“Investment Grade Account Debtor” means an Account Debtor that, at the time of
determination, has a corporate credit rating and/or family rating, as
applicable, of BBB- or higher by S&P or Baa3 or higher by Moody’s.
“Irish Debenture” means the debenture, dated the date hereof, from Juicy Couture
Ireland Ltd. in favor of J.P. Morgan Europe Limited.
“Issuing Bank” means, individually and collectively, JPMorgan Chase Bank, N.A.,
Bank of America, N.A. and Wells Fargo Bank, National Association, together with
any other Lenders reasonably acceptable to the Administrative Agent, each in its
capacity of the issuer of Letters of Credit and its successors in such capacity
as provided in Section 2.06(i). Any Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank (including pursuant to assignments of existing Letters of Credit), in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued (including following any such assignment) by such
Affiliate.
“ITA” means the Income Tax Act (Canada), as amended.
“Italian Collateral Document” has the meaning set forth in Article VIII.
“JCPenney License Agreement” means the License Agreement by and between the
Company, J. C. Penney Corporation, Inc., J. C. Penney Company, Inc. and their
subsidiaries, dated as of October 7, 2009, as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
“Joinder Agreement” has the meaning assigned to such term in Section 5.14.
“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.
“Juicy Couture Trademark” means any current or future Trademarks owned,
controlled, licensed or used by Juicy Couture, Inc. or any of its Affiliates or
the successors or assigns thereof that comprise or contain the name “Juicy”
and/or “Couture” and/or any variations, stylizations or derivatives of any such
Trademarks.
“Juicy Debenture” means the debenture, dated as of the date hereof, between the
UK Borrower and the European Collateral Agent, as the same may be amended,
restated or otherwise modified from time to time.
“Kate Spade JV Agreement” means the agreement governing the joint venture by and
between Kate Spade LLC and Sanei International Co., Ltd.
“Kate Spade Trademark” means any current or future Trademarks owned, controlled,
licensed or used by Kate Spade LLC or any of its Affiliates or the successors or
assigns thereof

 

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that comprise or contain the name “Kate” and/or “Spade” and/or any variations,
stylizations or derivatives of any such Trademarks.
“Law of 2002” has the meaning set forth in Section 10.01(i).
“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).
“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter
of Credit, including in respect of a time draft presented thereunder. The date
of an LC Disbursement shall be the date of payment by such Issuing Bank under
such Letter of Credit or a time draft presented thereunder, as the case may be.
“LC Exposure” means, at any time, the sum of the Facility A LC Exposure and the
Facility B LC Exposure.
“LC Sublimit” $200,000,000; provided that the aggregate LC Exposure in respect
of standby Letters of Credit shall not exceed $65,000,000.
“LCE Debenture” means the debenture, dated as of the date hereof, between the
Liz Claiborne Europe and the European Collateral Agent, as the same may be
amended, restated or otherwise modified from time to time.
“Lead Arrangers” means, individually or collectively, J.P. Morgan Securities
Inc., Banc of America Securities LLC, Wells Fargo Capital Finance, LLC and
SunTrust Robinson Humphrey, Inc., in their capacity as joint lead arrangers, and
each of their successors in such capacity.
“Lenders” means the Facility A Lenders and the Facility B Lenders. Unless the
context otherwise requires, the term “Lenders” includes the Swingline Lenders.
“Letter of Credit” means, individually and collectively, each Facility A Letter
of Credit and each Facility B Letter of Credit.
“Letter of Credit Request” has the meaning assigned to such term in
Section 2.06(a).
“Licensed Inventory Reserve” means reserves for accrued royalties owing to Donna
Karan Studio or any Affiliate thereof at any time that the most recent
Collateral Report or Inventory appraisal delivered to the Administrative Agent
or the US Collateral Agent indicates a turnover rate for the applicable
Inventory that is equal to or greater than 75 days.
“LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest
Period, the rate appearing on the applicable Reuters Screen (or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent or the
European Administrative Agent, as applicable, from time to time for purposes of
providing quotations of interest rates applicable to deposits in the relevant
currency in the London interbank market) at approximately 11:00 a.m., London
time, on the Quotation Day, as the rate for deposits in the relevant currency
with a maturity comparable to such Interest

 

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Period. In the event that such rate is not available at such time for any
reason, then the “LIBO Rate” with respect to such Eurocurrency Borrowing for
such Interest Period shall be the rate at which deposits in the relevant
currency of $5,000,000 (or, the case of a currency other than dollars, an
approximate equivalent thereof as determined by the Administrative Agent) and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds to
prime banks in the London interbank market at approximately 11:00 a.m., London
time on the Quotation Day.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
“Liz Trademark” means any current or future Trademarks owned, controlled,
licensed or used by the Company or any of its Affiliates or the successors or
assigns thereof that comprise or contain the name “Liz” and/or “Claiborne”
and/or any variations, stylizations or derivatives of any such Trademarks.”
“Loan Documents” means this Agreement, any promissory notes issued pursuant to
the Agreement, any Letter of Credit applications, the Collateral Documents, the
Loan Guaranty, the Intercreditor Agreement, the Specified Loan Documents and all
other agreements, instruments, documents and certificates identified in
Section 4.01 executed and delivered to, or in favor of, the Administrative
Agent, any Collateral Agent or any Lenders and including all other pledges,
powers of attorney, consents, assignments, contracts, notices, letter of credit
agreements and all other written matter whether heretofore, now or hereafter
executed by or on behalf of any Loan Party, or any Responsible Officer of any
Loan Party, and delivered to the Administrative Agent, any Collateral Agent or
any Lender in connection with the Agreement or the transactions contemplated
thereby. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to the Agreement or such Loan Document as the same may be in effect at any
and all times such reference becomes operative.
“Loan Guarantor” means (a) each US Loan Party, with respect to the Secured
Obligations of the other US Loan Parties, the Canadian Loan Parties and the
European Loan Parties, (b) each Canadian Loan Party, with respect to the Secured
Obligations of the other Canadian Loan Parties and the European Loan Parties,
and (c) each European Loan Party, with respect to the Secured Obligations of the
other European Loan Parties and the Canadian Loan Parties.
“Loan Guaranty” means (i) Article X of this Agreement and (ii) each separate
guaranty, in form and substance reasonably satisfactory to the Administrative
Agent, delivered by any Foreign Subsidiary (which guaranty shall be governed by
the laws of the country in which such Foreign Subsidiary is located if the
Administrative Agent requests that such law govern such guaranty), in each case
as it may be amended or modified and in effect from time to time.

 

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“Loan Parties” means (i) the Company, the Company’s domestic Subsidiaries and
any other Subsidiaries of the Company that guarantee (or are directly liable
for) the Synthetic Lease Obligations, (ii) the European Borrower and its
wholly-owned Subsidiaries organized under the laws of the Netherlands or England
and Wales, (iii) the Canadian Borrower and its wholly-owned Subsidiaries
organized under the laws of Canada or any province, territory or other political
subdivision thereof, (iv) the Designated German Subsidiaries and each of their
wholly-owned Subsidiaries organized under the laws of Germany, (v) the UK
Borrower and its wholly-owned Subsidiaries organized under the laws of England
and Wales or Ireland, in each case with respect to clauses (i) through
(v) above, to the extent such entity is a party to any Loan Guaranty, and (vi)
each other Subsidiary who is a party hereto on the date hereof or becomes a
party to this Agreement pursuant to a Joinder Agreement or executes a separate
Loan Guaranty and their respective successors and assigns; provided that the
Administrative Agent and the Company may agree in writing that any inactive or
less than wholly-owned Subsidiary shall not be a Loan Party hereunder.
“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Revolving Loans, Swingline Loans and Protective Advances
and including BA Drawings.
“Local Time” means, (a) local time in London with respect to the times for the
determination of “Dollar Equivalent”, for the receipt of Borrowing Requests for
Facility B Loans other than Canadian Loans, and Facility B Letter of Credit
Requests (other than in respect of Canadian Letters of Credit) to an Issuing
Bank, of any disbursement by the European Administrative Agent of Facility B
Loans other than Canadian Loans and for payment by the Borrowers with respect to
Facility B Loans other than Canadian Loans and reimbursement obligations in
respect of Facility B Letters of Credit other than Canadian Letters of Credit,
(b) local time in New York, with respect to the times for the receipt of
Borrowing Requests of Facility A Loans, Facility A Letter of Credit Requests to
an Issuing Bank, for receipt and sending of notices by and disbursement by the
Administrative Agent or any Lender and any Issuing Bank and for payment by the
Company with respect to Facility A Loans and reimbursement obligations in
respect of Facility A Letters of Credit, (c) local time in London, with respect
to the times for the determination of “LIBO Rate” and “Overnight LIBO Rate”,
(d) local time in Toronto, with respect to the times for receipt of Borrowing
Requests of Canadian Loans, Canadian Letter of Credit Requests to an Issuing
Bank, for receipt and sending of notices by and disbursement by the Canadian
Administrative Agent or any Lender and any Issuing Bank and for payment by the
Canadian Borrower with respect to Canadian Loans and reimbursement obligations
in respect of Canadian Letters of Credit, (e) otherwise, if a place for any
determination is specified herein, the local time at such place of determination
and (f) otherwise, New York time.
“Lock Box Agreement” means, individually and collectively, each “Lock Box
Agreement” referred to in any Security Agreement.
“Low Season” means, for any period of determination of any Borrowing Base,
(i) with respect to Retail Inventory, the period commencing the first day of
each fiscal year of the Company and ending the last day of the August fiscal
month of the Company of such year and (ii) with respect to Wholesale Inventory,
the period commencing the first day of the November

 

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fiscal month of the Company of each year and ending the last day of the July
fiscal month of the Company of the following year.
“Lucky Brand Purchase Agreement” means that certain Stockholders Agreement,
dated May 21, 1999, by and among Lucky Brand Dungarees, Inc., a Delaware
corporation, the Company, Montesano Family Trust, Perlman Family Trust and Trent
D. Merrill as in effect on the Original Effective Date (including as amended by
the First Amendment to the Stockholders Agreement, dated as of January 28, 2005
and the Second Amendment to the Stockholders Agreement, dated as of
September 20, 2007).
“Lucky Brand Trademark” means any current or future Trademarks owned,
controlled, licensed or used by Lucky Brand Dungarees, Inc. or any of its
Affiliates or the successors or assigns thereof that comprise or contain the
name “Lucky” and/or “Dungarees” and/or any variations, stylizations or
derivatives of any such Trademarks.
“Luxembourg Loan Guarantor” has the meaning set forth in Section 10.01(i).
“Mac & Jac Purchase Agreement” means the Earn-Out Purchase Agreement by and
among 0745557 B.C. LTD., Liz Claiborne, Inc., Eric Karls and Eric Karls, as
Trustee of The Karls Family Trust, dated as of January 26, 2006, as in effect on
the Original Effective Date.
“Management Notification” has the meaning set forth in Section 10.10(c).
“Mandatory Cost” means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.01(c).
“Margin Stock” means “margin stock”, as such term is defined in Regulation U of
the Board.
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, operations or condition, financial or otherwise, of the Loan
Parties, taken as a whole, (b) the ability of any Loan Party to perform any of
its obligations under the Loan Documents to which it is a party, (c) the
Collateral, any Collateral Agent’s Lien (for the benefit of the Agents, the
applicable Lenders and the applicable Issuing Banks) on the Collateral, or the
priority of any such Lien, or (d) the rights of or benefits available to the
Administrative Agent, European Administrative Agent, Canadian Administrative
Agent, any Collateral Agent, any Issuing Bank or the Lenders under any Loan
Document.
“Material Indebtedness” means (i) Indebtedness (other than the Loans and Letters
of Credit), or obligations in respect of one or more Swap Agreements, of any one
or more of the Company and its Subsidiaries in an aggregate principal amount
exceeding $40,000,000 and (ii) the Synthetic Lease Obligations. For purposes of
determining Material Indebtedness, the “obligations” of any Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time.

 

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“Material Subsidiary” means, as of any date of determination, any Subsidiary
(a) whose total assets at the last day of the Test Period ending on the last day
of the most recent fiscal period for which financials have been or were required
to be delivered pursuant to Section 5.01(a), (b) or (c) were equal to or greater
than 5.0% of the Total Assets of the Company and its Subsidiaries at such date
or (b) whose revenues during such Test Period were equal to or greater than 5.0%
of the consolidated revenues of the Company and its Subsidiaries for such
period, in each case determined in accordance with GAAP; provided that (x) if,
at any time and from time to time after the Effective Date, Subsidiaries that
are not Material Subsidiaries have, in the aggregate, (i) total assets at the
last day of such Test Period equal to or greater than 5.0% of the Total Assets
of the Company and its Subsidiaries at such date or (ii) revenues during such
Test Period equal to or greater than 5.0% of the consolidated revenues of the
Company and its Subsidiaries for such period, in each case determined in
accordance with GAAP, then the Company shall, on the date on which financial
statements for such fiscal period are delivered pursuant to this Agreement,
designate in writing to the Administrative Agent one or more of such
Subsidiaries as “Material Subsidiaries” and (y) each Borrower (other than
Company) shall at all times be designated a “Material Subsidiary”.
“Maturity Date” means the earliest to occur of (i) August 6, 2014 or (ii) any
earlier date on which the Commitments are reduced to zero or otherwise
terminated pursuant to the terms hereof; provided that (x) in the event that the
Existing Euro Notes are not refinanced, purchased or defeased prior to April 8,
2013, the Maturity Date, as determined pursuant to clause (i) hereof, shall be
April 8, 2013 (it being understood that if any such refinancing or extension
shall provide for a maturity date that is earlier than 91 days following
August 6, 2014, the Maturity Date, as determined pursuant to clause (i) hereof,
shall be the date that is 91 days prior to the maturity date of such notes); and
(y) in the event that the Existing Convertible Notes are not refinanced,
purchased or defeased prior to March 15, 2014, the Maturity Date, as determined
pursuant to clause (i) hereof, shall be March 15, 2014 (it being understood that
if any such refinancing or extension shall provide for a maturity date that is
earlier than 91 days following August 6, 2014, the Maturity Date, as determined
pursuant to clause (i) hereof, shall be the date that is 91 days prior to the
maturity date of such notes).
“Maximum Liability” has the meaning assigned to such term in Section 10.09.
“Maximum Rate” has the meaning assigned to such term in Section 9.17.
“Mexx Trademark” means any current or future Trademarks owned, controlled,
licensed or used by Mexx Europe B.V. or any of its Affiliates or the successors
or assigns thereof that comprise or contain the name “Mexx” and/or variations,
stylizations, or derivatives of any such Trademarks.
“Minimum Aggregate Availability Period” means (including by reference to the
Levels described below), any period (a) commencing on the first date that
Aggregate Availability for a period of three consecutive Business Days (or, with
respect to any Level 1 Minimum Aggregate Availability Period, one Business Day)
is less than the greater of:

     
Level 1:
  (i) $65,000,000 and (ii) an amount equal to 17.5% of the Commitments then in
effect;

 

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Level 2:
  (i) $87,500,000 and (ii) an amount equal to 25% of the Commitments then in
effect, but more than Level 1; and
 
   
Level 3:
  (i) $109,375,000 and (ii) an amount equal to 31.25% of the Commitments then in
effect, but more than Level 1 and Level 2;

and (b) ending after Aggregate Availability is greater than the amounts set
forth above (with respect to the applicable Level) for 30 consecutive days. For
the avoidance of doubt, at any time that Aggregate Availability is equal to or
greater than the amounts set forth in Level 2 or Level 3 above, Aggregate
Availability shall also be deemed to be greater than the applicable Level(s)
below such Level of Aggregate Availability and each Minimum Aggregate
Availability Period Level shall include each lesser Level.
“Moody’s” means Moody’s Investors Service, Inc.
“Mortgage” means any mortgage, hypothec, deed of trust, debenture, legal charge
or other agreement which conveys or evidences a Lien in favor of the applicable
Collateral Agent, for the benefit of the Agents, the applicable Lenders and the
applicable Issuing Banks, on real property of a Loan Party, including any
amendment, modification or supplement thereto.
“Mortgaged Properties” means the real properties listed on Schedule 1.01(d) and
noted thereon as to which the applicable Collateral Agent for the benefit of the
Agents, the applicable Lenders and the applicable Issuing Banks shall be granted
a Lien pursuant to the Mortgages.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net Orderly Liquidation Value” means, with respect to Inventory, equipment or
intangibles of any Person, the orderly liquidation value thereof as determined
in a manner reasonably acceptable to the Administrative Agent by an appraiser
acceptable to the Administrative Agent, net of all costs of liquidation thereof.
“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including any cash received in respect of any non-cash
proceeds (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but excluding any interest payments), but
only as and when received, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback
transaction), the amount of all payments required to be made as a result of such
event to repay Indebtedness (other than Loans and (with respect to dispositions
of Collateral) Synthetic Lease Obligations) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event and (iii) the amount
of all taxes paid (or reasonably estimated to be payable) and the amount of any
reserves established to fund contingent liabilities

 

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reasonably estimated to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly attributable to such
event (as determined reasonably and in good faith by a Financial Officer of the
Borrower Representative).
“Netherlands” means the Kingdom of the Netherlands in Europe.
“Netherlands Group Member” means any Subsidiary of the Company (including the
European Borrower) incorporated or otherwise formed under the laws of the
Netherlands.
“Netherlands Intercompany Receivable Amount” means, on any date, an amount equal
to the excess of (i) the aggregate amount of Specified Cash Collections held by
the Subsidiaries of the European Borrower over (ii) €400,000.
“Netherlands Loan Party” means, individually and collectively, any Loan Party
(including the European Borrower) incorporated or otherwise formed under the
laws of the Netherlands; provided that for purposes of the definition of the
“European Borrowing Base”, Netherlands Loan Party shall include Liz Claiborne
Europe to the extent it continues to be a Loan Party hereunder.
“Netherlands Security Agreement” means (a) each Netherlands law
(undisclosed) pledge over receivables, (b) each Netherlands law
(disclosed) pledge over receivables, (c) each Netherlands law (disclosed) pledge
over intercompany receivables, (d) each Netherlands law non-possessory pledge of
movable assets, (e) each Netherlands law pledge over Intellectual Property
rights, (f) each Netherlands law (disclosed) pledge over a bank account or
(g) each Netherlands Share Pledge Agreement, in each case dated as of
January 13, 2009, among any Netherlands Loan Party and the European Collateral
Agent, as the same may be amended, restated or otherwise modified from time to
time, and any other pledge or security agreement entered into, after the date of
this Agreement, by any Netherlands Loan Party (as required by this Agreement or
any other Loan Document for the purpose of creating a Lien on the property of
any Netherlands Loan Party (or any other property located in the Netherlands)),
as the same may be amended, restated or otherwise modified from time to time.
“Netherlands Share Pledge Agreement” means any document creating a security
interest over the shares in each Netherlands Loan Party, in favor of the
European Collateral Agent in a form approved by the European Collateral Agent.
“Non BA Lender” means a Lender that cannot or does not as a matter of policy
accept bankers’ acceptances.
“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(e).
“Non-Funding Lender” has the meaning assigned to such term in Section 2.07(b).
“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.
“Norwegian Loan Party” means, individually and collectively, any Loan Party
incorporated or otherwise formed under the laws of Norway.

 

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“Obligated Party” has the meaning assigned to such term in Section 10.02.
“Obligations” means the Facility A Obligations and the Facility B Obligations.
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person (other than operating leases).
“Ohio Property” means the land, building and improvements located at 8741
Jacquemin Drive, West Chester, Ohio, together with all rights, easements and
appurtenances thereto, and all fixtures and equipment located thereon or used in
connection therewith which as of the Effective Date are subject to the Synthetic
Lease and/or related capital leases, as applicable.
“Option Assets” has the meaning assigned to such term under the JCPenney License
Agreement.
“Original Effective Date” means the “Effective Date” as defined in the Existing
Credit Agreement.
“Other Connection Taxes” means, with respect to the Administrative Agent, the
European Administrative Agent, the Canadian Administrative Agent, any Collateral
Agent, any Lender, any Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of any Loan Party hereunder or under any
other Loan Document, (a) Taxes imposed as a result of a present or former
connection between such recipient and the jurisdiction imposing such Tax (other
than connections arising from such recipient having executed, delivered, or
become a party to, performed its obligations or received payments under,
received or perfected a security interest under, sale or assignment of an
interest in any Loan or Loan Document, engaged in any other transaction pursuant
to, or enforced, any Loan Documents) and (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the relevant Borrower is located.
“Other Taxes” means all present or future stamp, court or documentary Taxes and
any other excise, property, intangible, recording, filing or similar Taxes
arising from any payment made under, from the execution, delivery, performance,
enforcement or registration of, or from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document.
“Overnight LIBO” means, when used in reference to any Loan or Borrowing, whether
such Loan or the Loan comprising such Borrowing accrues interest at a rate
determined by reference to the Overnight LIBO Rate.
“Overnight LIBO Rate” means, with respect to any Overnight LIBO Borrowing or
overdue amount, (a) the rate of interest per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) at which overnight deposits in Euros,
Sterling, Canadian Dollars, dollars or Yen, as applicable, in an amount
approximately equal to the amount with respect to which such rate is

 

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being determined, would be offered for such day by a branch or Affiliate of
JPMCB in the London interbank market for such currency to major banks in the
London interbank market plus (b) the Mandatory Cost.
“PA Exposure” means, at any time, the aggregate principal amount of all
Protective Advances outstanding at such time. The PA Exposure of any Lender at
any time shall be its Applicable Percentage of the total PA Exposure at such
time.
“Parallel Debt” has the meaning assigned to such term in Section 9.21.
“Participant” has the meaning assigned to such term in Section 9.04.
“Participant Register” has the meaning set forth in Section 9.04(g)(i).
“Participating Member State” means each State so described in any EMU
Legislation, and includes, without limitation, each member State of the European
Community that adopts or has adopted the Euro as its lawful currency in
accordance with EMU Legislation.
“Patriot Act” has the meaning set forth in Section 9.14.
“Paying Guarantor” has the meaning assigned to such term in Section 10.11.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
“Pennsylvania Property” means that certain real property located at One Liz Way,
Mount Pocono, Pennsylvania.
“Pension Plan” means any employee pension benefit plan (as defined in
Section 3(2) of ERISA) in respect of which any Loan Party or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA, and any Foreign
Pension Plan.
“Permitted Acquisition” means any acquisition by the Company or any other Group
Member, whether by purchase, merger, amalgamation or otherwise, of all or
substantially all of the assets of, all of the Equity Interests of, or a
business line or unit or a division of, any Person; provided that:
(a) such acquisition shall be consensual;
(b) such acquisition shall be consummated in accordance with all Requirements of
Law, except where the failure to so comply would not reasonably be expected to
have a Material Adverse Effect;
(c) in the case of the acquisition of Equity Interests, (i) all of the Equity
Interests (except for any such securities in the nature of directors’ qualifying
shares) acquired or otherwise issued by such Person or any newly formed
Subsidiary of any Borrower in connection with such acquisition shall be directly
and beneficially owned

 

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100% by the Company or any other Group Member and (ii) such newly acquired
Subsidiary shall be a Loan Party and the Company and its Subsidiaries shall have
complied with Section 5.14 with respect thereto; and
(d) in the case of any acquisition in excess of $35,000,000 (whether paid in
cash, securities, the assumption of debt (including to the extent that any
continuing debt would be newly reflected on a consolidated balance sheet of the
Company) or otherwise), the Company shall furnish to the Administrative Agent at
least five Business Days prior to such proposed acquisition a certificate from a
Financial Officer of the Borrower Representative evidencing compliance with
Section 6.04(n), together with such detailed information relating thereto as the
Administrative Agent may reasonably request to demonstrate such compliance; and
provided further that it is understood that to the extent the assets acquired
are to be included in any Borrowing Base, due diligence (including, without
limitation, field exams and appraisals) in respect of such acquired assets
satisfactory to the Administrative Agent, in its Permitted Discretion, shall
have been completed.
“Permitted Company Deferral Plan” means the Liz Claiborne, Inc. Outside
Directors’ Deferral Plan, as in effect on the date hereof.
“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
“Permitted Encumbrances” means:
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.04, but excluding, for
greater certainty, any landlord hypothecs registered in the province of Quebec;
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;
(d) Liens granted and deposits made to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business;
(e) judgment liens in respect of judgments that do not constitute an Event of
Default under paragraph (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and other encumbrances on real
property (whether owned or leased) or any interest therein, imposed by law or
arising

 

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or granted in the ordinary course of business, that do not secure any monetary
obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of any Loan Party or
any of its Subsidiaries;
(g) solely with respect to any Mortgaged Property, matters shown on Schedule B –
Section II of the title insurance policy delivered with respect thereto; and
(h) Liens in favor of a credit card processor arising in the ordinary course of
business under any processor agreement;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
“Permitted European Member State” means any member state of the European Union
that was a member state prior to May 2004.
“Permitted Fee Receiver” means any US Fee Receiver that, with respect to any
fees paid under Section 2.12 (other than commitment fees), delivers to the
Company and the Administrative Agent, on or prior to the date on which such
Person becomes a party hereto (and from time to time thereafter upon the request
of the Company and the Administrative Agent, unless such Lender or Issuing Bank
becomes legally unable to do so solely as a result of a Change in Law after
becoming a party hereto), accurate and duly completed copies (in such number as
requested) of one or more of Internal Revenue Service Forms W-9, W-8ECI, W-8EXP,
W-8BEN or W-8IMY (together with, if applicable, one of the aforementioned forms
duly completed from each direct or indirect beneficial owner of such Lender or
Issuing Bank) or any successor thereto that entitle such Lender or Issuing Bank
to a complete exemption from U.S. withholding tax on such payments (provided
that, in the case of an Internal Revenue Service Form W-8BEN, a Lender or
Issuing Bank providing such form shall qualify as a Permitted Fee Receiver only
if such form establishes such exemption on the basis of the “business profits”
or “other income” articles of a tax treaty to which the United States is a party
and provides a U.S. taxpayer identification number), in each case together with
such supplementary documentation as may be prescribed by applicable law to
permit the Company or the Administrative Agent to determine whether such Lender
or Issuing Bank is entitled to such complete exemption.
“Permitted Investments” means:
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, a Governmental Authority of the United
States, Canada (with respect to investments made by any Canadian Group Member),
the Netherlands (with respect to investments made by any Netherlands Group
Member), Germany (with respect to investments made by any German Group Member)
or England and Wales (with respect to investments made by any UK Group Member),
(or by any agency thereof, as applicable, to the extent such obligations are
backed by the full faith and credit of such government), in each case maturing
within one year from the date of acquisition thereof;

 

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(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;
(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States, Canada (with respect to investments made by any Canadian
Group Member), the Netherlands (with respect to investments made by any
Netherlands Group Member), Germany (with respect to investments made by any
German Group Member), England and Wales (with respect to investments made by any
UK Group Member) or any State or Province or other political subdivision
thereof, as applicable, in each case, which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above; and
(e) money market funds that (i) (x) comply with the criteria set forth in the
U.S. Securities and Exchange Commission Rule 2a-7 under the Investment Company
Act of 1940 or (y) are money market mutual funds (as defined in National
Instrument 81-102 Mutual Funds) that are reporting issuers (as defined as
Ontario securities law) in the Province of Ontario, (ii) are rated AAA by S&P or
Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.
“Permitted Lien” means Liens permitted by Section 6.02.
“Permitted Second Priority Lien” shall have the meaning assigned to such term in
Section 6.02(s).
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means any employee benefit plan (as defined in Section 3(3) of ERISA),
including any employee welfare benefit plan (as defined in Section 3(1) of
ERISA), any employee pension benefit plan (as defined in Section 3(2) of ERISA),
and any plan which is both an employee welfare benefit plan and an employee
pension benefit plan, and in respect of which any Loan Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“PP&E Component” means, at any time of determination of the US Borrowing Base,
the lesser of (x) $30,000,000 and (y) 50% of the fair market value of the
Eligible Real Property on the Effective Date (or, in the case of any real
property on which a Mortgage is granted to the US Collateral Agent after the
Effective Date, on the date such Mortgage is granted) (such amount to amortize
monthly on a straight-line basis to zero over five years commencing at the end
of the first full fiscal quarter following the Effective Date (or, in the case
of any real property on which a

 

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Mortgage is granted to the US Collateral Agent after the Effective Date, at the
end of the first full fiscal quarter following the date such Mortgage is
granted)).
“PPSA” means the Personal Property Security Act (Ontario), including the
regulations thereto; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any Lien created hereunder or under any other
Loan Document on the Collateral is governed by the personal property security
legislation or other applicable legislation with respect to personal property
security in effect in a jurisdiction other than Ontario, “PPSA” means the
Personal Property Security Act or such other applicable legislation in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority.
“Prepayment Event” means any termination or voluntary reduction of the
Commitments pursuant to Section 2.09(b) or (c).
“Prime Rate” means (a) for the purpose of dollar-denominated Loans made
available to the Company, the rate of interest per annum publicly announced from
time to time by JPMCB as its prime rate at its offices at 270 Park Avenue in New
York City or any successor executive office, and (b) for the purpose of
dollar-denominated Loans made available to the Canadian Borrower, the rate of
interest per annum publicly announced from time to time by the Canadian
Administrative Agent as its prime rate for dollar-denominated commercial loans
made in Canada; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
“Prior Claims” means all Liens created by applicable Canadian law (in contrast
with Liens voluntarily granted) which rank or are capable of ranking prior to or
pari passu with the Liens created by the Collateral Documents (or interests
similar thereto under applicable law) including for amounts owing for employee
source deductions, vacation pay, goods and services taxes, sales taxes,
harmonized sales taxes, municipal taxes, workers’ compensation, Quebec corporate
taxes, pension fund obligations and overdue rents.
“Pro Forma Basis” means, with respect to any test hereunder in connection with
any event, that such test shall be calculated after giving effect on a pro forma
basis for the period of such calculation to (i) such event as if it happened on
the first day of such period or (ii) the incurrence of any Indebtedness by the
Company or any Subsidiary and any incurrence, repayment, issuance or redemption
of other Indebtedness of the Company or any Subsidiary occurring at any time
subsequent to the last day of the Test Period and on or prior to the date of
determination, as if such incurrence, repayment, issuance or redemption, as the
case may be, occurred on the first day of the Test Period (it being understood
that, in connection with any such pro forma calculation prior to the delivery of
financial statements for the first fiscal month ended after the Effective Date,
such calculation shall be made in a manner satisfactory to the Administrative
Agent in its Permitted Discretion).
“Projections” has the meaning assigned to such term in Section 5.01(f).
“Protective Advances” has the meaning assigned to such term in Section 2.04.
“Put Event” means a “Put Event” as defined in Schedule 2 to the Agency
Agreement.

 

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“Quebec Security Documents” means a deed of hypothec executed by any Loan Party
from time to time and any other related documents, bonds, debentures or pledge
agreements required to perfect a Lien in favor of the applicable Collateral
Agent in the province of Quebec.
“Quotation Day” means, in respect of the determination of the LIBO Rate for any
period for Loans (a) in Sterling, the day which is the Business Day that is the
first day of such Interest Period, (b) in Euro, the day that is two Target Days
prior the first day of such Interest Period and (c) in dollars, Canadian Dollars
or Yen, the day that is two Business Days prior to the first day of such
Interest Period.
“Register” has the meaning assigned to such term in Section 9.04.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
“Relevant Loan Party” has the meaning assigned to such term in Section 9.21(a).
“Rent Reserve” means (a) with respect to any store, warehouse, cross-docking
facility, distribution center, regional distribution center, depot or other
location where any Inventory subject to Liens arising by operation of law is
located and with respect to which no Collateral Access Agreement is in effect, a
reserve equal to the greater of (i) two (or, in the case of any store,
warehouse, cross-docking facility, distribution center, regional distribution
center, depot or other location located in Canada, the Netherlands, England and
Wales or Germany, three) months’ rent or (ii) if such facility is located in the
Province of Quebec, the fixed amount of any prior-ranking hypothec registered in
favor of the applicable landlord, at such store, warehouse, cross-docking
facility, distribution center, regional distribution center, depot or other
location and (b) with respect to any Inventory subject to a “four wall”
concession arrangement, a reserve equal to the lesser of (x) the sum of
(i) three months’ rent of the concessionaire plus (ii) three months’ fees owing
from the applicable Loan Party to the concessionaire and (y) the value of such
Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value.
“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the assets of any Loan Party from information furnished by or on behalf of any
Loan Party, after the Administrative Agent has exercised its rights of
inspection pursuant to this Agreement, which Reports shall be distributed to the
Lenders by the Administrative Agent.
“Reported Acceptance Obligations” means Acceptance Obligations of any Loan Party
owing to one or more Lenders or their respective Affiliates; provided that, as
of any date of determination, such obligations shall constitute Reported
Acceptance Obligations solely to the extent that the Lender party thereto or its
Affiliate (other than JPMCB) shall have reported the amount of such outstanding
obligations to the Administrative Agent as of the last day of the previous
fiscal quarter on or prior to the date that is 15 days following the end of such
fiscal quarter (or (x) prior to the date that is 15 days following the end of
the first fiscal quarter following the Effective Date, within 15 days of the
Effective Date such Lender or Affiliate shall

 

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have reported the amount of such outstanding obligations as of the Effective
Date, and (y) within 10 days of any request therefor by the Administrative
Agent, such Lender or Affiliate shall have reported the amount of such
outstanding obligations as of any other date reasonably requested by the
Administrative Agent).
“Reported Banking Services Obligations” means Banking Services Obligations of
any Loan Party owing to one or more Lenders or their respective Affiliates;
provided that, as of any date of determination, such obligations shall
constitute Reported Banking Services Obligations solely to the extent that the
Lender party thereto or its Affiliate (other than JPMCB) shall have reported the
amount of such outstanding obligations to the Administrative Agent as of the
last day of the previous fiscal quarter on or prior to the date that is 15 days
following the end of such fiscal quarter (or (x) prior to the date that is
15 days following the end of the first fiscal quarter following the Effective
Date, within 15 days of the Effective Date such Lender or Affiliate shall have
reported the amount of such outstanding obligations as of the Effective Date,
and (y) within 10 days of any request therefor by the Administrative Agent, such
Lender or Affiliate shall have reported the amount of such outstanding
obligations as of any other date reasonably requested by the Administrative
Agent).
“Reported Secured Swap Obligations” means Secured Swap Obligations of any Loan
Party owing to one or more Lenders or their respective Affiliates; provided
that, as of any date of determination, such obligations shall constitute
Reported Secured Swap Obligations solely to the extent that as of any date of
determination, such Lender party thereto or its Affiliate (other than JPMCB)
shall have reported the amount of such outstanding Swap Obligations to the
Administrative Agent as of the last day of the previous fiscal quarter on or
prior to the date that is 15 days following the end of such fiscal quarter (or
(x) prior to the date that is 15 days following the end of the first fiscal
quarter following the Effective Date, within 15 days of the Effective Date such
Lender or Affiliate shall have reported the amount of such outstanding
obligations as of the Effective Date and (y) within 10 days of any request
therefor by the Administrative Agent, such Lender or Affiliate shall have
reported the amount of such outstanding Swap Obligations as of any other date
reasonably requested by the Administrative Agent).
“Reporting Date” has the meaning assigned to such term in Section 5.19.
“Required Facility B Lenders” means, at any time, Lenders having Credit Exposure
and unused Commitments with respect to Facility B representing more than 50% of
the sum of the total Credit Exposure and unused Commitments with respect to
Facility B at such time.
“Required Lenders” means, at any time, Lenders having Credit Exposure and unused
Commitments representing more than 50% of the sum of the total Credit Exposure
and unused Commitments at such time.
“Requirement of Law” means, as to any Person, the Certificate of Incorporation
(or Certificate of Amalgamation, as applicable) and By Laws or other
organizational, constating or governing documents of such Person (including,
without limitation, any Memorandum and any Articles), and any law, treaty, rule
or regulation or determination of an arbitrator or a court or

 

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other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
“Reserves” means, individually and collectively, and without duplication,
Customer Credit Liability Reserves, Rent Reserves, Licensed Inventory Reserves,
unpaid taxes and other government reserves, the Environmental Reserve, reserves
for accrued and unpaid interest on the Secured Obligations (other than interest
owing pursuant to the Synthetic Lease Documentation), Dilution Reserves and any
other reserves which the Administrative Agent deems necessary, in its Permitted
Discretion, to maintain (including, without limitation, Banking Services
Reserves, reserves for consignee’s, warehousemen’s and bailee’s charges (unless
a Collateral Access Agreement shall be in effect with respect to the subject
property), reserves for Swap Obligations, reserves for Acceptance Obligations,
reserves in connection with RSB Accounts, reserves for shipping and
transportation costs, reserves for excise taxes, reserves for processor fees,
the German Bankruptcy Reserve, reserves for contingent liabilities of any Loan
Party, reserves for uninsured losses of any Loan Party, reserves for uninsured,
underinsured, un-indemnified or under-indemnified liabilities or potential
liabilities with respect to any litigation and reserves for taxes, fees,
assessments, reserves for fees of collecting banks, reserves for the prescribed
part of a UK Loan Party’s net property that would be made available for the
satisfaction of its unsecured liabilities pursuant to §176A of the Insolvency
Act 1986, reserves with respect to liabilities of a UK Loan Party which
constitute preferential debts pursuant to §386 of the Insolvency Act 1986 and
other governmental charges and Prior Claims) with respect to the Collateral or
any Loan Party.
“Responsible Officer” means the chief executive officer, president, vice
president, secretary, assistant secretary or chief financial officer of any
Person, but in any event, with respect to financial matters, the chief financial
officer of such Person.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Company or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Company or any option, warrant or other right
to acquire any such Equity Interests in the Company.
“Retail Inventory” means Inventory located at, or in transit to, any retail
store.
“Revolving Exposure” means the sum of the Facility A Revolving Exposure plus the
Facility B Revolving Exposure.
“Revolving Exposure Limitations” has the meaning set forth in Section 2.01.
“Revolving Loan” means a Loan made pursuant to Section 2.01.
“Rhode Island Property” means the land, building and improvements located at One
Powder Hill Road, Lincoln, Rhode Island, together with all rights, easements and
appurtenances thereto, and all fixtures and equipment located thereon or used in
connection therewith which as of the Effective Date are subject to the Synthetic
Lease and/or the related capital leases, as applicable.

 

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“Royalty Account” means an Account of a Loan Party evidencing royalty payments
owed to such Loan Party in connection with the licensing of such Loan Party’s
trademarks.
“RSB” means RSB Retail+Service Bank GmbH, Kornwestheim, Germany.
“RSB Account” means an Account of the European Borrower evidencing payments owed
to the European Borrower from RSB pursuant to the Unitex Agreement.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.
“Schedule I Lender” means any Lender named on Schedule I to the Bank Act
(Canada).
“Schedule I Reference Banks” means Royal Bank of Canada and Bank of Montreal or
any bank named on Schedule I to the Bank Act (Canada) as otherwise agreed by the
Administrative Agent and the Borrower Representative.
“Schedule II/III Reference Banks” means JPMorgan Chase Bank, N.A., Toronto
Branch, or any two other banks named on Schedule II or Schedule III to the Bank
Act (Canada) as otherwise agreed by the Administrative Agent and the Borrower
Representative.
“Scheduled Bank Accounts” has the meaning assigned to such term in Section 5.19.
“Secured Obligations” means all Obligations, together with all Synthetic Lease
Obligations, Banking Services Obligations, Acceptance Obligations and Secured
Swap Obligations.
“Secured Swap Obligations” means Swap Obligations of any Loan Party owing to one
or more Lenders or their respective Affiliates; provided that at or prior to the
time that any transaction relating to such Swap Obligation is executed, the
Lender party thereto or its Affiliate (other than JPMCB) shall have delivered
written notice to the Administrative Agent that such a transaction has been
entered into and that it constitutes a Secured Swap Obligation entitled to the
benefits of the Collateral Documents.
“Security Agreement” means, individually and collectively, any US Security
Agreement, any Canadian Security Agreement, any Quebec Security Documents, any
European Security Agreement, any Netherlands Security Agreement, any German
Security Agreement and/or any UK Security Agreement.
“Settlement” has the meaning assigned to such term in Section 2.05(c).
“Settlement Date” has the meaning assigned to such term in Section 2.05(c).
“Settlement Request Date” has the meaning assigned to such term in
Section 2.05(c).
“Spanish Loan Party” means any Loan Party organized under the laws of Spain.

 

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“Spanish Security Agreements” means (a) the public deed formalizing (elevando a
publico) the agreement of release of a pledge over a collection account and
creation of a new pledge over a collection account, granted on January 13, 2009
before the Notary Public of Madrid, Mr. José Miguel Lombardía, by and among MEXX
EUROPE B.V as Pledgor and JP MORGAN EUROPE LIMITED as European Collateral Agent,
acting in its own name and behalf and in the name and for the benefit of the
Secured Parties (as defined therein) and (b) the public deed formalizing
(elevando a publico) the agreement of release of a pledge over bank accounts and
creation of a new pledge over bank accounts, granted on January 13, 2009 before
the Notary Public of Madrid, Mr. José Miguel Lombardía, by and among MEXX
SOUTHERN EUROPE, S.L as Pledgor and JP MORGAN EUROPE LIMITED as European
Collateral Agent, acting in its own name and behalf and in the name and for the
benefit of the Secured Parties (as defined therein).
“Specified Cash Collections” means cash collections of Affiliates of the
European Borrower representing proceeds from the sale by such Affiliate of
Inventory acquired, directly or indirectly, from the European Borrower, the
payment for which is currently accounted for as an intercompany receivable on
the books of the European Borrower.
“Specified Defaulting Lender” means any Lender that is a Defaulting Lender
pursuant to clauses (a), (b), (d) or (e) of the definition thereof set forth
herein.
“Specified European Loan Parties” means the European Loan Parties other than the
UK Loan Parties.
“Specified German Guarantor” has the meaning set forth in Section 10.10.
“Specified Loan Documents” means the US Reaffirmation Agreement, the Canadian
Reaffirmation Agreement, the Irish Debenture, the UK Security Agreements and
each other agreement set forth on Schedule 1.01(e).
“Spot Selling Rate” means, on any date, as determined by the Administrative
Agent, the spot selling rate posted by Reuters on its website for the sale of
the applicable currency for dollars at approximately 11:00 a.m., Local Time, two
Business Days prior to such date (the “Applicable Quotation Date”); provided
that if, for any reason, no such spot rate is being quoted, the spot selling
rate shall be determined by reference to such publicly available service for
displaying exchange rates as my be selected by the Administrative Agent, or, in
the event no such service is selected, such spot selling rate shall instead be
the rate determined by the Administrative Agent as the spot rate of exchange in
the market where its foreign currency exchange operations in respect of the
applicable currency are then being conducted, at or about 11.00 a.m. Local Time,
on the Applicable Quotation Date for the purchase of the relevant currency for
delivery two Business Days later.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to

 

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as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
“Sterling” and “£” refers to the lawful currency of the United Kingdom.
“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Administrative Agent.
“subsidiary” means (i) with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent and (ii) any subsidiary within
the meaning of §1159 of the UK Companies Act 2006 and any subsidiary undertaking
within the meaning of §1162 of the UK Companies Act 2006.
“Subsidiary” means any direct or indirect subsidiary of the Company or a Loan
Party, as applicable.
“Supermajority Lenders” means, at any time, Lenders having Credit Exposure and
unused Commitments representing at least 662/3% of the sum of the total Credit
Exposure and unused Commitments at such time.
“Swap Agreements” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrowers or the
Subsidiaries shall be a Swap Agreement.
“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under

 

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(a) any and all Swap Agreements, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Swap Agreement transaction.
“Swedish Kronor” refers to the lawful currency of Sweden.
“Swedish Loan Party” has the meaning assigned to such term in Section 10.01(m).
“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.
“Swingline Lender” means, individually and collectively, the US Swingline
Lender, the European Swingline Lender, the Canadian Swingline Lender and the UK
Swingline Lender, as the context may require.
“Swingline Loan” means, individually and collectively, each US Swingline Loan,
each European Swingline Loan, each Canadian Swingline Loan and each UK Swingline
Loan, as the context may require.
“Swiss Federal Withholding Tax” means the source withholding tax currently
imposed at a rate of 35% pursuant to the Federal Law of 13 October 1965
concerning the Withholding Tax (Bundesgesetz vom 13. Oktober 1965 über die
Verrechnungssteuer).
“Swiss Loan Party” has the meaning assigned to such term in Section 10.01(n)(i).
“Syndication Agent” means Bank of America, N.A., in its capacity as Syndication
Agent.
“Synthetic Lease Amendment” means the Seventh Amendment to Master Agreement,
dated the date hereof, among the Company, Liz Claiborne Accessories, Inc.
SunTrust Bank, as lessor, the lenders party thereto and SunTrust Equity Funding,
LLC, as agent.
“Synthetic Lease Documentation” means the 2006 Synthetic Lease and all other
“Operative Documents” (as such term is defined in Appendix A to the 2006
Synthetic Lease), in each case as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
“Synthetic Lease Obligations” means all “Obligations” (as defined in Appendix A
to the 2006 Synthetic Lease) and any other obligations of the Company or any of
its Subsidiaries outstanding pursuant to the Synthetic Lease Documentation.
“Synthetic Lease Reserves” means, at any time, the amount of the Synthetic Lease
Obligations outstanding at such time.
“TARGET Day” means any day on which (i) TARGET2 is open for settlement of
payments in Euro and (ii) banks are open for dealings in deposits in Euro in the
London interbank market.

 

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“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express
Transfer payment system which utilizes a single shared platform and which was
launched on November 19, 2007.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other similar charges imposed by
any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.
“Test Period” means the most recent period of twelve consecutive fiscal months
of the Company ended on or prior to such time (taken as one accounting period)
in respect of which financial statements for each month, quarter or fiscal year
in such period have been (or have been required to be) delivered pursuant to
Section 5.01(a), 5.01(b) or 5.01(c), as applicable.
“Total Assets” means, at any date, the amount that would, in conformity with
GAAP, be set forth opposite the caption “total assets” (or any like caption) on
a consolidated balance sheet of the Company and the Subsidiaries.
“Trademark” has the meaning set forth in the US Security Agreement.
“Trademark Disposition Date” has the meaning assigned to such term in
Section 6.05(l).
“Trademark Secured Debt” shall have the meaning assigned to such term in Section
6.02(p)
“Transactions” means the execution, delivery and performance by the Loan Parties
of this Agreement and the other Loan Documents, the borrowing by the Borrowers
of Loans and other credit extensions, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder and the guarantees and grants of
security interests provided herein and therein.
“Transfer Date” has the meaning assigned to such term in Section 5.18(b).
“2006 Synthetic Lease” means the Amended and Restated Master Lease Agreement,
dated as of November 21, 2006 (as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof), between SunTrust Bank,
as Lessor and the Company and Liz Claiborne Accessories, Inc. as Lessees.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate, the
Canadian Prime Rate or the Overnight LIBO Rate, or whether such Loan is a BA
Drawing.
“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
“UK Availability” means (a) the lesser of (x) the UK Sublimit and (y) the sum of
(i) the UK Borrowing Base plus (ii) solely to the extent the total Revolving
Exposure relating to the UK Borrower exceeds the UK Borrowing Base, the US
Availability (calculated without giving effect

 

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to any UK US Borrowing Base Utilization), minus (b) the total Revolving Exposure
relating to the UK Borrower.
“UK Bank Account Charge” means the bank account charge, dated as of the date
hereof, among Mexx Europe International, Mexx Holding International B.V. and the
European Collateral Agent, as the same may be amended, restated or otherwise
modified from time to time.
“UK Borrower” means Juicy Couture Europe Limited.
“UK Borrowing Base” means, at any time, with respect to the UK Loan Parties, the
sum of:
(a) 100% of the aggregate cash balances denominated in dollars, Euros, Sterling
or Yen in depositary accounts of the UK Loan Parties constituting investment
accounts that are held at JPMorgan Chase Bank, N.A. or any Affiliate thereof
approved by the Administrative Agent and subject to an Account Control Agreement
and upon which the European Collateral Agent has a first priority perfected Lien
for the benefit of the Agents, the applicable Lenders and the applicable Issuing
Banks, subject only to Liens permitted pursuant to Section 6.02(f), plus
(b) the product of (i) 85% multiplied by (ii) the UK Loan Parties’ Eligible
Accounts at such time, minus the Dilution Reserve related to the UK Loan
Parties, plus
(c) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the UK Loan Parties’ Eligible Retail
Inventory (other than Eligible LC Inventory), valued at the lower of cost
(determined on a first-in-first-out basis) or market value, at such time, plus
(d) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the UK Loan Parties’ Eligible Wholesale
Inventory (other than Eligible LC Inventory), valued at the lower of cost
(determined on a first-in-first-out basis) or market value, at such time, plus
(e) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the UK Loan Parties’ Eligible Retail LC
Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, plus
(f) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent Inventory appraisal ordered by the
Administrative Agent multiplied by the UK Loan Parties’ Eligible Wholesale LC
Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, minus

 

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(g) without duplication, applicable Reserves established by the Administrative
Agent in its Permitted Discretion.
The Administrative Agent may, in its Permitted Discretion, adjust Reserves
(subject to Section 9.02(b)) used in computing the Aggregate Borrowing Base and
the UK Borrowing Base, with any such changes to be effective two Business Days
after delivery of notice thereof to the Borrower Representative and the Lenders.
The UK Borrowing Base at any time shall be determined by reference to the most
recent UK Borrowing Base Certificate delivered to the Administrative Agent
pursuant to Section 5.01(g) of this Agreement.
“UK Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower Representative, in
substantially the form of Exhibit B-5.
“UK Debenture” means, individually and collectively, the Juicy Debenture and the
LCE Debenture.
“UK Group Member” means any Subsidiary of the Company (including the UK
Borrower) organized under the laws of England and Wales.
“UK Letter of Credit” means any Letter of Credit or similar instrument
(including a bank guarantee) acceptable to the applicable Issuing Bank issued
hereunder for the purpose of providing credit support for the UK Borrower.
“UK Loans” means, individually and collectively, the UK Revolving Loans, the UK
Swingline Loans and the UK Protective Advances.
“UK Loan Party” means any Loan Party (including the UK Borrower) organized under
the laws of England and Wales; provided that for purposes of the definition of
“UK Borrowing Base”, “UK Loan Parties” shall not include Liz Claiborne Europe.
“UK Protective Advance” has the meaning assigned to such term in Section 2.04.
“UK Revolving Loan” means a Revolving Loan made to the UK Borrower.
“UK Security Agreements” means the UK Debentures, the UK Shares Charge, the UK
Bank Account Charge and any Collateral Document governed by English Law.
“UK Shares Charge” means the shares charge, dated as of the date hereof, between
the Company and the European Collateral Agent, as the same may be amended,
restated or otherwise modified from time to time.
“UK Sublimit” means $20,000,000, as such sublimit may be reduced or terminated
in accordance with Section 2.09.
“UK Swingline Lender” means J.P. Morgan Europe Limited, in its capacity as
lender of UK Swingline Loans hereunder, and its successors and assigns in such
capacity.

 

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“UK Swingline Loan” has the meaning assigned to such term in
Section 2.05(a)(iv).
“UK US Borrowing Base Utilization” means the excess of (i) the total Revolving
Exposure relating to the UK Borrower minus (ii) the UK Borrowing Base.
“United States” and “US” means the United States of America.
“Unitex Agreement” means the central settlement agreement to be entered into
between unitex GmbH, RSB and the European Borrower, in form and substance
reasonably acceptable to the Administrative Agent, as the same may be amended or
modified from time to time in a manner not adverse to the Lenders.
“Unitex Transaction” means the entering into of the Unitex Agreement by the
parties thereto.
“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.
“Upstream- or Cross-stream Obligations” has the meaning assigned to such term in
Section 10.01(n)(i).
“US Availability” means an amount equal to (i) the US Borrowing Base minus
(ii) the total Revolving Exposure relating to the Company minus (iii) the
Canadian US Borrowing Base Utilization minus (iv) the European US Borrowing Base
Utilization minus (v) the UK US Borrowing Base Utilization; but in no event
greater than the total Commitments minus the total Revolving Exposure.
“US Borrowing Base” means, at any time, with respect to the US Loan Parties, the
sum of:
(a) 100% of the aggregate cash balances denominated in dollars in depositary
accounts of the US Loan Parties constituting investment accounts that are held
at JPMorgan Chase Bank, N.A. or any Affiliate thereof approved by the
Administrative Agent and subject to an Account Control Agreement and upon which
the US Collateral Agent has a first priority perfected Lien for the benefit of
the Agents, the Lenders and the Issuing Banks, subject only to Liens permitted
pursuant to Section 6.02(f), plus
(b) the sum of (i) the product of (A) 85% multiplied by (B) the US Loan Parties’
Eligible Accounts at such time, minus the Dilution Reserve related to the US
Loan Parties and (ii) the product of (A) 90% multiplied by (B) the US Loan
Parties’ Eligible Credit Card Account Receivables at such time, plus
(c) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory

 

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identified in the most recent inventory appraisal ordered by the Administrative
Agent multiplied by the US Loan Parties’ Eligible Retail Inventory (other than
Eligible LC Inventory), valued at the lower of cost (determined on a
first-in-first-out basis) or market value, at such time, plus
(d) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent inventory appraisal ordered by the
Administrative Agent multiplied by the US Loan Parties’ Eligible Wholesale
Inventory (other than Eligible LC Inventory), valued at the lower of cost
(determined on a first-in-first-out basis) or market value, at such time, plus
(e) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Retail
Inventory identified in the most recent inventory appraisal ordered by the
Administrative Agent multiplied by the US Loan Parties’ Eligible Retail LC
Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, plus
(f) the product of 85% multiplied by the High Season or Low Season, as
applicable, Net Orderly Liquidation Value percentage in respect of Wholesale
Inventory identified in the most recent inventory appraisal ordered by the
Administrative Agent multiplied by the US Loan Parties’ Eligible Wholesale LC
Inventory, valued at the lower of cost (determined on a first-in-first-out
basis) or market value, at such time, plus
(g) the PP&E Component, plus
(h) prior to the Trademark Disposition Date, the Eligible Trademark Amount,
minus
(i) the Synthetic Lease Reserves, minus
(j) without duplication, applicable Reserves established by the Administrative
Agent in its Permitted Discretion.
The Administrative Agent may, in its Permitted Discretion, adjust Reserves
(subject to Section 9.02(b)) used in computing the Aggregate Borrowing Base and
the US Borrowing Base, with any such changes to be effective two Business Days
after delivery of notice thereof to the Borrower Representative and the Lenders.
The US Borrowing Base at any time shall be determined by reference to the most
recent US Borrowing Base Certificate delivered to the Administrative Agent
pursuant to Section 5.01(g) of this Agreement.
“US Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower Representative, in
substantially the form of Exhibit B-2.
“US Collateral” means the “Collateral” as defined in the US Security Agreement.

 

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“US Collateral Agent” means JPMCB, in its capacity as collateral agent and
security trustee for itself, the Administrative Agent, the Issuing Banks and the
Lenders, and its successors in such capacity.
“US Fee Receiver” means any Person that receives, or through a participating
interest participates in, any payments of fees from a US Person under
Section 2.12 (other than commitment fees).
“US Letter of Credit” means any letter of credit or similar instrument
(including a bank guarantee) acceptable to the applicable Issuing Bank issued in
dollars for the purpose of providing credit support for the Company.
“US Loan Party” means, individually and collectively, any Loan Party (including
the Company) organized under the laws of the United States.
“US Pledged Note” means any “Pledged Note”, as defined in the US Security
Agreement.
“US Pledged Stock” means any “Pledged Stock”, as defined in the US Security
Agreement
“US Protective Advance” means a Protective Advance made to or for the account of
the Company.
“US Reaffirmation Agreement” means the Reaffirmation Agreement and First
Amendment, dated as of the date hereof, among the Company, the other US Loan
Parties, and the Administrative Agent.
“US Revolving Loan” means a Revolving Loan made to the Company.
“US Security Agreement” means that certain US Pledge and Security Agreement,
dated as of January 12, 2009, between the US Loan Parties party thereto and the
US Collateral Agent (for the benefit of the Agents, the Lenders and the Issuing
Banks), the US Reaffirmation Agreement and any other pledge or security
agreement entered into, after the date of this Agreement, by any US Loan Party
(as required by this Agreement or any other Loan Document for the purpose of
creating a Lien on the property of any Loan Party organized in the US (or any
other property located therein)), or any other Person, as the same may be
amended, restated or otherwise modified from time to time.
“US Swingline Lender” means JPMCB, in its capacity as lender of US Swingline
Loans hereunder, and its successors and assigns in such capacity.
“US Swingline Loan” has the meaning assigned to such term in
Section 2.05(a)(iv).
“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(g)(iii).

 

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“Utilized Excess US Availability” means (a) the total Facility B Revolving
Exposure relating to the Canadian Borrower, the UK Borrower and the European
Borrower minus (b) the sum of (i) the lesser of (x) the Canadian Borrowing Base
and (y) the total Facility B Revolving Exposure relating to the Canadian
Borrower, (ii) the lesser of (x) the European Borrowing Base and (y) the total
Facility B Revolving Exposure relating to the European Borrower and (iii) the
lesser of (x) the UK Borrowing Base and (y) the total Facility B Revolving
Exposure relating to the UK Borrower; provided that if (b) is greater than (a),
the “Utilized Excess US Availability” shall be deemed to be zero.
“VAT” means any tax imposed by EC Directive 2006/112/EC on the Common System of
value added tax and any national legislation implementing that directive,
together with any legislation supplemental thereto, and any other tax of a
similar nature and all penalties, cost and interest related thereto.
“Vendor Rebates” means, with respect to any Loan Party, credits earned from
vendors for volume purchases that reduce net inventory costs for such Loan
Party.
“Wholesale Inventory” means Inventory located at, or in transit to, any
warehouse.
“wholly owned” means, with respect to a Subsidiary of any Person, a Subsidiary
of such Person, all of the outstanding Equity Interests of which (other than
(x) director’s qualifying shares and (y) shares issued to foreign nationals to
the extent required by applicable law) are owned by such Person and/or by one or
more wholly owned Subsidiaries of such Person.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” has the meaning assigned to such term in Section 2.17(a).
“Working Capital” means, at any date, the excess of current assets of the
Company and its Subsidiaries on such date over current liabilities of the
Company and its Subsidiaries on such date, all determined on a consolidated
basis in accordance with GAAP.
“Yen” and “¥” refer to the lawful currency of Japan.
SECTION 1.02 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Facility, (e.g., a
“Facility A Loan”), Class (e.g., a “Revolving Loan”) or by Type (e.g., a
“Eurocurrency Loan”), by Facility and Class (e.g., a “Facility A Revolving
Loan”) or by Class and Type (e.g., a “Eurocurrency Revolving Loan”). Borrowings
also may be classified and referred to by Class (e.g., a “Borrowing of Revolving
Loans”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type
(e.g., a “Eurocurrency Borrowing of Revolving Loans”).
SECTION 1.03 Terms Generally. (a) The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without

 

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limitation”. 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 herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements 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 hereof, (iv) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (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
contract rights.
(b) In this Agreement, where it relates to a Netherlands Loan Party, a reference
to:
(i) a necessary action to authorize, where applicable, includes without
limitation:
(A) any action required to comply with the Works Councils Act of the Netherlands
(Wet op de ondernemingsraden); and
(B) obtaining an unconditional positive advice (advies) from the competent works
council(s);
(C) gross negligence includes grove schuld;
(D) negligence includes schuld;
(ii) a security interest includes any mortgage (hypotheek), pledge (pandrecht),
retention of title arrangement (eigendomsvoorbehoud), privilege (voorrecht),
right of retention (recht van retentie), right to reclaim goods (recht van
reclame), and, in general, any right in rem (beperkte recht), created for the
purpose of granting security (goederenrechtelijk zekerheidsrecht);
(iii) willful misconduct includes opzet;
(iv) a winding-up, administration or dissolution (and any of those terms)
includes a Netherlands entity being declared bankrupt (failliet verklaard) or
dissolved (ontbonden);
(v) a moratorium includes surséance van betaling and granted a moratorium
includes surséance verleend;
(vi) any step or procedure taken in connection with insolvency proceedings
includes a Netherlands entity having filed a notice under section 36 of the
Dutch Tax Collection Act (Invorderingswet 1990);

 

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(vii) an administrative receiver includes a curator;
(viii) an administrator includes a bewindvoerder; and
(ix) an attachment includes a beslag.
(c) In this Agreement, where it relates to a German Loan Party, a reference to:
(i) a necessary action to authorize, where applicable, includes without
limitation, obtaining an unconditional positive advice from the competent works
council(s);
(ii) gross negligence includes grobe Fahrlässigkeit;
(iii) negligence includes Fahrlässigkeit;
(iv) a security interest includes any mortgage (Grundschuld, Hypothek), pledge
(Pfandrecht), retention of title arrangement (Eigentumsvorbehalt), right of
retention (Zurückbehaltungsrecht), right to reclaim goods (Herausgabeansprüche),
and, in general, any right in rem created for the purpose of granting security;
(v) a winding-up, administration or dissolution (and any of those terms)
includes a German entity being declared bankrupt (insolvent) or dissolved
(ausfgelöst);
(vi) any step or procedure taken in connection with insolvency proceedings
includes a German entity having applied for bankruptcy (Insolvenzantrag) or the
opening of bankruptcy proceedings (Insolvenzeröffnung); and
(vii) an administrator includes an Insolvenzverwalter or Sachverständiger.
SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower Representative notifies the Administrative Agent that the Borrowers
request an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower Representative that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. In the event that historical accounting practices, systems or reserves
relating to the components of the Aggregate Borrowing Base or the Borrowing Base
of any Borrower are modified in a manner that is adverse to the Lenders in any
material respect, the Borrowers will agree to maintain such additional

 

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reserves (for purposes of computing the Aggregate Borrowing Base and the
Borrowing Base of each Borrower) in respect to the components of the Aggregate
Borrowing Base and the Borrowing Base of each Borrower and make such other
adjustments (which may include maintaining additional reserves, modifying the
advance rates or modifying the eligibility criteria for the components of the
Aggregate Borrowing Base and the Borrowing Base of each Borrower).
SECTION 1.05 Currency Translations. (a) For purposes of this Agreement and the
other Loan Documents, where the permissibility of a transaction or
determinations of required actions or circumstances depend upon compliance with,
or are determined by reference to, amounts stated in dollars, such amounts shall
be deemed to refer to dollars or Dollar Equivalents and any requisite currency
translation shall be based on the Spot Selling Rate and the permissibility of
actions taken under Article VI shall not be affected by subsequent fluctuations
in exchange rates (provided that if Indebtedness is incurred to refinance,
replace or renew other Indebtedness, and such refinancing or renewal would cause
the applicable dollar denominated limitation to be exceeded if calculated at the
Spot Selling Rate, such dollar denominated restriction shall be deemed not to
have been exceeded so long as (i) such refinancing, replacement or renewal
Indebtedness is denominated in the same currency as such Indebtedness being
refinanced, replaced or renewed and (ii) the principal amount of such
refinancing or renewal Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced or renewed except as permitted under
Section 6.01).
(b) For purposes of all calculations and determinations under this Agreement,
any amount in any currency other than dollars shall be deemed to refer to
dollars or Dollar Equivalents and any requisite currency translation shall be
based on the Spot Selling Rate, and all certificates delivered under this
Agreement, shall express such calculations or determinations in dollars or
Dollar Equivalents.
(c) The Administrative Agent shall determine the Dollar Equivalent of (x) the
Credit Exposure based on the Spot Selling Rate (i) as of the end of each fiscal
quarter of the Company, (ii) on or about the date of the related notice
requesting any extension of credit hereunder and (iii) on any other date, in its
reasonable discretion and (y) any other amount to be converted into Dollars in
accordance with the provisions hereof at the time of such conversion.
ARTICLE II
The Credits
SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein,
(a) each Facility A Lender agrees to make Revolving Loans (the “Facility A
Revolving Loans”) from time to time during the Availability Period to the
Company in dollars and (b) each Facility B Lender agrees to make Revolving Loans
(including, with respect to the Canadian Borrower, by way of BA Drawings in
accordance with Section 2.21) (the “Facility B Revolving Loans”) from time to
time during the Availability Period to (w) the Company in dollars, Canadian
dollars, Euros, Sterling and Yen, (x) the Canadian Borrower in dollars and
Canadian dollars, (y) the European Borrower in dollars, Euros and Sterling and
(z) the UK Borrower in dollars, Euros and Sterling, if, in each case after
giving effect thereto:

 

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(i) the Facility A Credit Exposure or Facility B Credit Exposure of any Lender
would not exceed such Lender’s Facility A Commitment or Facility B Commitment,
as the case may be;
(ii) the total Facility A Credit Exposure would not exceed the aggregate amount
of the Facility A Commitments;
(iii) the total Facility B Credit Exposure would not exceed the aggregate amount
of the Facility B Commitments;
(iv) Canadian Availability shall not be less than zero;
(v) European Availability shall not be less than zero;
(vi) US Availability shall not be less than zero;
(vii) UK Availability shall not be less than zero;
(viii) the total Facility B Revolving Exposure relating to the European Borrower
would not exceed the European Sublimit;
(ix) the total Facility B Revolving Exposure relating to the Canadian Borrower
would not exceed the Canadian Sublimit;
(x) the total Facility B Revolving Exposure relating to the UK Borrower would
not exceed the UK Sublimit; and
(xi) the total Revolving Exposure relating to the Company denominated in
Canadian dollars, Euros, Sterling and Yen shall not exceed the Dollar Equivalent
of $50,000,000.
subject, in the case of each of clauses (iv), (v), (vi) and (vii) above, to the
Administrative Agent’s, European Administrative Agent’s or Canadian
Administrative Agent’s authority, as applicable, in their sole discretion, to
make Protective Advances pursuant to the terms of Section 2.04 (the limitations
in the foregoing clauses (i) through (xi), the “Revolving Exposure
Limitations”). Within the foregoing limits and subject to the terms and
conditions set forth herein, each Borrower may borrow, prepay and reborrow its
Revolving Loans. For the avoidance of doubt, so long as the Revolving Exposure
Limitations shall have been met, subject to the terms and conditions set forth
herein, the entire amount of the Commitments under each of Facility A and
Facility B shall be available to the Company in dollars.
SECTION 2.02 Loans and Borrowings. (a) Each Loan (other than a Swingline Loan)
shall be made as part of a Borrowing consisting of Loans of the same Facility,
Class and Type made by the Lenders ratably in accordance with their respective
Commitments of the applicable Facility and Class. Each Protective Advance and
Swingline Loan shall be made in accordance with the procedures set forth in
Sections 2.04 and 2.05, respectively.

 

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(b) Subject to Section 2.14 and Section 2.21, (i) each Borrowing of Facility A
Revolving Loans shall be comprised entirely of ABR Loans or Eurocurrency Loans
as the Company may request in accordance herewith, (ii) each Facility B
Borrowing of US Revolving Loans shall be comprised entirely of Eurocurrency
Loans, (iii) each Borrowing of Canadian Revolving Loans denominated in Canadian
Dollars shall be comprised entirely of Canadian Prime Rate Loans or, pursuant to
Section 2.21, BA Drawings, (iv) each Borrowing of Canadian Revolving Loans in
dollars shall be comprised entirely of ABR Loans or Eurocurrency Loans as the
Canadian Borrower may request in accordance herewith, (v) each Borrowing of
European Revolving Loans shall be comprised entirely of Eurocurrency Loans and
(vi) each Borrowing of UK Revolving Loans shall be comprised entirely of
Eurocurrency Loans. Each Facility A Swingline Loan and each Canadian Swingline
Loan denominated in dollars shall be an ABR Loan, each Canadian Swingline Loan
denominated in Canadian Dollars shall be a Canadian Prime Rate Loan, and each
Facility B Swingline Loan other than a Canadian Swingline Loan shall be an
Overnight LIBO Loan. Each Lender may make any Eurocurrency Loan to any Borrower
by causing, at its option, any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Lenders to make Loans in accordance with the terms
hereof or Borrowers to repay any such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any Eurocurrency Borrowing
of Revolving Loans, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 (or in the case of any currency other than
dollars, an approximate equivalent thereof as determined by the Administrative
Agent, European Administrative Agent or Canadian Administrative Agent, as
applicable) and not less than $5,000,000 (or in the case of any currency other
than dollars, an approximate equivalent thereof as determined by the
Administrative Agent, European Administrative Agent or Canadian Administrative
Agent, as applicable). ABR Borrowings of Revolving Loans and Canadian Prime Rate
Borrowings of Revolving Loans may be in any amount. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of (i) 8 Eurocurrency Borrowings
outstanding under Facility A, (ii) 6 Eurocurrency Borrowings of the European
Borrower, (iii) 3 Eurocurrency Borrowings of the Canadian Borrower, (iv) 3
Eurocurrency Borrowings of the UK Borrower or (v) 6 Eurocurrency Borrowings of
the Company that are Facility B Borrowings.
(d) At the commencement of each Contract Period for any BA Drawing of Revolving
Loans, such Borrowing shall be in an aggregate face amount that is an integral
multiple of C$1,000,000 and not less than C$5,000,000; provided that there shall
not at any time be more than a total of 5 BA Drawings outstanding.
(e) Notwithstanding any other provision of this Agreement, neither the Borrower
Representative nor any Borrower shall be entitled to request, or to elect to
convert or continue, any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.

 

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(f) Each Facility A Loan shall be made in dollars, each Facility B Loan to the
Company shall be made in dollars, Euros, Canadian Dollars, Sterling or Yen, each
Facility B Loan to the Canadian Borrower shall be made in dollars or Canadian
Dollars and each Facility B Loan to the European Borrower or the UK Borrower
shall be made in dollars, Euros or Sterling.
SECTION 2.03 Requests for Borrowing of Revolving Loans. Subject to Section 2.21,
to request a Borrowing of Revolving Loans, the Borrower Representative (or the
applicable Borrower) shall notify (i) the Administrative Agent, in the case of a
requested Borrowing of Facility A Revolving Loans, (ii) the European
Administrative Agent, in the case of any request for Facility B Revolving Loans
other than Canadian Revolving Loans and (iii) the Canadian Administrative Agent,
in the case of any request for Canadian Revolving Loans, in each case either in
writing with, in the case of clauses (ii) and (iii) above, a copy to the
Administrative Agent (delivered, in the case of any notice to the European
Administrative Agent, by facsimile or, in the case of any notice to the
Administrative Agent or the Canadian Administrative Agent, by hand delivery,
facsimile or .pdf transmission) in a form approved by the Administrative Agent,
the European Administrative Agent and/or the Canadian Administrative Agent, as
applicable, and signed by the Borrower Representative (or the applicable
Borrower) or by telephone as follows:
(a) in the case of an ABR Borrowing by the Company, not later than 12:00 p.m.,
Local Time (or in case of any such Borrowing, the proceeds of which are to be
applied to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e), not later than 9:00 a.m., Local Time) on the date of the
proposed Borrowing,
(b) in the case of a Eurocurrency Borrowing, not later than 11:00 a.m., Local
Time, three Business Days before the date of the proposed Borrowing,
(c) in the case of a BA Drawing, 12:00 p.m., Local Time, three Business Days
before the date of the proposed Borrowing, and
(d) in the case of a Canadian Prime Rate Borrowing or an ABR Borrowing by the
Canadian Borrower, not later than 12:00 p.m., Local Time two Business Days
before the date of the proposed Borrowing;
Each telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by facsimile (in the case of any request delivered to the European
Administrative Agent) or by hand delivery, facsimile or .pdf transmission (in
the case of any request delivered to the Administrative Agent or the Canadian
Administrative Agent), with a copy (in the case of any request delivered to the
European Administrative Agent or Canadian Administrative Agent) delivered to the
Administrative Agent, of a written Borrowing Request in a form approved by the
Administrative Agent, the European Administrative Agent and/or the Canadian
Administrative Agent, as applicable, and signed by the Borrower Representative
(or the Borrower making such request). Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.01:
(i) the name of the applicable Borrower;

 

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(ii) the aggregate amount of the requested Borrowing and a breakdown of the
separate wires comprising such Borrowing;
(iii) the Facility under which such Borrowing shall be made;
(iv) the date of such Borrowing, which shall be a Business Day;
(v) in the case of a Borrowing requested on behalf of a Facility B Borrower, the
currency of the requested Borrowing;
(vi) whether such Borrowing is to be an ABR Borrowing, a Canadian Prime Rate
Borrowing, a BA Drawing or a Eurocurrency Borrowing; and
(vii) in the case of a Eurocurrency Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period” and in the case of a BA Drawing, the initial Contract
Period to be applicable thereto, which shall be a period contemplated by the
definition of the term “Contract Period”.
If no election as to the Type of Borrowing of Revolving Loans is specified, then
(A) a Borrowing of Facility A Revolving Loans or Canadian Revolving Loans
requested in dollars shall be an ABR Borrowing, (B) a Borrowing of Canadian
Revolving Loans requested in Canadian Dollars shall be a Canadian Prime Rate
Borrowing and (C) a Borrowing of Facility B Revolving Loans other than Canadian
Revolving Loans shall be a Eurocurrency Borrowing with an Interest Period of one
month. If no Interest Period is specified with respect to any requested
Eurocurrency Borrowing of Revolving Loans, then the applicable Borrower shall be
deemed to have selected an Interest Period of one month’s duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable, shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
SECTION 2.04 Protective Advances. (a) Subject to the limitations set forth
below, the Administrative Agent, the European Administrative Agent or the
Canadian Administrative Agent, as applicable, is authorized by the Borrowers and
the Lenders, from time to time in the Administrative Agent’s, the European
Administrative Agent’s or the Canadian Administrative Agent’s, as the case may
be, sole discretion (but, in each case, shall have absolutely no obligation to),
to make (i) in the case of the Administrative Agent, Loans to the Company in
dollars on behalf of the Facility A Lenders (each such Loan, a “Facility A
Protective Advance”), (ii) in the case of the European Administrative Agent,
Loans to the Company in dollars, Euros, Sterling, Yen or Canadian dollars on
behalf of the Facility B Lenders (each such Loan, a “Facility B US Protective
Advance”), (iii) in the case of the European Administrative Agent, Loans to the
European Borrower in dollars, Sterling or Euros on behalf of the Facility B
Lenders (each such Loan, a “European Protective Advance”), (iv) in the case of
the Canadian Administrative Agent, Loans to the Canadian Borrower in Canadian
Dollars or dollars on behalf of the Facility B Lenders (each such Loan, a
“Canadian Protective Advance”), and/or (v) in the case of the European
Administrative Agent, Loans to the UK Borrower in dollars, Euros or Sterling on
behalf of the Facility B Lenders (each such Loan, a “UK Protective Advance”),

 

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which the Administrative Agent, European Administrative Agent or Canadian
Administrative Agent, as applicable, in its Permitted Discretion, deems
necessary or desirable (i) to preserve or protect the Collateral, or any portion
thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment
of the Loans and other Obligations or (iii) to pay any other amount chargeable
to or required to be paid by the applicable Borrower pursuant to the terms of
this Agreement, including payments of reimbursable expenses (including costs,
fees, and expenses as described in Section 9.03) and other sums payable under
the Loan Documents (any of such Loans are herein referred to as “Protective
Advances”); provided that no Protective Advance may remain outstanding for more
than 45 days; provided further that the aggregate amount of (A) Facility A
Protective Advances outstanding at any time shall not (x) exceed $5,000,000 or
(y) when added to the total Facility A Revolving Exposure, exceed the aggregate
amount of the Facility A Commitments, (B) Canadian Protective Advances
outstanding at any time shall not (x) exceed $2,500,000, (y) when added to the
total Facility B Revolving Exposure relating to the Canadian Borrower, exceed
the Canadian Sublimit or (z) when added to the sum of the total Facility B
Revolving Exposure, the European Protective Advances, the UK Protective Advances
and the Facility B US Protective Advances, exceed the aggregate amount of the
Facility B Commitments, (C) European Protective Advances outstanding at any time
shall not (x) exceed $7,500,000, (y) when added to the total Facility B
Revolving Exposure relating to the European Borrower, exceed the European
Sublimit or (z) when added to the sum of the total Facility B Revolving
Exposure, the Canadian Protective Advances, the UK Protective Advances and the
Facility B US Protective Advances, exceed the aggregate amount of the Facility B
Commitments, (D) UK Protective Advances outstanding at any time shall not
(x) exceed $5,000,000, (y) when added to the total Facility B Revolving Exposure
relating to the UK Borrower, exceed the UK Sublimit or (z) when added to the sum
of the total Facility B Revolving Exposure, the Canadian Protective Advances,
the European Protective Advances and the Facility B US Protective Advances,
exceed the aggregate amount of the Facility B Commitments, and (E) Facility B US
Protective Advances outstanding at any time shall not (x) exceed $5,000,000 or
(y) when added to the sum of the total Facility B Revolving Exposure, the
European Protective Advances, the UK Protective Advances and the Canadian
Protective Advances, exceed the aggregate amount of the Facility B Commitments.
Protective Advances may be made even if the conditions precedent set forth in
Section 4.02 have not been satisfied. The Protective Advances shall be secured
by the Liens in favor of each applicable Collateral Agent (for the benefit of
the Agents, the applicable Lenders and the applicable Issuing Banks) in and to
the Collateral and shall constitute Obligations hereunder. All Facility A
Protective Advances and Canadian Protective Advances denominated in dollars
shall be ABR Borrowings, all Canadian Protective Advances denominated in
Canadian Dollars shall be Canadian Prime Rate Borrowings and all Facility B
Protective Advances denominated in dollars, Euros, Sterling or Yen and all US
Protective Advances denominated in Canadian Dollars shall be Overnight LIBO
Borrowings. The Administrative Agent’s, European Administrative Agent’s and/or
Canadian Administrative Agent’s, as the case may be, authorization to make
Protective Advances may be revoked at any time by the Required Lenders. Any such
revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s, European Administrative Agent’s or Canadian
Administrative Agent’s (as applicable) receipt thereof. At any time that there
is sufficient Aggregate Availability and the conditions precedent set forth in
Section 4.02 have been satisfied, the Administrative Agent, European
Administrative Agent, or Canadian Administrative Agent, as applicable, may
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Loan, in the currency in which the applicable Protective Advance was
denominated, to repay a Protective Advance. At any other time the Administrative
Agent, European Administrative Agent or Canadian Administrative Agent (as
applicable) may require the Lenders to fund, in the currency in which the
applicable Protective Advance was denominated, their risk participations
described in Section 2.04(b). It is agreed that the Administrative Agent, the
European Administrative Agent or the Canadian Administrative Agent, as
applicable, shall endeavor, but without any obligation, to notify the Borrower
Representative promptly after the making of any Protective Advance.
(b) Upon the making of a Protective Advance (whether before or after the
occurrence of a Default) by the Administrative Agent, the European
Administrative Agent or the Canadian Administrative Agent, as applicable, in
accordance with the terms hereof, each Facility A Lender or Facility B Lender,
as applicable, shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from the Administrative Agent,
the European Administrative Agent or the Canadian Administrative Agent, as
applicable, without recourse or warranty, an undivided interest and
participation in such Facility A Protective Advance or Facility B Protective
Advance, as applicable, in proportion to its Applicable Percentage. From and
after the date, if any, on which any Lender is required to fund (and has funded)
its participation in any Protective Advance purchased hereunder, the
Administrative Agent, the European Administrative Agent or the Canadian
Administrative Agent, as applicable, shall promptly distribute to such Lender,
such Lender’s Applicable Percentage of all payments of principal and interest
and all proceeds of Collateral received by the Administrative Agent, European
Administrative Agent or Canadian Administrative Agent, as applicable, in respect
of such Protective Advance.
SECTION 2.05 Swingline Loans. (a) The Swingline Loans.
(i) The Administrative Agent, the US Swingline Lender and the Facility A Lenders
agree that in order to facilitate the administration of this Agreement and the
other Loan Documents, promptly after the Borrower Representative delivers a
Borrowing Request to the Administrative Agent and the US Swingline Lender
requesting an ABR Borrowing under Facility A on behalf of the Company to be made
pursuant to this Section 2.05(a)(i), and provided that such ABR Borrowing
request is received by the Administrative Agent and the US Swingline Lender not
later than 11:00 a.m., New York time, the US Swingline Lender may elect to have
the terms of this Section 2.05(a)(i) apply to such Borrowing Request by
advancing, on behalf of the Facility A Lenders and in the amount so requested,
same day funds to the Company on the date such request is received to the
Funding Account(s) (each such Loan, a “Facility A Swingline Loan”), with
settlement among them as to the Facility A Swingline Loans to take place on a
periodic basis as set forth in Section 2.05(c). Each Facility A Swingline Loan
shall be subject to all the terms and conditions applicable to other ABR Loans
funded by the Facility A Lenders, except that all payments thereon shall be
payable to the US Swingline Lender solely for its own account. In addition, no
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(A) the Borrowers would not be in compliance with the Revolving Exposure
Limitations; or
(B) the aggregate principal amount of the outstanding Facility A Swingline Loans
would exceed the Facility A Swingline Sublimit.
(ii) The European Administrative Agent, the European Swingline Lender and the
Facility B Lenders agree that in order to facilitate the administration of this
Agreement and the other Loan Documents, promptly after the Borrower
Representative delivers a Borrowing Request to the European Administrative Agent
(with a copy to the Administrative Agent) requesting a Eurocurrency Borrowing
under Facility B on behalf of the Company to be made pursuant to this
Section 2.05(a)(ii), and provided that such Eurocurrency Borrowing request is
received by the European Administrative Agent not later than 10 a.m., London
time, the European Swingline Lender may elect to have the terms of this
Section 2.05(a)(ii) apply to such Borrowing Request by advancing, on behalf of
the Facility B Lenders and in the amount so requested, same day funds to the
Company on the date (A) such request is received, in the case of any such
Borrowing denominated in dollars, Canadian Dollars, Euros or Sterling or
(B) that is one Business Day after the date such request is received, in the
case of any such Borrowing denominated in Yen, to the Funding Account(s) (each
such Loan, a “Facility B US Swingline Loan”), with settlement among them as to
the Facility B US Swingline Loans to take place on a periodic basis as set forth
in Section 2.05(c). Each Facility B US Swingline Loan shall be subject to all
the terms and conditions applicable to other Revolving Loans funded by the
Facility B Lenders, except that (i) such Facility B US Swingline Loan shall
accrue interest at a rate determined by reference to the Overnight LIBO Rate and
(ii) all payments thereon shall be payable to the European Swingline Lender
solely for its own account. In addition, no Facility B US Swingline Loan shall
be made if, after giving effect thereto:
(A) the Borrowers would not be in compliance with the Revolving Exposure
Limitations;
(B) the aggregate principal amount of the outstanding Facility B Swingline Loans
would exceed the Facility B Swingline Sublimit; or
(C) the aggregate principal amount of the outstanding Facility B US Swingline
Loans would exceed $15,000,000.
(iii) The European Administrative Agent, the European Swingline Lender and the
Facility B Lenders agree that in order to facilitate the administration of this
Agreement and the other Loan Documents, promptly after the Borrower
Representative delivers a Borrowing Request to the European Administrative Agent
(with a copy to the Administrative Agent) requesting a Eurocurrency Borrowing on
behalf of the European Borrower to be made pursuant to this Section 2.05(a)(iii)
(or the European Borrower delivers such

 

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Borrowing Request), and provided that such Eurocurrency Borrowing request is
received by the European Administrative Agent not later than 10:00 a.m., London
time, the European Swingline Lender may elect to have the terms of this
Section 2.05(a)(iii) apply to such Borrowing Request by advancing, on behalf of
the Facility B Lenders and in the amount so requested, same day funds to the
European Borrower on the date such Borrowing Request is received to the Funding
Account(s) (each such Loan, a “European Swingline Loan”), with settlement among
them as to the European Swingline Loans to take place on a periodic basis as set
forth in Section 2.05(c). Each European Swingline Loan shall be subject to all
the terms and conditions applicable to other European Revolving Loans funded by
the Facility B Lenders, except that (i) such European Swingline Loan shall
accrue interest at a rate determined by reference to the Overnight LIBO Rate and
(ii) all payments thereon shall be payable to the European Swingline Lender
solely for its own account. In addition, no European Swingline Loan shall be
made if, after giving effect thereto:
(A) the Borrowers would not be in compliance with the Revolving Exposure
Limitations;
(B) the aggregate principal amount of the outstanding Facility B Swingline Loans
would exceed the Facility B Swingline Sublimit; or
(C) the aggregate principal amount of the outstanding European Swingline Loans
would exceed $15,000,000.
(iv) The European Administrative Agent, the UK Swingline Lender and the Facility
B Lenders agree that in order to facilitate the administration of this Agreement
and the other Loan Documents, promptly after the Borrower Representative
delivers a Borrowing Request to the European Administrative Agent (with a copy
to the Administrative Agent) requesting a Eurocurrency Borrowing on behalf of
the UK Borrower to be made pursuant to this Section 2.05(a)(iv) (or the UK
Borrower delivers such Borrowing Request), and provided that such Eurocurrency
Borrowing request is received by the European Administrative Agent not later
than 10:00 a.m., London time, the UK Swingline Lender may elect to have the
terms of this Section 2.05(a)(iv) apply to such Borrowing Request by advancing,
on behalf of the Facility B Lenders and in the amount so requested, same day
funds to the UK Borrower on the date such Borrowing Request is received to the
Funding Account(s) (each such Loan, a “UK Swingline Loan”), with settlement
among them as to the UK Swingline Loans to take place on a periodic basis as set
forth in Section 2.05(c). Each UK Swingline Loan shall be subject to all the
terms and conditions applicable to other UK Revolving Loans funded by the
Facility B Lenders, except that (i) such UK Swingline Loan shall accrue interest
at a rate determined by reference to the Overnight LIBO Rate and (ii) all
payments thereon shall be payable to the UK Swingline Lender solely for its own
account. In addition, no UK Swingline Loan shall be made if, after giving effect
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(A) the Borrowers would not be in compliance with the Revolving Exposure
Limitations;
(B) the aggregate principal amount of the outstanding Facility B Swingline Loans
would exceed the Facility B Swingline Sublimit; or
(C) the aggregate principal amount of the outstanding UK Swingline Loans would
exceed $5,000,000.
(v) The Canadian Administrative Agent, the Canadian Swingline Lender and the
Facility B Lenders agree that in order to facilitate the administration of this
Agreement and the other Loan Documents, promptly after the Borrower
Representative delivers a Borrowing Request to the Canadian Administrative Agent
and the Canadian Swingline Lender (with a copy to the Administrative Agent)
requesting a Canadian Prime Rate Borrowing or an ABR Borrowing on behalf of the
Canadian Borrower (or the Canadian Borrower requests such Borrowing) to be made
pursuant to this Section 2.05(a)(v), and provided that such Canadian Prime Rate
Borrowing request or ABR Borrowing request, as applicable, is received by the
Canadian Administrative Agent and the Canadian Swingline Lender not later than
11 a.m., Local Time, the Canadian Swingline Lender may elect to have the terms
of this Section 2.05(a)(v) apply to such Borrowing Request by advancing, on
behalf of the Facility B Lenders and in the amount so requested, same day funds
to the Canadian Borrower on the date such Borrowing Request is received to the
Funding Account(s) (each such Loan, a “Canadian Swingline Loan”), with
settlement among them as to the Canadian Swingline Loans to take place on a
periodic basis as set forth in Section 2.05(c). Each Canadian Swingline Loan
shall be subject to all the terms and conditions applicable to other Loans
funded by the Facility B Lenders that are Canadian Prime Rate Loans or Canadian
Loans that are ABR Loans, as applicable, except that all payments thereon shall
be payable to the Canadian Swingline Lender solely for its own account. In
addition, no Canadian Swingline Loan shall be made if, after giving effect
thereto:
(A) the Borrowers would not be in compliance with the Revolving Exposure
Limitations;
(B) the aggregate principal amount of the outstanding Facility B Swingline Loans
would exceed the Facility B Swingline Sublimit; or
(C) the aggregate principal amount of the outstanding Canadian Swingline Loans
would exceed $5,000,000.
(b) Lender Participations. Upon the making of a Facility A Swingline Loan or a
Facility B Swingline Loan (whether before or after the occurrence of a Default
and regardless of whether a Settlement has been requested with respect to such
Swingline Loan), each Facility A Lender or Facility B Lender, as applicable,
shall be deemed, without further action by any party hereto, to have
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purchased from the applicable Swingline Lender, the Administrative Agent, the
European Administrative Agent or the Canadian Administrative Agent, as the case
may be, without recourse or warranty, an undivided interest and participation in
such Swingline Loan in proportion to its Applicable Percentage of the Facility A
Commitments or Facility B Commitments, as applicable. The applicable Swingline
Lender, the Administrative Agent, the Canadian Administrative Agent or the
European Administrative Agent may, at any time, require the applicable Lenders
to fund, in the currency in which the applicable Swingline Loan was denominated,
their participations. From and after the date, if any, on which any Lender is
required to fund (and has funded) its participation in any Swingline Loan
purchased hereunder, the Administrative Agent, the Canadian Administrative Agent
or the European Administrative Agent, as applicable, shall promptly distribute
to such Lender, such Lender’s Applicable Percentage of all payments of principal
and interest and all proceeds of Collateral received by such Agent in respect of
such Loan.
(c) Swingline Settlements. Each of the Administrative Agent, the Canadian
Administrative Agent and the European Administrative Agent, on behalf of the US
Swingline Lender, the European Swingline Lender, the UK Swingline Lender or the
Canadian Swingline Lender, as applicable, shall request settlement (a
“Settlement”) with the Facility A Lenders or Facility B Lenders, as applicable,
on at least a weekly basis or on any earlier date that the Administrative Agent
elects, by notifying the applicable Lenders of such requested Settlement by
facsimile or e-mail no later than 11:00 a.m. Local Time (i) on the date of such
requested Settlement (the “Settlement Date”) with regard to US Swingline Loans,
(ii) two Business Days prior to the Settlement Date with regard to Canadian
Swingline Loans (or on the date of such requested Settlement, if a Default or an
Event of Default has occurred and is continuing) and (iii) two Business Days
prior to the Settlement Date with regard to European Swingline Loans and UK
Swingline Loans (or on the date of such requested Settlement, if a Default or an
Event of Default has occurred and is continuing) (the date of any request made
pursuant to clauses (i), (ii) or (iii) above, a “Settlement Request Date”). Each
Facility A Lender or Facility B Lender, as applicable (other than the Swingline
Lenders, in the case of the Swingline Loans) shall transfer, in the currency in
which the applicable Loan was denominated, the amount of such Lender’s
Applicable Percentage of the outstanding principal amount of the applicable Loan
with respect to which Settlement is requested to the Administrative Agent, the
Canadian Administrative Agent or the European Administrative Agent, as
applicable, to an account of such Agent as such Agent may designate, not later
than 2:00 p.m., Local Time, on such Settlement Date. Settlements may occur
during the existence of a Default and whether or not the applicable conditions
precedent set forth in Section 4.02 have then been satisfied. Such amounts
transferred to the applicable Agent shall be applied against the amounts of the
applicable Swingline Lender’s Swingline Loans and, together with such Swingline
Lender’s Applicable Percentage of such Swingline Loan, shall (so long as no
Event of Default pursuant to clause (h) or (i) of Article VII shall have
occurred and be continuing) constitute Revolving Loans of such applicable
Lenders (and shall no longer constitute Swingline Loans). Any such amounts
comprising Revolving Loans and transferred to the applicable Agent to be applied
against Swingline Loans made pursuant to Section 2.05(a)(ii), 2.05(a)(iii) or
2.05(a)(iv) shall constitute Eurocurrency Revolving Loans with an Interest
Period of one week. If any such amount referred to in this clause (c) is not
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Lender on such Settlement Date, the applicable Swingline Lender shall be
entitled to recover such amount on demand from such Lender together with
interest thereon as specified in Section 2.07.
SECTION 2.06 Letters of Credit. (a) General. Subject to the terms and conditions
set forth herein, the Borrower Representative may request the issuance of
Letters of Credit for its own account or for the account of another Borrower (or
any Borrower may request the issuance of Letters of Credit for its own account),
in a form reasonably acceptable to the Administrative Agent, European
Administrative Agent or Canadian Administrative Agent, as applicable, and the
applicable Issuing Bank (a “Letter of Credit Request”), at any time and from
time to time during the Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower Representative or any Borrower to, or entered into by the Borrower
Representative or any Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower Representative (or
the applicable Borrower) shall hand deliver or facsimile (or transmit by
electronic communication, if arrangements for doing so have been approved by the
applicable Issuing Bank) to the applicable Issuing Bank and the Administrative
Agent (in the case of Facility A Letters of Credit), the Canadian Administrative
Agent (in the case of Canadian Letters of Credit) with a copy to the
Administrative Agent, or the European Administrative Agent (with respect to
European Letters of Credit, UK Letters of Credit and US Letters of Credit that
are Facility B Letters of Credit) with a copy to the Administrative Agent, prior
to 9:00 a.m., Local Time, at least three Business Days prior to the requested
date of issuance, amendment, renewal or extension, a Letter of Credit Request,
or identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the currency of such Letter of Credit (which shall be in dollars, in the
case of each Facility A Letter of Credit, dollars, Sterling or Euros, in the
case of each Facility B Letter of Credit issued on behalf of the European
Borrower or the UK Borrower, dollars or Canadian Dollars, in the case of each
Facility B Letter of Credit issued on behalf of the Canadian Borrower or
dollars, Canadian Dollars, Euros, Sterling or Yen, in the case of each Facility
B Letter of Credit issued on behalf of the Company), the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the applicable
Issuing Bank, the applicable Borrower also shall submit a letter of credit
application on such Issuing Bank’s standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the
aggregate LC Exposure shall not exceed the LC Sublimit, (ii) the aggregate
principal amount of outstanding Letters of Credit that are standby Letters of
Credit shall not exceed $65,000,000 and (iii) the Borrowers shall be in
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(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension), subject to automatic
extension or renewal for successive one-year periods (but in no event shall such
renewed Letter of Credit expire on a date that is later than the date set forth
in clause (ii) below) and (ii) the date that is five Business Days prior to the
Maturity Date (it being understood that any Letter of Credit that provides for
time drafts to be submitted thereunder shall have an expiry date which is in
advance of such date five Business Days prior to the Maturity Date by the number
of days contemplated for such time drafts).
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of any Issuing Bank or the Lenders, the applicable Issuing Bank
hereby grants to each Facility A Lender, with respect to a Facility A Letter of
Credit, or each Facility B Lender, with respect to a Facility B Letter of
Credit, and each Facility A Lender or Facility B Lender, as applicable, hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, (i) each Facility A Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, (ii) with respect to
any Facility B Letter of Credit other than a Canadian Letter of Credit, each
Facility B Lender hereby absolutely and unconditionally agrees to pay to the
European Administrative Agent and (iii) with respect to any Canadian Letters of
Credit, each Facility B Lender hereby absolutely and unconditionally promises to
pay the Canadian Administrative Agent, in each case in the same currency as the
applicable LC Disbursement, for the account of the applicable Issuing Bank, such
Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank
and not reimbursed by the applicable Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to such Borrower for any reason. Each Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If any Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the applicable Borrower shall reimburse such LC
Disbursement by paying to (i) the Administrative Agent (in the case of any
Facility A Letter of Credit), (ii) the European Administrative Agent (with
respect to any Facility B Letter of Credit other than a Canadian Letter of
Credit) and (iii) the Canadian Administrative Agent (with respect to any
Canadian Letter of Credit), in each case in the currency in which the applicable
Letter of Credit was issued, an amount equal to such LC Disbursement not later
than 1:00 p.m., Local Time, on the date that such LC Disbursement is made, if
the Borrower Representative or the applicable Borrower shall have received
notice of such LC Disbursement prior to 12:00 p.m., Local Time, on such date,
or, if such notice has not been received by the Borrower Representative or the
applicable Borrower prior to such time on such date, then not later than
12:00 p.m., Local Time, on (i) the Business Day that the Borrower Representative
or the applicable Borrower receives such notice, if such notice is received
prior to 12:00 p.m., Local Time, on the day of receipt, or

 

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(ii) the Business Day immediately following the day that the Borrower
Representative or the applicable Borrower receives such notice, if such notice
is not received prior to such time on the day of receipt; provided that the
Borrower Representative on behalf of the applicable Borrower (or the applicable
Borrower) may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.05 that such payment be financed with a
Borrowing of Revolving Loans or a Swingline Loan in an equivalent amount and
like currency and, to the extent so financed, the Borrower’s obligation to make
such payment shall be discharged and replaced by the resulting Borrowing of
Revolving Loans or a Swingline Loan; provided further that no such payment shall
be permitted to be financed with a Eurocurrency Borrowing. If any Borrower fails
to make such payment when due, the Administrative Agent, the Canadian
Administrative Agent or the European Administrative Agent, as applicable, shall
notify each Facility A Lender or Facility B Lender, as applicable, of the
applicable LC Disbursement, the payment then due from the applicable Borrower in
respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each applicable Lender shall pay to the
Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable, in the same currency as the applicable LC
Disbursement, its Applicable Percentage of the payment then due from the
applicable Borrower, in the same manner as provided in Section 2.07 with respect
to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the applicable Agent shall promptly
pay to the applicable Issuing Bank the amounts so received by it from the
Lenders. Promptly following receipt by the Administrative Agent, the Canadian
Administrative Agent or the European Administrative Agent, as the case may be,
of any payment from a Borrower pursuant to this paragraph, such Agent shall
distribute such payment to the applicable Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse the
applicable Issuing Bank, then such Agent shall distribute such payment to such
Lenders and the applicable Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse the applicable
Issuing Bank for any LC Disbursement (other than the funding of Revolving Loans
or a Swingline Loan as contemplated above) shall not constitute a Loan and shall
not relieve the Borrowers or the Loan Guarantors of their respective obligations
to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers’ obligations to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers’ obligations hereunder. No
Administrative Agent, Collateral Agent, Lender or Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
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delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the applicable Issuing Bank; provided that the
foregoing shall not be construed to excuse the applicable Issuing Bank from
liability to any Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by such Borrower
that are caused by the applicable Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of an
Issuing Bank (as finally determined by a court of competent jurisdiction), such
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
applicable Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(g) Disbursement Procedures. The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The applicable Issuing Bank shall
promptly notify the Administrative Agent, Canadian Administrative Agent or the
European Administrative Agent, as applicable, and the Borrower Representative
(or applicable Borrower) by telephone (confirmed by facsimile or .pdf
transmission) of such demand for payment and whether such Issuing Bank has made
or will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrowers or the Loan
Guarantors of their obligations to reimburse the applicable Issuing Bank and the
applicable Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If any Issuing Bank shall make any LC Disbursement, then,
unless a Borrower shall reimburse such LC Disbursement in full on the date such
LC Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that a Borrower reimburses such LC Disbursement, at the rate per annum
then applicable to (x) ABR Revolving Loans, in the case of an LC Disbursement in
respect of a Facility A Letter of Credit or a Canadian Letter of Credit
denominated in dollars, (y) Canadian Prime Rate Loans, in the case of an LC
Disbursement in respect of a Canadian Letter of Credit denominated in Canadian
Dollars, and (z) Overnight LIBO Loans, in the case of an LC Disbursement in
respect of Facility B Letters of Credit other than Canadian Letters of Credit;
provided that, if the Borrowers fail to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(e) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
applicable Issuing Bank, except that interest accrued on and after the date of
payment by any Lender pursuant to paragraph (d) or (e) of this Section to
reimburse such Issuing Bank shall be for the account of such Lender to the
extent of such payment.

 

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(i) Replacement of the Issuing Banks. Any Issuing Bank may be replaced at any
time by written agreement among the Borrower Representative, the Administrative
Agent (not to be unreasonably withheld or delayed), the replaced Issuing Bank
and the successor Issuing Bank. The Administrative Agent shall notify the
Lenders of any such replacement of an Issuing Bank. At the time any such
replacement shall become effective, each Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b)
owing by it. From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required (or permitted) to issue
additional Letters of Credit or to renew existing Letters of Credit. If any
Issuing Bank (or with respect to any Issuing Bank that is an Affiliate of a
Lender hereunder, if any such Lender that is an Affiliate thereof) assigns, in
one transaction or a series of transactions, all of its Loans and Commitments
hereunder pursuant to Section 9.04, such Issuing Bank shall be deemed to have
agreed to be replaced by the Administrative Agent as an Issuing Bank pursuant to
this Section 2.06(i) and no notification to the Lenders shall be required.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower Representative receives notice
from the Administrative Agent or the Required Lenders demanding the deposit of
cash collateral pursuant to this paragraph or if any of the other provisions
hereof require cash collateralization (or, on the Business Day on or immediately
following the maturity of the Loans if the Loans have been accelerated, without
any further notice), the Borrowers shall deposit in an account with the
applicable Collateral Agent, in the name of such Collateral Agent and for the
benefit of the Agents, the applicable Lenders and the applicable Issuing Banks
(each an “LC Collateral Account”), an amount, in cash and in the currency in
which the applicable Letters of Credit are denominated, equal to 103% of the LC
Exposure as of such date plus accrued and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to any Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the applicable Collateral Agent as collateral for the
payment and performance of the Secured Obligations. Each Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account or such account shall be subject to a Deposit
Account Control Agreement and/or acknowledgement of notice, as applicable, and
each Borrower hereby grants the applicable Collateral Agent (for the benefit of
the Agents, the applicable Lenders and the applicable Issuing Banks) a security
interest in the LC Collateral Accounts. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of each Collateral Agent and at each Borrower’s risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by each Collateral Agent to reimburse the applicable Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
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reimbursement obligations of such Borrowers for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing more than 50% of the total LC Exposure),
be applied to satisfy other Secured Obligations. If the Borrowers are required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the applicable Borrower or Borrower Representative for the
account of the applicable Borrower within two Business Days after all such
Defaults have been cured or waived.
(k) On the Effective Date, (i) each Existing Letter of Credit, to the extent
outstanding, shall be automatically and without further action by the parties
thereto deemed converted into a Letter of Credit under the applicable Facility
(as reflected on Schedule 2.06) at the request of the Company pursuant to this
Section 2.06 and subject to the provisions hereof as if each such Existing
Letter of Credit had been issued on the Effective Date, (ii) each such Existing
Letter of Credit shall be included in the calculation of LC Exposure and
“Facility A LC Exposure” or “Facility B LC Exposure”, as applicable, and
(iii) all liabilities of the Company and the other Loan Parties with respect to
such Existing Letters of Credit shall constitute Obligations.
(l) Reporting. Unless otherwise requested by the Administrative Agent, each
Issuing Bank shall report in writing to the Administrative Agent (and the
Administrative Agent shall notify the European Administrative Agent and/or the
Canadian Administrative Agent, as applicable) (i) on each Business Day, the
aggregate undrawn amount of all outstanding Letters of Credit issued by it
(including a breakdown of the aggregate undrawn amount of all standby Letters of
Credit and all trade Letters of Credit issued by it), (ii) on each Business Day
on which such Issuing Bank expects to issue, amend, renew or extend any Letter
of Credit, whether such Letter of Credit is a trade, financial or performance
Letter of Credit, and the aggregate face amount of the Letters of Credit to be
issued, amended, renewed or extended by it on such date, and no Issuing Bank
shall be permitted to issue, amend, renew or extend such Letter of Credit
without first notifying the Administrative Agent as set forth herein, (iii) on
each Business Day on which such Issuing Bank makes any LC Disbursement, the date
of such LC Disbursement and the amount and currency of such LC Disbursement and
(iv) on any other Business Day, such other information as the Administrative
Agent shall reasonably request, including but not limited to prompt verification
of such information as may be requested by the Administrative Agent.
SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Local Time, to the account of the
Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable, in an amount equal to such Lender’s
Applicable Percentage; provided that Swingline Loans shall be made as provided
in Section 2.05. Each of the Administrative Agent, the Canadian Administrative
Agent and the European Administrative Agent, as applicable, will make such Loans
available to the Borrower Representative (or, if directed by the Borrower
Representative, to the account of the applicable Borrower) by promptly crediting
the amounts so received, in like funds, to the Funding Account(s); provided that
Revolving Loans made to finance the reimbursement of (i) an LC Disbursement as
provided in Section 2.06(e) shall be remitted by the Administrative Agent, the
Canadian Administrative Agent or the European Administrative Agent, as
applicable, to the applicable Issuing Bank and (ii) a Protective Advance shall
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Agent, the Canadian Administrative Agent or the European Administrative Agent,
as applicable, and disbursed in its discretion.
(b) Unless the Administrative Agent, the Canadian Administrative Agent or the
European Administrative Agent, as applicable, shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent, the Canadian Administrative Agent or
the European Administrative Agent, as applicable, such Lender’s share of such
Borrowing, the Administrative Agent, the Canadian Administrative Agent or the
European Administrative Agent, as applicable, may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. In such event, if a Lender has not
in fact made its share of the applicable Borrowing available to the
Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable (a “Non-Funding Lender”), then the
applicable Lender and the Borrowers agree (jointly and severally with each other
Borrower, but severally and not jointly with the applicable Lenders) to pay to
the Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable, forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the applicable Borrower to but excluding the date of
payment to the Administrative Agent, the Canadian Administrative Agent or the
European Administrative Agent, as applicable, at (i) in the case of such Lender,
the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable, in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrowers, the interest
rate applicable to ABR Loans (in the case of dollar-denominated amounts),
Canadian Prime Rate Loans (in the case of Canadian Dollar-denominated amounts)
or Overnight LIBO Loans (in the case of Euro, Yen or Sterling-denominated
amounts). If such Lender pays such amount to the Administrative Agent, the
Canadian Administrative Agent or the European Administrative Agent, as
applicable, then such amount shall constitute such Lender’s Loan included in
such Borrowing. Notwithstanding the foregoing, the Borrowers shall preserve
their rights and remedies against any Non-Funding Lender which has not made
Loans required by the terms and provisions hereof.
SECTION 2.08 Interest Elections. (a) Each Borrowing of Revolving Loans initially
shall be of the Type specified in the applicable Borrowing Request and (i) in
the case of a Eurocurrency Borrowing of Revolving Loans, shall have an initial
Interest Period as specified in such Borrowing Request and (ii) in the case of
BA Drawings, shall have a Contract Period as specified in such Borrowing
Request. Thereafter, the Borrower Representative may elect to convert such
Borrowing to a different Type, to convert BA Drawings to Canadian Prime Rate
Loans, to convert Canadian Prime Rate Loans (other than Swingline Loans) into BA
Drawings or to continue such Borrowing and, in the case of a Eurocurrency
Borrowing of Revolving Loans, may elect Interest Periods therefor, all as
provided in this Section. The Borrower Representative may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings or Protective Advances, which may not be converted or
continued.

 

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(b) To make an election pursuant to this Section, the Borrower Representative
shall notify the (i) Administrative Agent, with respect to each Facility A
Revolving Loan, (ii) the European Administrative Agent (with a copy to the
Administrative Agent), with respect to any Facility B Revolving Loan other than
a Canadian Revolving Loan, and (iii) the Canadian Administrative Agent (with a
copy to the Administrative Agent) with respect to any Canadian Revolving Loan,
of such election by telephone by the time that a Borrowing Request would be
required under Section 2.03 if the Borrowers were requesting a Borrowing of
Revolving Loans of the Type resulting from such election to be made on the
effective date of such election, subject to clause (f) below in the case of BA
Drawings. Each such telephonic Interest Election Request shall be irrevocable
and shall be confirmed promptly by facsimile to the European Administrative
Agent or by hand delivery, facsimile or .pdf transmission to the Administrative
Agent or the Canadian Administrative Agent, as applicable, of a written Interest
Election Request in a form approved by the Administrative Agent, the Canadian
Administrative Agent or the European Administrative Agent, as applicable, and
signed by the Borrower Representative.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(A) the Borrower, the Facility and the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (C) and (D) below shall be specified for each resulting Borrowing);
(B) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
(C) whether the resulting Borrowing is to be an ABR Borrowing, a Eurocurrency
Borrowing, a Canadian Prime Rate Borrowing, an Overnight LIBO Rate Borrowing or
a BA Drawing; and
(D) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period” and if the
resulting Borrowing is a BA Drawing, the Contract Period to be applicable
thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Contract Period”.
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrowers shall be deemed to have
selected an Interest Period of one month’s duration.
(d) Promptly following receipt of an Interest Election Request, the
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Agent, as applicable, shall advise each Lender of the details thereof and of
such Lender’s portion of each resulting Borrowing.
(e) If the Borrower Representative fails to deliver a timely Interest Election
Request with respect to a Eurocurrency Borrowing of Revolving Loans prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to (i) an ABR Borrowing, in the case of a Eurocurrency
Borrowing of either Facility A Revolving Loans or Canadian Revolving Loans
denominated in dollars, (ii) a Eurocurrency Borrowing with an Interest Period of
one month, in the case a Eurocurrency Borrowing of Facility B Revolving Loans
other than Canadian Revolving Loans and (iii) a Canadian Prime Rate Borrowing,
in the case of any BA Drawing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower Representative,
then, so long as an Event of Default is continuing (i) no outstanding Borrowing
of Revolving Loans may be converted to or continued as a Eurocurrency Borrowing,
(ii) no outstanding Canadian Prime Rate Loans may be converted to BA Drawings,
and (iii) unless repaid, (A) each Eurocurrency Borrowing of Facility A Loans or
of Canadian Revolving Loans denominated in dollars shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto, (B) each
Eurocurrency Borrowing of Facility B Revolving Loans other than Canadian
Revolving Loans shall be converted at the end of the Interest Period applicable
thereto to a Eurocurrency Borrowing with an Interest Period of one month (or
such shorter period determined by the European Administrative Agent in its
Permitted Discretion) and (C) each BA Drawing shall be converted to, or repaid
with the proceeds of, a Canadian Prime Rate Borrowing at the end of the Contract
Period applicable thereto.
(f) At or before 12:00 p.m. 3 Business Days before the last day of the Contract
Period of any BA Drawing, the Borrower Representative shall give to the Canadian
Administrative Agent its written Interest Election Request in respect of such BA
Drawing which shall specify either that the Canadian Borrower intends to repay
the maturing B/As on such date or to continue to issue B/As on such date to
provide for the payment of the maturing B/As. If the Borrower Representative
fails to deliver such timely notice with respect to a BA Drawing prior to the
end of the Contract Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Contract Period such Borrowing
shall be converted to Canadian Prime Rate Loans. Upon the conversion to or
continuation of any Borrowing or portion thereof as a BA Drawing, the Discount
Proceeds that would otherwise be payable to the Canadian Borrower by each
Facility B Lender pursuant to Section 2.21(d) in respect of such new BA Drawing
shall be applied against the principal amount of such Borrowing (in the case of
a conversion) or the reimbursement obligation owed to such Lender in respect of
such maturing B/As (in the case of a continuation) (collectively, the “maturing
amounts”) and the Canadian Borrower shall pay to such Facility B Lender an
amount equal to the excess of the maturing amounts over such Discount Proceeds.
SECTION 2.09 Termination and Reduction of Commitments; Increase in Commitments.
(a) Unless previously terminated, all Commitments shall terminate on the
Maturity Date.

 

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(b) The Borrowers may at any time terminate in full the Commitments and/or may
at any time terminate in full the European Sublimit, the UK Sublimit and/or the
Canadian Sublimit upon (i) the payment in full in cash of all outstanding Loans,
European Loans, UK Loans or Canadian Loans, as applicable, together with accrued
and unpaid interest thereon and on any Letters of Credit, European Letters of
Credit, UK Letters of Credit or Canadian Letters of Credit, as applicable, (ii)
the cancellation and return of all outstanding Letters of Credit, European
Letters of Credit or Canadian Letters of Credit, as applicable (or
alternatively, with respect to each applicable Letter of Credit, the furnishing
to the applicable Collateral Agent of a cash deposit in the currency in which
the applicable Letters of Credit are denominated (or at the discretion of the
Administrative Agent a back up standby letter of credit satisfactory to the
Administrative Agent and in the currency in which the applicable Letters of
Credit are denominated) equal to 103% of the LC Exposure as of such date),
(iii) the payment in full in cash of the accrued and unpaid fees, if applicable,
and (iv) the payment in full in cash of all reimbursable expenses and other
Obligations, Obligations of the European Borrower, Obligations of the UK
Borrower or Obligations of the Canadian Borrower, as applicable, together with
accrued and unpaid interest thereon. Upon the termination in full of the
European Sublimit and the satisfaction in full of the Obligations of the
European Borrower (other than Obligations in respect of contingent liabilities
not then due), (x) the European Borrower will be released from its obligations
under this Agreement and the other Loan Documents (including, but not limited
to, all reporting obligations contained in Section 5.01 relating to the European
Borrowing Base) in its capacity as such, other than in respect of obligations
which expressly survive the term of this Agreement, (y) all Collateral securing
the European Loans, and any Loan Guaranties of the European Loans, will be
released and (z) all events relating to any European Account Transfer Trigger
Event will cease to have effect. Notwithstanding the foregoing, the termination
of the European Sublimit without a corresponding termination of the Commitments
shall have no effect on the availability to the Company of all or any portion of
the Facility B Commitments. Upon the termination in full of the UK Sublimit and
the satisfaction in full of the Obligations of the UK Borrower (other than
Obligations in respect of contingent liabilities not then due), (x) the UK
Borrower will be released from its obligations under this Agreement and the
other Loan Documents (including, but not limited to, all reporting obligations
contained in Section 5.01 relating to the UK Borrowing Base) in its capacity as
such, other than in respect of obligations which expressly survive the term of
this Agreement and (y) all Collateral securing the UK Loans, and any Loan
Guaranties of the UK Loans, will be released. Notwithstanding the foregoing, the
termination of the UK Sublimit without a corresponding termination of the
Commitments shall have no effect on the availability to the Company of all or
any portion of the Facility B Commitments. Upon the termination in full of the
Canadian Sublimit and the satisfaction in full of the Obligations of the
Canadian Borrower (other than Obligations in respect of contingent liabilities
not then due excluding, for greater certainty, any Obligations in respect of BA
Drawings), (x) the Canadian Borrower will be released from its obligations under
this Agreement and the other Loan Documents (including, but not limited to, all
reporting obligations contained in Section 5.01 relating to the Canadian
Borrowing Base) in its capacity as such, other than in respect of obligations
which expressly survive the term of this Agreement and (y) all Collateral
securing the Canadian Loans, and any Loan Guaranties of the Canadian Loans, will
be released. Notwithstanding the foregoing, the termination of the Canadian
Sublimit without a corresponding termination of the Commitments shall have no
effect on the availability to the Company of all or any portion of the Facility
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payments of principal, interest, fees and expenses, and the furnishing of cash
deposits, in each case contemplated in this Section 2.09(b) shall be made (i) to
the Administrative Agent to the extent such payment or deposit is made in
connection with a Facility A Loan or Facility A Letter of Credit, (ii) to the
European Administrative Agent to the extent such payment or deposit is made in
connection with a Facility B Loan other than a Canadian Loan or a Facility B
Letter of Credit other than a Canadian Letter of Credit and (iii) to the
Canadian Administrative Agent to the extent such payment or deposit is made in
connection with a Canadian Revolving Loan or Canadian Letter of Credit.
(c) The Borrowers may from time to time reduce the Commitments; provided that
(i) each such reduction shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000, (ii) each such reduction shall be
applied to the Facility A Commitments and the Facility B Commitments ratably in
accordance with the aggregate amount of the Commitments at such time, and
(iii) the Borrowers shall not reduce the Commitments if, after giving effect to
any concurrent prepayment of the Loans in accordance with Section 2.10, the
Borrowers would not be in compliance with the Revolving Exposure Limitations.
(d) The Borrower Representative shall notify (x) the Administrative Agent of any
election to terminate or reduce the Facility A Commitments, (y) the European
Administrative Agent (with a copy to the Canadian Administrative Agent and the
Administrative Agent) of any election to terminate or reduce the Facility B
Commitments, the European Sublimit or the UK Sublimit and (z) the Canadian
Administrative Agent (with a copy to the Administrative Agent) of any election
to terminate or reduce the Canadian Sublimit, in each case under paragraph
(b) or (c) of this Section, at least three Business Days prior to the effective
date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the
Administrative Agent, European Administrative Agent or Canadian Administrative
Agent, as applicable, shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower Representative pursuant to this Section shall
be irrevocable; provided that a notice of termination of the Commitments
delivered by the Borrower Representative may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower Representative (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
(e) The Borrowers shall have the right to request an increase of the Commitments
by an aggregate amount of up to $150,000,000 by obtaining additional
Commitments, either from one or more of the Lenders or another lending
institution provided that (i) any such request for an increase shall be in a
minimum amount of $25,000,000, (ii) the Administrative Agent has approved the
identity of any such new Lender, such approval not to be unreasonably withheld
or delayed, (iii) any such new Lender assumes all of the rights and obligations
of a “Lender” hereunder, and (iv) the procedures described in Section 2.09(f)
have been satisfied. Each such increase shall increase the Facility A
Commitments and the Facility B Commitments ratably in accordance with the
aggregate amount of the Commitments at such time.

 

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(f) Any amendment hereto providing for the increase of the Commitment of a
Lender or addition of a Lender shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall only require the written
signatures of the Administrative Agent, the Borrowers, the Loan Parties party
hereto and the Lender(s) being added or increasing their Commitment, subject
only to the approval of the Supermajority Lenders if any such increase would
cause the Commitments to exceed $500,000,000. As a condition precedent to such
an increase, (a) the Loan Parties shall deliver to the Administrative Agent a
certificate of each Loan Party (in sufficient copies for each Lender, if
requested by the Administrative Agent) signed by an authorized officer of such
Loan Party (i) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such increase, (ii) certifying that any
security and guarantee confirmations as may have been reasonably requested by
the Administrative Agent have been delivered and (iii) certifying that, before
and after giving effect to such increase, (A) the representations and warranties
of the Loan Parties contained in Article III and the other Loan Documents are
true and correct, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and (B) no Default shall have occurred and be
continuing and (b) each Loan Party shall deliver any confirmation of the
security interests or guarantee granted by it pursuant to the Loan Documents as
the Administrative Agent may reasonably request. In no event shall the interest
rate applicable in respect of additional Commitments or increases in Commitments
made pursuant to this clause (f) be higher than the interest rate paid and
payable to the then existing Lenders in respect of their Commitments and the
terms applicable to such additional or increased Commitments shall be
substantially the same as for the existing Commitments).
(g) Within a reasonable time after the effective date of any increase, the
Administrative Agent shall, and is hereby authorized and directed to, revise the
Commitment Schedule to reflect such increase and shall distribute such revised
Commitment Schedule to each of the Lenders and the Borrowers, whereupon such
revised Commitment Schedule shall replace the old Commitment Schedule and become
part of this Agreement. On the Business Day following any such increase, all
outstanding ABR Loans shall be reallocated among the Lenders (including any
newly added Lenders) in accordance with the Lenders’ respective revised
Applicable Percentages. Eurocurrency Loans shall not be reallocated among the
Lenders prior to the expiration of the applicable Interest Period in effect at
the time of any such increase.
SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The Borrowers hereby
unconditionally promise to pay to the Administrative Agent, the Canadian
Administrative Agent or the European Administrative Agent, as applicable (i) for
the account of each applicable Lender the then unpaid principal amount of each
Revolving Loan on the Maturity Date, (ii) for the account of each applicable
Facility B Lender, the then unpaid principal amount of any BA Drawing in
accordance with Section 2.21, and (iii) the then unpaid amount of each
Protective Advance on the earlier of the Maturity Date and demand by such Agent.
For the avoidance of doubt, all payments of principal contemplated in this
Section 2.10(a) shall be made (i) to the Administrative Agent to the extent such
payment is made in connection with a Facility A Revolving Loan or Facility A
Protective Advance, (ii) to the European Administrative Agent to the extent such
payment is made in connection with (x) a Facility B Revolving Loan other than a
Canadian Revolving Loan or (y) a Facility B Protective Advance other than a
Canadian Protective Advance, and (iii) to the Canadian Administrative Agent to
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made in connection with a Canadian Revolving Loan, a BA Drawing or a Canadian
Protective Advance.
(b) On each Business Day during any Full Cash Dominion Period, the
Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent, as applicable, shall apply, subject to Section 2.18(b),
and in a manner consistent with the last sentence of Section 2.09(b), all funds
credited to any applicable Collection Account as of 10:00 a.m., Local Time, on
such Business Day (whether or not immediately available) and made available to
it by the applicable Collateral Agent first to prepay any Protective Advances
that may be outstanding, pro rata, second to prepay the Swingline Loans and
third to prepay other Revolving Loans (without a corresponding reduction in
Commitments). Any such application of funds shall be made (i) from Collection
Accounts of the US Loan Parties first in respect of Obligations of the Company,
as directed by the Company (or, if on such date the applicable conditions
precedent set forth in Section 4.02 have not been satisfied, in respect of the
Obligations of the Company under each Facility ratably in accordance with the
then outstanding amounts thereof) and second in respect of Obligations of the
European Borrower, the UK Borrower and the Canadian Borrower, as directed by the
Company (or, if on such date the applicable conditions precedent set forth in
Section 4.02 have not been satisfied, in respect of the Obligations of the
European Borrower, the UK Borrower and the Canadian Borrower, as directed by the
Administrative Agent), in each case, in a manner consistent with the first
sentence of this clause (b), (ii) from Collection Accounts of the Specified
European Loan Parties or the Canadian Loan Parties, solely in respect of
Obligations of the European Borrower, the UK Borrower and the Canadian Borrower,
respectively, as directed by the Company (or, if on such date the applicable
conditions precedent set forth in Section 4.02 have not been satisfied, in
respect of the Obligations of the European Borrower, the UK Borrower and the
Canadian Borrower, as directed by the Administrative Agent), in a manner
consistent with the first sentence of this clause (b), and (iii) from Collection
Accounts of the UK Borrower, solely in respect of the Obligations of the UK
Borrower, as directed by the Administrative Agent. Notwithstanding the
foregoing, in the event that (x) the Administrative Agent, the Canadian
Administrative Agent or the European Administrative Agent, as applicable,
receives amounts pursuant to this Section 2.10(b) in any currency in which no
Obligations are then outstanding, the Administrative Agent, the Canadian
Administrative Agent or the European Administrative Agent, as applicable, may
elect to either (A) solely to the extent the conditions set forth in
Section 4.02 have been met, return such amounts to the applicable Loan Party
upon such Loan’s Party request, (B) convert such amounts to another currency and
apply such converted amounts to outstanding Obligations pursuant to this
Section 2.10(b) or (C) retain such amounts for a reasonable period of time
pending any action taken pursuant to clauses (A) or (B) above or (y) on any
Interim Calculation Date, the European Administrative Agent receives amounts
from Collection Accounts of the Specified European Loan Parties pursuant to this
Section 2.10(b) in excess of the Adjusted Funding Amount, the European
Administrative Agent may elect to either (A) retain such excess amounts for a
reasonable period of time to fund future requests for European Swingline Loans
pursuant to Section 2.05, (B) apply such excess amounts to the Obligations
outstanding on such date pursuant to this Section 2.10(b) or (C) solely to the
extent the conditions set forth in Section 4.02 have been met, return such
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(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent,
the Canadian Administrative Agent or the European Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.
(e) The entries made in the accounts maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender,
the Administrative Agent, the Canadian Administrative Agent or the European
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11 Prepayment of Loans. (a) The Borrowers shall have the right at any
time and from time to time, and without premium or penalty, to prepay any
Borrowing in whole or in part, subject to prior notice in accordance with
paragraph (d) of this Section, except that the Borrowers shall not prepay any BA
Drawings except on the last day of the Contract Period applicable thereto
(subject to any mandatory prepayment requirements hereunder).
(b) Except for Protective Advances permitted under Section 2.04, in the event
and on such occasion that the Borrowers are not in compliance with the Revolving
Exposure Limitations, the Borrowers shall promptly prepay (or, in the case of LC
Exposure, cash collateralize) Revolving Loans, LC Exposure and/or Swingline
Loans in an aggregate amount necessary such that, on a pro forma basis following
such prepayments or cash collateralization, the Borrowers shall be in compliance
with the Revolving Exposure Limitations (it being understood that, in order to
comply with this clause (b), the Borrowers shall prepay all such Revolving Loans
and Swingline Loans prior to any cash collateralization of LC Exposure
hereunder).
(c) In the event and on each occasion that any Net Proceeds are received by or
on behalf of the Company or any Subsidiary in respect of any transaction
permitted pursuant to Section 6.05(g), Section 6.05(l) or Section 6.05(q), the
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Net Proceeds are received by the Company or any Subsidiary, prepay the Revolving
Loans and Swingline Loans in an aggregate amount equal to the lesser of (x) 100%
of such Net Proceeds and (y) the aggregate amount of Revolving Loans and
Swingline Loans outstanding. However, notwithstanding the foregoing, so long as
no Event of Default shall have occurred and be continuing, if any prepayment of
Eurocurrency Loans would be required to be made under this Section 2.11(c) other
than on the last day of the Interest Period therefor, the Administrative Agent,
at the direction of the Borrower Representative, shall keep such funds in a
non-interest bearing account and shall not apply such funds to the prepayment of
any such Eurocurrency Loan until the last day of such Interest Period.
(d) The Borrower Representative shall notify the Administrative Agent, the
Canadian Administrative Agent and the European Administrative Agent, as
applicable (and in the case of prepayment of a Swingline Loan, the applicable
Swingline Lender) by telephone (confirmed by facsimile or, in the case of any
notification to the Administrative Agent or the Canadian Administrative Agent,
.pdf transmission) of any prepayment hereunder (i) in the case of prepayment of
a Eurocurrency Borrowing of Revolving Loans, not later than 10:00 a.m., Local
Time, two Business Days before the date of prepayment, or (ii) in the case of
prepayment of an ABR Borrowing of Revolving Loans, a Canadian Prime Rate
Borrowing of Revolving Loans or an Overnight LIBO Borrowing of Revolving Loans,
not later than 10:00 a.m., Local Time, on the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.09, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09. Promptly following receipt of any such notice
relating to a Borrowing of Revolving Loans, the applicable Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of any Borrowing of
Revolving Loans shall be in an amount that would be permitted in the case of an
advance of a Borrowing of Revolving Loans of the same Type as provided in
Section 2.02. Each prepayment of a Borrowing of Revolving Loans shall be applied
ratably to the Revolving Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued but unpaid interest to the extent required by
Section 2.13.
(e) For the avoidance of doubt, all payments of principal, interest or fees made
pursuant to this Section 2.11 shall be made (i) to the Administrative Agent to
the extent such payment or deposit is made in connection with a Facility A Loan
or Facility A Letter of Credit, (ii) to the European Administrative Agent to the
extent such payment is made in connection with (x) a Facility B Letter of Credit
other than a Canadian Letter of Credit or (y) a Facility B Loan other than a
Canadian Loan, and (iii) to the Canadian Administrative Agent to the extent such
payment is made in connection with a Canadian Letter of Credit or a Canadian
Loan.
(f) In the event and on each occasion that any Net Proceeds are received by or
on behalf of the Company or any Subsidiary in respect of any Indebtedness
referred to in Section 6.02(p), the Borrowers shall, immediately after such Net
Proceeds are received by the Company or any Subsidiary, prepay the Revolving
Loans and Swingline Loans in an aggregate amount equal to the lesser of (x) 100%
of such Net Proceeds and (y) the aggregate amount of Revolving Loans and
Swingline Loans outstanding. However, notwithstanding the foregoing, so long as
no

 

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Event of Default shall have occurred and be continuing, if any prepayment of
Eurocurrency Loans would be required to be made under this Section 2.11(f) other
than on the last day of the Interest Period therefor, the Administrative Agent,
at the direction of the Borrower Representative, shall keep such funds in a
non-interest bearing account and shall not apply such funds to the prepayment of
any such Eurocurrency Loan until the last day of such Interest Period.
(g) For the avoidance of doubt, no mandatory prepayment hereunder shall cause a
permanent reduction in the Commitments.
SECTION 2.12 Fees. (a) The Company agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
Applicable Commitment Fee Rate on the average daily amount of the Available
Commitment of such Lender under Facility A and Facility B during the period from
and including the Effective Date to but excluding the date on which the Lenders’
Commitments terminate. Accrued commitment fees shall be payable in arrears on
the first Business Day of each calendar quarter and on the date on which the
Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed.
Notwithstanding anything to the contrary contained herein, all commitment fees
shall be paid by the Company to the Administrative Agent.
(b) The Borrowers agree to pay (i) to the Administrative Agent for the account
of each Facility A Lender a participation fee with respect to its participations
in Facility A Letters of Credit, (ii) to the European Administrative Agent for
the account of each Facility B Lender a participation fee with respect to its
participations in Facility B Letters of Credit other than Canadian Letters of
Credit, (iii) to the Canadian Administrative Agent for the account of each
Facility B Lender a participation fee with respect to its participations in
Canadian Letters of Credit, which, in each case, shall accrue at the same
Applicable Spread used to determine the interest rate applicable to Eurocurrency
Revolving Loans (or, in the case of documentary Letters of Credit, 50% of such
Applicable Spread) on the average daily amount of such Lender’s applicable LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Commitment terminates and
the date on which such Lender ceases to have any such LC Exposure, and (iv) to
the applicable Issuing Bank a fronting fee, which shall accrue at a rate per
annum to be agreed with each Issuing Bank on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) relating to Letters of Credit issued by such Issuing Bank during
the period from and including the Effective Date to but excluding the later of
the date of termination of the Commitments and the date on which there ceases to
be any LC Exposure, as well as such Issuing Bank’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the first day of each calendar quarter shall be payable on
the first Business Day of each calendar quarter and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to an

 

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Issuing Bank pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days
elapsed.
(c) The Borrowers agree to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrowers and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in immediately
available dollars, to the Administrative Agent, European Administrative Agent or
Canadian Administrative Agent, as applicable, (or to the applicable Issuing
Bank, in the case of fees payable to an Issuing Bank) for distribution, in the
case of commitment fees and participation fees, to the applicable Lenders,
ratably. Fees paid shall not be refundable under any circumstances.
SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing (including
each Facility A Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Spread.
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Spread.
(c) The Loans comprising each Overnight LIBO Borrowing (including each Facility
B Swingline Loan other than any Canadian Swingline Loan and each Facility B
Protective Advance other than any Canadian Protective Advance) shall bear
interest at the Overnight LIBO Rate plus the Applicable Spread.
(d) The Loans comprising each Canadian Prime Rate Borrowing shall bear interest
at the Canadian Prime Rate plus the Applicable Spread.
(e) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of Default, the Administrative Agent or the Required Lenders may, at their
option, by notice to the Borrower Representative (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 9.02
requiring the consent of “each Lender directly affected thereby” for reductions
in interest rates), declare that (i) all Loans and participation fees on account
of Letters of Credit shall bear interest at 2% plus the rate otherwise
applicable to such Loans or participation fees, as applicable, as provided in
the preceding paragraphs of this Section or (ii) in the case of any other amount
outstanding hereunder, (x) if such amount is denominated in dollars, such amount
shall accrue at 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section, (y) if such amount is denominated in Euros,
Sterling or Yen, such amount shall accrue at 2% plus the rate applicable to
Overnight LIBO Rate Loans as provided in paragraph (c) of this Section and
(z) if such amount is denominated in Canadian Dollars, such amount shall accrue
at 2% plus the rate applicable to Canadian Prime Rate Loans as provided in
paragraph (d) of this Section.
(f) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (e) of this Section shall be
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any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
or Canadian Prime Rate Loan prior to the end of the Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurocurrency Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion. Accrued interest shall be payable (i) to the
Administrative Agent for the account of each Facility A Lender, ratably, with
respect to interest on any Facility A Revolving Loan or Facility A Swingline
Loan, (ii) to the Administrative Agent with respect to interest on any Facility
A Protective Advance, (iii) to the European Administrative Agent for the account
of each Facility B Lender, ratably, with respect to interest on any Facility B
Revolving Loan other than any Canadian Revolving Loan or any Facility B
Swingline Loan other than any Canadian Swingline Loan, (iv) to the European
Administrative Agent with respect to interest on any European Protective
Advance, any UK Protective Advance or any Facility B US Protective Advance,
(v) to the Canadian Administrative Agent for the account of each Facility B
Lender, ratably, with respect to interest on a Canadian Revolving Loan or a
Canadian Swingline Loan, and (vi) to the Canadian Administrative Agent with
respect to interest on any Canadian Protective Advance.
(g) All interest hereunder shall be computed on the basis of a year of 360 days,
except that (i) interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and shall be
payable for the actual number of days elapsed, (ii) interest computed on Loans
and Letters of Credit denominated in Sterling shall be computed on the basis of
a year of 365 days, and shall be payable for the actual number of days elapsed
and (iii) interest and fees computed on Loans and Letters of Credit denominated
in Canadian Dollars shall be computed on the basis of a year of 365 days (or
366 days in a leap year). The applicable Alternate Base Rate, Canadian Prime
Rate, Discount Rate, Adjusted LIBO Rate or Overnight LIBO Rate shall be
determined by the Administrative Agent, the Canadian Administrative Agent or the
European Administrative Agent, as applicable, and such determination shall be
conclusive absent manifest error.
(h) For purposes of disclosure pursuant to the Interest Act (Canada), the annual
rates of interest or fees to which the rates of interest or fees provided in
this Agreement and the other Loan Documents (and stated herein or therein, as
applicable, to be computed on the basis of 360 days or any other period of time
less than a calendar year) are equivalent are the rates so determined multiplied
by the actual number of days in the applicable calendar year and divided by 360
or such other period of time, respectively.
(i) All interest hereunder shall be paid in the currency in which the Loan
giving rise to such interest is denominated.
SECTION 2.14 Alternate Rate of Interest. (a) If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing:
(A) the Administrative Agent determines (which determination shall be conclusive
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means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(B) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower
Representative and the Lenders by telephone, facsimile or .pdf transmission as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Borrower Representative and the Lenders that the circumstances giving rise
to such notice no longer exist, (i) any Interest Election Request that requests
the conversion of any Borrowing of Revolving Loans to, or continuation of any
Borrowing of Revolving Loans as, a Eurocurrency Borrowing shall be ineffective,
and any such request for a continuation of a Eurocurrency Borrowing of Facility
A Revolving Loans or Canadian Revolving Loans denominated in dollars shall be
deemed to be a request to convert such Borrowing to an ABR Borrowing, (ii) if
any Borrowing Request requests a Eurocurrency Borrowing of Facility A Revolving
Loans or Canadian Revolving Loans denominated in dollars, such Borrowing shall
be made as an ABR Borrowing and (iii) if any Borrowing Request requests (or any
Interest Rate Election requests a conversion to or continuation of) a
Eurocurrency Borrowing of Facility B Revolving Loans other than Canadian
Revolving Loans denominated in dollars, such Borrowing shall be made as an
Alternate Rate Borrowing (and any request set forth in such Interest Rate
Election shall be deemed to be a request to convert such Borrowing to an
Alternate Rate Borrowing).
(b) If at any time:
(A) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Overnight LIBO Rate; or
(B) the Administrative Agent is advised by the Required Lenders that the
Overnight LIBO Rate will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in any Overnight LIBO
Borrowing;
then the Administrative Agent shall give notice thereof to the Borrower
Representative and the Lenders by telephone, facsimile or .pdf transmission as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Borrower Representative and the Lenders that the circumstances giving rise
to such notice no longer exist, any Overnight LIBO Borrowing shall be made as an
Alternate Rate Borrowing.
SECTION 2.15 Increased Costs. (a) If any Change in Law shall:
(A) subject any Lender or any Issuing Bank to any (or any increase in any) Other
Connection Taxes with respect to this Agreement or any other Loan Document, any
Letter of Credit, or any participation in a

 

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Letter of Credit or any Loan made or Letter of Credit issued by it, except any
such Taxes imposed on or measured by its net income or profits (however
denominated), capital taxes imposed by a Canadian Governmental Authority or
franchise taxes imposed in lieu of net income, profits or Canadian capital taxes
and except to the extent the Loan Parties have paid additional amounts to such
Lender or Issuing Bank with respect to such Taxes pursuant to Section 2.17;
(B) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate or Overnight LIBO Rate) or any Issuing Bank; or
(C) impose on any Lender or any Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurocurrency Loans, Overnight LIBO
Loans, Bankers’ Acceptances or BA Equivalent Loans made by such Lender or any
Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan or Overnight LIBO Loan (or
of maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or such Issuing Bank of participating in, issuing or maintaining any
Letter of Credit, Swingline Loan or Protective Advance, or of purchasing or
accepting Bankers’ Acceptances or making or maintaining BA Equivalent Loans or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit,
Swingline Loans or Protective Advances held by, such Lender, or the Letters of
Credit issued by such Issuing Bank, to a level below that which such Lender or
such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or
such Issuing Bank’s holding company with respect to capital adequacy), then from
time to time the Borrowers will pay to such Lender or such Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for
any such reduction suffered.
(c) A certificate of a Lender or any Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or such Issuing Bank or its holding
company, as

 

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the case may be, as specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower Representative and shall be conclusive absent manifest
error. The Borrowers shall pay such Lender or such Issuing Bank, as the case may
be, the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or such Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies the Borrower Representative of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or such Issuing
Bank’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.
SECTION 2.16 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Eurocurrency Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under
Section 2.09(d) and is revoked in accordance therewith), or (d) the assignment
of any Eurocurrency Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower Representative
pursuant to Section 2.19, then, in any such event, the Borrowers shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurocurrency Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurocurrency market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower Representative and shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17 Taxes. (a) Any and all payments by or on account of any obligation
of any Loan Party hereunder or under any other Loan Document shall be made free
and clear of and without reduction or withholding for any Taxes; provided that
if any applicable law (as determined in the good faith discretion of an
applicable Withholding Agent (as defined below)) requires the deduction or
withholding of any Taxes from any such payment (including, for the avoidance of
doubt, any such deduction or withholding required to be made by the applicable
Loan Party, the Administrative Agent, the European Administrative Agent, the
Canadian

 

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Administrative Agent, any Collateral Agent or, in the case of any Lender that is
treated as a partnership for U.S. federal income tax purposes, by such Lender
for the account of any of its direct or indirect beneficial owners), the
applicable Loan Party, the Administrative Agent, the European Administrative
Agent, the Canadian Administrative Agent, the applicable Collateral Agent, the
Lender or the applicable direct or indirect beneficial owner of a Lender that is
treated as a partnership for U.S. federal income tax purposes (any such person a
“Withholding Agent”) shall make such deductions and timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax or Other Tax, then the sum payable by
the applicable Loan Party shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent, each Collateral Agent,
each Lender, any Issuing Bank or, in the case of any Lender that is treated as a
partnership or a disregarded entity for U.S. federal income tax purposes, its
direct or indirect beneficial owner, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made.
(b) The Loan Parties shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law. This paragraph
(b) shall not apply to the extent that the Other Taxes are compensated for by an
increased payment under Section 2.17(a).
(c) The Loan Parties shall jointly and severally indemnify the Administrative
Agent, the European Administrative Agent, the Canadian Administrative Agent,
each Collateral Agent, each Lender and each Issuing Bank, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid or payable by the Administrative Agent, the European Administrative Agent,
the Canadian Administrative Agent, such Collateral Agent, such Lender (or its
beneficial owner) or such Issuing Bank in connection with the Loans or any
amounts payable hereunder or under any other Loan Documents or otherwise with
respect to any Loan Document, as the case may be (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower Representative
by the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, a Collateral Agent, a Lender or an Issuing Bank (with a
copy to the Administrative Agent), as applicable, shall be conclusive absent
manifest error. This paragraph (c) shall not apply to the extent that the
Indemnified Taxes or Other Taxes are compensated for by an increased payment
under Section 2.17(a) or a payment or reimbursement under Section 2.17(b).
(d) Each Lender shall indemnify the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent or any Collateral Agent,
as applicable, within 10 days after demand therefor, for the full amount of any
Excluded Taxes attributable to such Lender that are payable or paid by the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent or any Collateral Agent, and reasonable expenses arising
therefrom or with respect thereto, whether or not such Excluded Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
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amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error.
(e) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by a Loan Party to a Governmental Authority, the Borrower Representative shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(f) Each US Fee Receiver hereby represents that it is a Permitted Fee Receiver
and agrees, to the extent legally entitled to do so, to update Internal Revenue
Service Form W-9 (or its successor form) or applicable Internal Revenue Service
Form W-8 (or its successor form) upon any change in such Person’s circumstances
or if such form expires or becomes inaccurate or obsolete, and to promptly
notify the Borrower Representative and the Administrative Agent if such Person
becomes legally ineligible to provide such form. In the case of a Lender that is
a domestic partnership or disregarded entity for U.S. federal income tax
purposes, this requirement shall also apply to its beneficial owners. As of the
Effective Date, no Loan Parties will withhold on any fees paid under this
Agreement.
(g) Any Foreign Lender that is entitled to an exemption from or reduction of any
applicable withholding tax with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower Representative (with a copy to the
Administrative Agent), at the time or times reasonably requested by the Borrower
Representative or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding of Tax. In
addition, any Lender, if requested by the Borrower Representative, the
Administrative Agent or the European Administrative Agent, the Canadian
Administrative Agent or any Collateral Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower Representative or the Administrative Agent as will enable the Borrower
Representative, the Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent or any Collateral Agent to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such forms shall not be
required if the Foreign Lender is not legally entitled to do so. Without
limiting the generality of the foregoing, in the case of the Company or any
other US Loan Party, any Foreign Lender to the Company or any other US Loan
Party shall, to the extent it is legally entitled to do so, deliver to the
Borrower Representative and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower Representative or the Administrative
Agent), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,

 

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(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit E to the effect that such Foreign 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 Company within the meaning of section
881(c)(3)(B) of the Code, (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code and (D) the interest payment in question is not
effectively connected with the United States trade or business conducted by such
Lender (a “U.S. Tax Compliance Certificate”) and (y) duly completed copies of
Internal Revenue Service Form W-8BEN,
(iv) to the extent a Foreign Lender is not the beneficial owner (for example,
where the Foreign Lender is a partnership or participating Lender granting a
typical participation), an Internal Revenue Service Form W-8IMY, accompanied by
a Form W-8ECI, W-8BEN, U.S. Tax Compliance Certificate, Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided
that, if the Foreign Lender is a partnership (and not a participating Lender)
and one or more beneficial owners of such Foreign Lender are claiming the
portfolio interest exemption, such Foreign Lender may provide a U.S. Tax
Compliance Certificate on behalf of each such beneficial owner, or
(v) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower Representative to determine the
withholding or deduction required to be made.
In addition, if a payment made to a Lender under any Loan Document would be
subject to U.S. Federal withholding Tax imposed by FATCA if such Lender fails to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Withholding Agent (A) a certification signed by the chief
financial officer, principal accounting officer, treasurer or controller and
(B) other documentation reasonably requested by the Withholding Agent sufficient
for the Withholding Agent to comply with its obligations under FATCA and to
determine that such Lender has complied with such applicable reporting
requirements.
Each Lender agrees that if any form or certification previously delivered by it
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower Representative and the
Administrative Agent in writing of its legal inability to do so.
(h) If the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent, any Lender or any Issuing Bank
determines, in its sole discretion, that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified pursuant to
this Section 2.17 (including additional amounts paid by any Loan Party pursuant
to this Section), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this

 

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Section with respect to the Indemnified Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses (including any Taxes) of the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, such Collateral Agent, such Lender or such Issuing Bank,
as the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided that such
indemnifying party, upon the request of the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent, such Collateral Agent,
such Lender or such Issuing Bank, agrees to repay the amount paid over pursuant
to this Section 2.17(h) (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent, the
European Administrative Agent, the Canadian Administrative Agent, such
Collateral Agent, such Lender or such Issuing Bank in the event the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, such Collateral Agent, such Lender or such Issuing Bank is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (h), in no event will any Issuing
Bank or Lender be required to pay any amount to any Loan Party the payment of
which would place the Issuing Bank or such Lender in a less favorable net
after-Tax position than the Issuing Bank or such Lender would have been in if
the indemnification payments or additional amounts giving rise to such refund
had never been paid. This paragraph shall not be construed to require the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent, any Lender or any Issuing Bank to
make available its Tax returns (or any other information relating to its Taxes
which it deems confidential) to the Borrowers or any other Person nor shall it
be construed to require the Administrative Agent, the European Administrative
Agent, the Canadian Administrative Agent, any Collateral Agent, any Lender or
any Issuing Bank, as the case may be, to apply for or otherwise initiate any
refund contemplated in this Section 2.17.
(i) All amounts set out, or expressed to be payable under any Loan Document by
any party to the Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent, any Collateral Agent, any Lender or any Issuing
Bank which (in whole or in part) constitute the consideration for a supply for
VAT purposes shall be deemed to be exclusive of any VAT which is chargeable in
connection therewith. If, in connection with this Agreement, VAT is chargeable
to, or in respect of any payment made by any Loan Party to, the Administrative
Agent, the European Administrative Agent, the Canadian Administrative Agent, any
Collateral Agent, any Lender or any Issuing Bank, such Loan Party shall promptly
pay to the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, such Collateral Agent, such Lender or such Issuing Bank,
as the case may be, an amount equal to the amount of such VAT (and the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, such Collateral Agent, such Lender or such Issuing Bank,
as the case may be, shall promptly provide an appropriate VAT invoice to such
party).
(j) For the avoidance of doubt and without duplication, where any party is
required under any Loan Document to reimburse the Administrative Agent, the
European Administrative Agent, the Canadian Administrative Agent, any Collateral
Agent, any Lender or any Issuing Bank, as the case may be, for any costs or
expenses, that party shall also at the same time pay and indemnify each such
Administrative Agent, European Administrative Agent, the Canadian Administrative
Agent, Collateral Agent, any Lender or any Issuing Bank, as the case may be,
against all VAT and any stamp duty, registration or other similar tax payables,
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case incurred in connection with the entry into, performance or enforcement of
any Loan Document.
(k) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs.
(a) The Borrowers shall make each payment required to be made by them hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00
p.m., Local Time, on the date when due, in immediately available funds, without
set-off or counterclaim. Except as otherwise expressly set forth herein, all
payments of Loans shall be paid in the currency in which such Loans were made
and shall be made for the account of the relevant Lenders pro rata in accordance
with the respective unpaid principal amounts of the Loans made to the applicable
Borrower held by them. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, the European Administrative Agent or
the Canadian Administrative Agent, as applicable, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to (i) with respect to
payments of Facility A Loans, LC Disbursements of any Issuing Bank in respect of
Facility A Letters of Credit, fronting fees payable to any Issuing Bank in
respect of Facility A Letters of Credit, fees payable pursuant to
Section 2.12(a), participation fees in respect of Facility A Letters of Credit
payable pursuant to Section 2.12(b), and fees payable pursuant to
Section 2.12(c), the Administrative Agent at its offices at 10 South Dearborn,
22nd Floor, Chicago, Illinois 60603 USA, (ii) with respect to payments of
Canadian Loans, LC Disbursements of any Issuing Bank in respect of Canadian
Letters of Credit, fronting fees payable to any Issuing Bank in respect of
Canadian Letters of Credit, the Canadian Administrative Agent at its offices at
200 Bay Street, Royal Bank Plaza, Floor 18, Toronto M57 2J2 Canada and (iii) for
payments of Facility B Loans other than Canadian Loans, LC Disbursements of any
Issuing Bank in respect of Facility B Letters of Credit other than Canadian
Letters of Credit, fronting fees payable to any Issuing Bank in respect of
Facility B Letters of Credit other than Canadian Letters of Credit, the European
Administrative Agent at its offices at 125 London Wall, London EC2Y 5AJ, United
Kingdom, except payments to be made directly to an Issuing Bank or a Swingline
Lender as expressly provided herein and except that payments pursuant to
Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto. Each of the Administrative Agent, the European Administrative
Agent and the Canadian Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient,
in like funds, promptly following receipt thereof. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments hereunder shall be made in dollars, except that all
payments in respect of Loans (and interest thereon) and LC Exposures shall be
made in the same currency in which such Loan was made or Letter of Credit
issued. During any Full Cash Dominion Period, solely for purposes of determining
the amount of Loans available for borrowing purposes, checks (in addition to
immediately available funds applied pursuant to Section 2.10(b)) from
collections of items of payment and proceeds of any Collateral shall be applied
in whole or in part against the applicable Obligations as of 10:00 a.m., Local
Time, on the Business Day of receipt, subject to actual collection.

 

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(b) Any proceeds of Collateral of any Loan Party received by the Administrative
Agent or any Collateral Agent (i) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct or (ii) at any other time, not constituting (A) a specific payment of
principal, interest, fees or other sum payable under the Loan Documents (which
shall be applied as specified by the Borrowers), (B) a mandatory prepayment
(which shall be applied in accordance with Section 2.11) or (C) amounts to be
applied from the Collection Account (which shall be applied in accordance with
Section 2.10(b)), shall be applied, subject to the Intercreditor Agreement,
ratably first, to pay any fees, indemnities, or expense reimbursements including
amounts then due to the Administrative Agent, the European Administrative Agent,
the Canadian Administrative Agent, any Collateral Agent and any Issuing Bank
from, or guaranteed by, such Loan Party under the Loan Documents (other than in
connection with Banking Services Obligations, Acceptance Obligations, Swap
Obligations or Synthetic Lease Obligations), second, to pay any fees or expense
reimbursements then due to the Lenders from, or guaranteed by, such Loan Party
under the Loan Documents (other than in connection with Banking Services,
Acceptance Obligations, Swap Obligations or Synthetic Lease Obligations), third,
to pay interest due in respect of the Protective Advances owing by or guaranteed
by such Loan Party, ratably, fourth, to pay the principal of the Protective
Advances owing by or guaranteed by such Loan Party, ratably, fifth, to pay
interest then due and payable on the Loans (other than the Protective Advances)
and unreimbursed LC Disbursements, in each case owing or guaranteed by such Loan
Party, ratably, sixth, to prepay principal on the Loans (other than the
Protective Advances) and unreimbursed LC Disbursements owing or guaranteed by
such Loan Party, ratably, seventh, to pay an amount to the US Collateral Agent
equal to 103% of the aggregate undrawn face amount of all outstanding Letters of
Credit issued on behalf of, or guaranteed by, such Loan Party, to be held as
cash collateral for such Obligations, eighth, to the payment of any amounts
owing with respect to Reported Banking Services Obligations, Reported Acceptance
Obligations and Reported Secured Swap Obligations owing or guaranteed by such
Loan Party, ratably, ninth, to the payment of any amounts owing with respect to
Banking Services Obligations (other than Reported Banking Services Obligations),
Acceptance Obligations (other than Reported Acceptance Obligations) and Secured
Swap Obligations (other than Reported Secured Swap Obligations) owing or
guaranteed by such Loan Party, ratably, tenth, to the payment of any other
Secured Obligations (other than Synthetic Lease Obligations) due to the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent or any Lender by, or guaranteed by,
such Loan Party, ratably, and eleventh, any balance remaining after the Secured
Obligations shall have been paid in full and no Letters of Credit shall be
outstanding (other than Letters of Credit which have been cash collateralized in
accordance with the foregoing) shall be paid over to the applicable Loan Party
at its Funding Account. Notwithstanding anything to the contrary contained in
this Agreement, unless so directed by the Borrower Representative, or unless a
Default is in existence, none of the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent, the Collateral Agents
nor any Lender shall apply any payment which it receives from Collateral
Proceeds to any Eurocurrency Loan of a Class, except (a) on the expiration date
of the Interest Period applicable to any such Eurocurrency Loan or (b) in the
event, and only to the extent, that there are no outstanding ABR Loans,
Overnight LIBO Loans or Canadian Prime Rate Loans of the same Class and, in any
such event, the Borrowers shall pay the break funding payment required in
accordance with Section 2.16. Each of the Administrative Agent, the European
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and the Lenders shall have the continuing and exclusive right to apply and
reverse and reapply any and all such proceeds and payments to any portion of the
Secured Obligations to maximize realization of the Collateral (it being
understood that, notwithstanding the foregoing, in no event shall payments be
made pursuant to levels “eighth”, “ninth” or “tenth” above prior to the payment
in full of all obligations described in levels “first” through “seventh” above).
Notwithstanding the foregoing, any such application of proceeds from Collateral
of the European Loan Parties and the Canadian Loan Parties shall be made solely
in respect of Obligations of the European Loan Parties and the Canadian Loan
Parties.
(c) At the election of the Administrative Agent, the European Administrative
Agent or the Canadian Administrative Agent, as the case may be, all payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for fees and expenses pursuant
to Section 9.03), and other sums payable by any Borrower under the Loan
Documents, may be paid from the proceeds of Borrowings made by such Borrower
hereunder whether made following a request by the Borrower Representative
pursuant to Section 2.03 or a deemed request as provided in this Section or may
be deducted from any deposit account of such Borrower maintained with the
Administrative Agent, the European Administrative Agent or the Canadian
Administrative Agent. Each Borrower hereby irrevocably authorizes (i) the
Administrative Agent, the European Administrative Agent or the Canadian
Administrative Agent, as applicable, to make a Borrowing for the purpose of
paying each payment of principal, interest and fees owing by such Borrower as it
becomes due hereunder or any other amount due from such Borrower under the Loan
Documents and agrees that all such amounts charged shall constitute Loans
(including Swingline Loans, but such a Borrowing may only constitute a
Protective Advance if it is to reimburse costs, fees and expenses as described
in Section 9.03) and that all such Borrowings shall be deemed to have been
requested pursuant to Sections 2.03, 2.04 or 2.05, as applicable and (ii) the
Administrative Agent, the European Administrative Agent or the Canadian
Administrative Agent, as applicable, to charge any deposit account of such
Borrower maintained with such Agent for each payment of principal, interest and
fees owing by such Borrower as it becomes due hereunder or any other amount due
from such Borrower under the Loan Documents.
(d) If any Lender shall, by exercising any right of set-off or counterclaim, as
a result of Section 2.18(b) or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrowers pursuant to and in accordance with the express terms of this
Agreement (other than Section 2.18(b)) or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
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Disbursements to any assignee or participant, other than to the Borrowers or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.
(e) Unless the Administrative Agent shall have received notice from the Borrower
Representative prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or an Issuing Bank hereunder
that the Borrowers will not make such payment, the Administrative Agent, the
European Administrative Agent or the Canadian Administrative Agent, as
applicable, may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the applicable Issuing Bank, as the case may be, the amount due. In
such event, if the Borrowers have not in fact made such payment, then each of
the Lenders or the applicable Issuing Bank, as the case may be, severally agrees
to repay to the Administrative Agent, the European Administrative Agent and the
Canadian Administrative Agent, if applicable, forthwith on demand the amount so
distributed to such Lender or such Issuing Bank with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, the European
Administrative Agent or the Canadian Administrative Agent, if applicable, at a
rate determined by the relevant Administrative Agent in accordance with banking
industry rules on interbank compensation or, in the case of amounts due in
dollars, the Federal Funds Effective Rate if greater.
(f) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent and, if applicable, the European
Administrative Agent and/or the Canadian Administrative Agent, may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by it for the account of such Lender to satisfy such
Lender’s obligations hereunder until all such unsatisfied obligations are fully
paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders. If any Lender
requests compensation under Section 2.15, or if the Borrowers are required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, or if any Lender is otherwise a
Departing Lender (as defined below), then:
(a) such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be,
in the future, (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender (and the
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment) and (iii) would
not breach any applicable law;

 

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(b) the Borrowers may, at their sole expense and effort, require such Lender or
any Defaulting Lender (each herein, a “Departing Lender”), upon notice to the
Departing Lender and the Administrative Agent, to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee specified by the Borrowers that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) the Borrowers shall have received the prior written consent of the
Administrative Agent (and if a Commitment is being assigned, the Issuing Banks),
which consent shall not unreasonably be withheld or delayed, (ii) the Departing
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements, Swingline Loans
and Protective Advances, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts), (iii) any processing and recordation fee owing
pursuant to Section 9.04(c)(iv) in connection with such assignment shall be paid
by the applicable Borrower and (iv) in the case of any such assignment resulting
from a claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Departing Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
SECTION 2.20 Returned Payments. If after receipt of any payment which is applied
to the payment of all or any part of the Obligations, the Administrative Agent,
the European Administrative Agent, the Canadian Administrative Agent, any
Collateral Agent, any Issuing Bank or any Lender is for any reason compelled to
surrender such payment or proceeds to any Person because such payment or
application of proceeds is invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, impermissible setoff, or a
diversion of trust funds, or for any other reason, then the Obligations or part
thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent, the European Administrative Agent,
the Canadian Administrative Agent, such Collateral Agent, such Issuing Bank or
such Lender. The provisions of this Section 2.20 shall be and remain effective
notwithstanding any contrary action which may have been taken by the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent, any Issuing Bank or any Lender in
reliance upon such payment or application of proceeds. The provisions of this
Section 2.20 shall survive the termination of this Agreement.
SECTION 2.21 Bankers’ Acceptances. (a) The Canadian Borrower may issue Bankers’
Acceptances denominated in Canadian Dollars for acceptance and purchase by the
Facility B Lenders in accordance with the provisions of Section 2.01,
Section 2.03 and this Section 2.21.
(b) Term. Each Bankers’ Acceptance shall have a Contract Period of approximately
thirty days, sixty days, ninety days or one hundred and eighty days or (with the
consent of each affected Lender) two hundred and seventy days or three hundred
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days, subject to availability. No Contract Period shall extend beyond the
Maturity Date. If such Contract Period would otherwise end on a day that is not
a Business Day, such Contract Period shall end on the next preceding day that is
a Business Day.
(c) Discount Rate. On each Borrowing date on which Bankers’ Acceptances are to
be accepted, the Canadian Administrative Agent shall advise the Canadian
Borrower as to the Canadian Administrative Agent’s determination of the
applicable Discount Rate for the Bankers’ Acceptances which any of the Facility
B Lenders have agreed to purchase.
(d) Purchase. Each Facility B Lender agrees to purchase a Bankers’ Acceptance
accepted by it. The Canadian Borrower shall sell, and such Facility B Lender
shall purchase, the Bankers’ Acceptance at the applicable Discount Rate. Such
Facility B Lender shall provide to the Canadian Funding Office the Discount
Proceeds less the Acceptance Fee payable by the Canadian Borrower with respect
to such Bankers’ Acceptance. Such proceeds will then be made available to the
Canadian Borrower by the Canadian Administrative Agent crediting an account as
directed by the Canadian Borrower with the aggregate of the amounts made
available to the Canadian Administrative Agent by such Facility B Lenders and in
like funds as received by the Canadian Administrative Agent.
(e) Sale. Each Facility B Lender may from time to time hold, sell, rediscount or
otherwise dispose of any or all Bankers’ Acceptances accepted and purchased by
it.
(f) Power of Attorney for the Execution of Bankers’ Acceptances. To facilitate
borrowings under the Facility B Commitments by way of B/As, the Canadian
Borrower hereby appoints each Facility B Lender as its attorney to sign and
endorse on its behalf, in handwriting or by facsimile or mechanical signature as
and when deemed necessary by such Facility B Lender, blank forms of B/As. In
this respect, it is each Facility B Lender’s responsibility to maintain an
adequate supply of blank forms of B/As for acceptance under this Agreement. The
Canadian Borrower recognizes and agrees that all B/As required to be accepted
and purchased by any Facility B Lender and which are signed and/or endorsed on
its behalf by a Facility B Lender shall bind the Canadian Borrower as fully and
effectually as if signed in the handwriting of and duly issued by the proper
signing officers of the Canadian Borrower. Each Facility B Lender is hereby
authorized to issue such B/As endorsed in blank in such face amounts as may be
determined by such Facility B Lender; provided that the aggregate amount thereof
is equal to the aggregate amount of B/As required to be accepted and purchased
by such Facility B Lender. No Facility B Lender shall be liable for any damage,
loss or other claim arising by reason of any loss or improper use of any such
instrument except the gross negligence or willful misconduct of such Facility B
Lender or its officers, employees, agents or representatives. On request by the
Canadian Borrower, a Facility B Lender shall cancel all forms of B/As which have
been pre-signed or pre-endorsed by or on behalf of the Canadian Borrower and
which are held by such Facility B Lender and have not yet been issued in
accordance herewith. Each Facility B Lender shall maintain a record with respect
to B/As held by it in blank hereunder, voided by it for any reason, accepted and
purchased by it hereunder, and cancelled at their respective maturities. Each
Facility B Lender agrees to provide such records to the Canadian Borrower at the
Canadian Borrower’s expense upon request.

 

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(g) Execution. Drafts drawn by the Canadian Borrower to be accepted as Bankers’
Acceptances shall be signed by a duly authorized officer or officers of the
Canadian Borrower or the Borrower Representative or by their respective
attorneys including attorneys appointed pursuant to Section 2.21(f) above.
Notwithstanding that any Person whose signature appears on any Bankers’
Acceptance may no longer be an authorized signatory for the Canadian Borrower or
Borrower Representative, as applicable, at the time of issuance of a Bankers’
Acceptance, that signature shall nevertheless be valid and sufficient for all
purposes as if the authority had remained in force at the time of issuance and
any Bankers’ Acceptance so signed shall be binding on the Canadian Borrower.
(h) Issuance. The Canadian Administrative Agent, promptly following receipt of a
notice of borrowing, continuation or conversion by way of Bankers’ Acceptances,
shall advise the applicable Facility B Lenders of the notice and shall advise
each such Facility B Lender of the face amount of Bankers’ Acceptances to be
accepted by it and the applicable Contract Period (which shall be identical for
all Facility B Lenders). The aggregate face amount of Bankers’ Acceptances to be
accepted by a Facility B Lender shall be determined by the Administrative Agent
by reference to such Facility B Lender’s Applicable Percentage of the issue of
Bankers’ Acceptances, except that, if the face amount of a Bankers’ Acceptance
which would otherwise be accepted by a Facility B Lender would not be C$100,000,
or a whole multiple thereof, the face amount shall be increased or reduced by
the Canadian Administrative Agent in its sole discretion to C$100,000, or the
nearest whole multiple of that amount, as appropriate; provided that after such
issuance, the Borrowers shall be in compliance with the Revolving Exposure
Limitations.
(i) Waiver of Presentment and Other Conditions. The Canadian Borrower waives
presentment for payment and any other defense to payment of any amounts due to a
Facility B Lender in respect of a Bankers’ Acceptance accepted and purchased by
it pursuant to this Agreement which might exist solely by reason of the Bankers’
Acceptance being held, at the maturity thereof, by such Facility B Lender in its
own right and the Canadian Borrower agrees not to claim any days of grace if
such Facility B Lender as holder sues the Canadian Borrower on the Bankers’
Acceptance for payment of the amount payable by the Canadian Borrower
thereunder. On the specified maturity date of a B/A, or the date of any
prepayment thereof in accordance with this Agreement, if earlier, the Canadian
Borrower shall pay to such Facility B Lender that has accepted such B/A the full
face amount of such B/A (or shall make provision for payment by way of
conversion or continuation in accordance with Section 2.08) in full and absolute
satisfaction of its obligations with respect to such B/A, and after such
payment, the Canadian Borrower shall have no further liability in respect of
such B/A (except to the extent that any such payment is rescinded or reclaimed
by operation of law or otherwise) and such Facility B Lender shall be entitled
to all benefits of, and will make and otherwise be responsible for all payments
due to the redeeming holder or any third parties under, such B/A.
(j) BA Equivalent Loans by Non BA Lenders. Whenever the Canadian Borrower
requests a borrowing by way of Bankers’ Acceptances, each Non BA Lender shall,
in lieu of accepting and purchasing any B/As, make a Loan (a “BA Equivalent
Loan”) to the Canadian Borrower in the amount and for the same term as each
Draft which such Lender would otherwise have been required to accept and
purchase hereunder. Each such Lender will provide to the Canadian Administrative
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Loan for the account of the Canadian Borrower in the same manner as such Lender
would have provided the Discount Proceeds in respect of the Draft which such
Lender would otherwise have been required to accept and purchase hereunder. Each
such BA Equivalent Loan will bear interest at the same rate that would result if
such Lender had accepted (and been paid an acceptance fee) and purchased (on a
discounted basis) a B/A for the relevant Contract Period (it being the intention
of the parties that each such BA Equivalent Loan shall have the same economic
consequences for the relevant Lenders and the Canadian Borrower as the B/A that
such BA Equivalent Loan replaces). All such interest shall be paid in advance on
the date such BA Equivalent Loan is made, and will be deducted from the
principal amount of such BA Equivalent Loan in the same manner in which the
discounted portion of a B/A would be deducted from the face amount of the B/A.
Subject to the repayment requirements of this Agreement, on the last day of the
relevant Contract Period for such BA Equivalent Loan, the Canadian Borrower
shall be entitled to convert each such BA Equivalent Loan into another type of
Loan, or to roll over each such BA Equivalent Loan into another BA Equivalent
Loan, all in accordance with the applicable provisions of this Agreement. Each
Non BA Lender may, at its discretion, request in writing to the Canadian
Administrative Agent and the Canadian Borrower that BA Equivalent Loans made by
it shall be evidenced by Discount Notes.
(k) Terms Applicable to BA Equivalent Loans. For greater certainty, all
provisions of this Agreement that are applicable to B/As shall also be
applicable, mutatis mutandis, to BA Equivalent Loans, and notwithstanding any
other provision of this Agreement, all references to principal amounts or any
repayment or prepayment of any Loans that are applicable to B/As or BA Drawings
shall be deemed to refer to the full face amount thereof in the case of B/As and
to the principal amount of any portion thereof consisting of BA Equivalent
Loans. As set out in the definition of “Bankers’ Acceptances”, that term
includes Discount Notes and all terms of this Agreement applicable to Bankers’
Acceptances (including the provisions of Section 2.21(f) relating to their
execution by the Facility B Lenders under power of attorney) shall apply equally
to Discount Notes evidencing BA Equivalent Loans with such changes as may in the
context be necessary. For greater certainty:
(i) the term of a Discount Note shall be the same as the Contract Period for
Bankers’ Acceptances accepted and purchased on the same Borrowing date in
respect of the same borrowing;
(ii) an acceptance fee will be payable in respect of a Discount Note and shall
be calculated at the same rate and in the same manner as the Acceptance Fee in
respect of a Bankers’ Acceptance; and
(iii) the Discount Rate applicable to a Discount Note shall be the Discount Rate
applicable to Bankers’ Acceptances accepted by a Facility B Lender that is not a
Schedule I Lender in accordance with the definition of “Discount Rate” on the
same Borrowing date or date of continuation or conversion, as the case may be,
in respect of the same borrowing for the relevant Contract Period.
(l) Depository Bills and Notes Act. At the option of the Canadian Borrower and
any Facility B Lender, Bankers’ Acceptances under this Agreement to be accepted
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Facility B Lender may be issued in the form of depository bills for deposit with
The Canadian Depository for Securities Limited pursuant to the Depository Bills
and Notes Act (Canada). All depository bills so issued shall be governed by the
provisions of this Section 2.21.
(m) Acceptance Fees. Upon acceptance of a Bankers’ Acceptance by a Facility B
Lender, the Canadian Borrower shall pay to the Canadian Administrative Agent on
behalf of such Facility B Lender a fee (the “Acceptance Fee”) payable in
Canadian Dollars, calculated on the face amount of the Bankers’ Acceptance at a
rate per annum equal to the Applicable Spread on the basis of the number of days
in the Contract Period for such Bankers’ Acceptance. Any adjustment to the
Acceptance Fee (including any adjustment as necessary to reflect the operation
of Section 2.13(e)) shall be computed based on the number of days remaining in
the Contract Period of such Bankers’ Acceptances from and including the
effective date of any change in the Applicable Spread. Any increase in such
Acceptance Fee shall be paid by the Canadian Borrower to the Canadian
Administrative Agent on behalf of the Facility B Lenders on the last day of the
Contract Period of the relevant Bankers’ Acceptance. Any decrease in such
Acceptance Fee shall be paid by each Facility B Lender to the Canadian Borrower,
through the Canadian Administrative Agent, on the last day of the Contract
Period of the relevant Bankers’ Acceptance.
SECTION 2.22 Circumstances Making Bankers’ Acceptances Unavailable. (a) If prior
to the commencement of any Contract Period, (A) the Canadian Administrative
Agent determines in good faith, which determination shall be conclusive and
binding on the Canadian Borrower, and notifies the Canadian Borrower that, by
reason of circumstances affecting the money market, there is no readily
available market for Bankers’ Acceptances, or (B) the Canadian Administrative
Agent determines (which determination shall be conclusive absent manifest error)
that adequate and reasonable means do not exist for ascertaining the Discount
Rate or CDOR Rate, as applicable, for such Contract Period; or (C) the Canadian
Administrative Agent is advised by the Required Facility B Lenders that the
Discount Rate or CDOR Rate, as applicable, for such Contract Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their portion of such BA Drawings included in such Borrowing for such Contract
Period then:
(i) the right of the Canadian Borrower to request a borrowing by way of BA
Drawing shall be suspended until the Canadian Administrative Agent determines
that the circumstances causing such suspension no longer exist and the Canadian
Administrative Agent so notifies the Canadian Borrower; and
(ii) any notice relating to a borrowing by way of BA Drawing which is
outstanding at such time shall be deemed to be a notice requesting a borrowing
by way of Canadian Prime Rate Loans (all as if it were a notice given pursuant
to Section 2.03).
(b) The Administrative Agent shall promptly notify the Canadian Borrower and the
Facility B Lenders of the suspension in accordance with Section 2.22(a) of the
Canadian Borrower’s right to request a borrowing by way of BA Drawing and of the
termination of such suspension.

 

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SECTION 2.23 Defaulting Lenders. Notwithstanding any provision of this Agreement
to the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.12(a);
(b) the Commitment and Revolving Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders or the Required Lenders have taken
or may take any action hereunder (including any consent to any amendment or
waiver pursuant to Section 9.02); provided that (x) any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender and (y) for the avoidance of
doubt, the Commitment of any Defaulting Lender cannot be increased without such
Defaulting Lender’s consent;
(c) if any Swingline Exposure, PA Exposure or LC Exposure exists at the time a
Lender becomes a Specified Defaulting Lender then:
(i) all or any part of such Swingline Exposure, PA Exposure and LC Exposure
shall be reallocated among the non-Specified Defaulting Lenders in accordance
with their respective Applicable Percentages but only to the extent (x) the sum
of all non-Specified Defaulting Lenders’ Credit Exposures plus, without
duplication, such Specified Defaulting Lender’s PA Exposure, Swingline Exposure
and LC Exposure, does not exceed the total of all non-Specified Defaulting
Lenders’ Commitments and (y) the conditions set forth in Section 2.01 are
satisfied at such time; and
(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrowers shall within one Business Day following
notice by the applicable Administrative Agent (x) first, prepay such PA Exposure
and Swingline Exposure and (y) second, cash collateralize such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in
Section 2.06(j) for so long as such LC Exposure is outstanding;
(iii) if the Borrowers cash collateralize any portion of such Specified
Defaulting Lender’s LC Exposure pursuant to this Section 2.23(c), no Borrower
shall be required to pay any fees to such Specified Defaulting Lender pursuant
to Section 2.12(b) with respect to such Specified Defaulting Lender’s LC
Exposure during the period such Specified Defaulting Lender’s LC Exposure is
cash collateralized; or
(iv) if the LC Exposure of the non-Specified Defaulting Lenders is reallocated
pursuant to Section 2.23(c), then the fees payable to the Lenders pursuant to
Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
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The Administrative Agent, Canadian Administrative Agent or European
Administrative Agent, as applicable, shall promptly notify the Lenders of any
reallocation described in this Section 2.23(c).
(d) so long as any Lender is a Defaulting Lender, no Swingline Lender shall be
required to fund any Swingline Loan and no Issuing Bank shall be required to
issue, amend or increase any Letter of Credit, unless it is satisfied that the
related exposure will be 100% covered by the Commitments of the non-Defaulting
Lenders and/or cash collateral will be provided by the Borrower in accordance
with Section 2.23(c), and participating interests in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.23(c)(i) (and
Defaulting Lenders shall not participate therein); and
(e) any amount payable to such Defaulting Lender hereunder (whether on account
of principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 2.18(d) but
excluding Section 2.19(b)) shall, in lieu of being distributed to such
Defaulting Lender, be retained by the Administrative Agent in a segregated
account and, subject to any applicable requirements of law, be applied at such
time or times as may be determined by the Administrative Agent (i) first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent, the European Administrative Agent, the Canadian Administrative Agent or
any Collateral Agent hereunder, (ii) second, pro rata, to the payment of any
amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender
hereunder, (iii) third, if so determined by the Administrative Agent or
requested by an Issuing Bank or Swingline Lender, held in such account as cash
collateral for future funding obligations of the Defaulting Lender in respect of
any existing or future participating interest in any Swingline Loan, Letter of
Credit or Protective Advance, (iv) fourth, to the funding of any Loan in respect
of which such Defaulting Lender has failed to fund its portion thereof as
required by this Agreement, as determined by the Administrative Agent,
(v) fifth, if so determined by the Administrative Agent and the Borrowers, held
in such account as cash collateral for future funding obligations of the
Defaulting Lender in respect of any Loans under this Agreement, (vi) sixth, to
the payment of any amounts owing to the Lenders or any Issuing Bank or Swingline
Lender as a result of any judgment of a court of competent jurisdiction obtained
by any Lender or such Issuing Bank or Swingline Lender against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement, (vii) seventh, to the payment of any amounts owing to any
Borrower as a result of any judgment of a court of competent jurisdiction
obtained by such Borrower against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement, and
(viii) eighth, to such Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that if such payment is (x) a prepayment of the
principal amount of any Loans or reimbursement obligations in respect of LC
Disbursements which a Defaulting Lender has funded its participation obligations
and (y) made at a time when the conditions set forth in Section 4.02 are
satisfied, such payment shall be applied solely to prepay the Loans of, and
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obligations owed to, all non-Defaulting Lenders pro rata prior to being applied
to the prepayment of any Loans, or reimbursement obligations owed to, any
Defaulting Lender.
(f) In the event that the Administrative Agent (or, in the case of any Facility
B Lender, the Canadian Administrative Agent and the European Administrative
Agent), the applicable Borrower(s), the applicable Issuing Bank(s) and the
applicable Swingline Lender(s) each agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure, LC Exposure and PA Exposure of the Lenders
shall be readjusted to reflect the inclusion of such Lender’s Commitments and on
such date such Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) as the Administrative shall determine may
be necessary in order for such Lender to hold such Loans in accordance with its
Applicable Percentage.
ARTICLE III
Representations and Warranties
Each Loan Party represents and warrants to the Lenders that:
SECTION 3.01 Organization; Powers. Each of the Loan Parties and each of its
Subsidiaries is duly organized or incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02 Authorization; Enforceability. (a) The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
The Loan Documents to which each Loan Party is a party have been duly executed
and delivered by such Loan Party and constitute a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, examination, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
(b) The choice of governing law provisions contained in this Agreement and each
other Loan Document to which any Loan Party is a party are enforceable in the
jurisdictions where such Loan Party is organized or incorporated or any
Collateral of such Loan Party is located. Any judgment obtained in connection
with any Loan Document in the jurisdiction of the governing law of such Loan
Document will be recognized and be enforceable in the jurisdictions where such
Loan Party is organized or any Collateral is located.
(c) Subject to applicable Insolvency Laws and applicable principles of public
policy, no Foreign Loan Party, nor any of its property or assets has any
immunity from jurisdiction of any court or from any legal process (whether
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prior to judgment, attachment in aid of execution, execution or otherwise) under
the laws of the jurisdiction in which such Foreign Loan Party is organized in
respect of its obligations under the Loan Documents to which it or its property
or assets is subject.
(d) The Loan Documents to which each Foreign Loan Party is a party are in proper
legal form under the laws of the jurisdiction in which each such Foreign Loan
Party is organized or incorporated and existing (i) for the enforcement thereof
against each such Foreign Loan Party under the laws of each such jurisdiction
and (ii) in order to ensure the legality, validity, enforceability, priority or
admissibility in evidence of such Loan Documents (provided that, with respect
such enforcement or admissibility, such documents may have to be translated into
the official language of the relevant jurisdiction which may be done at the time
of enforcement or admission, as applicable). It is not necessary to ensure the
legality, validity, enforceability, priority or admissibility in evidence of the
Loan Documents to which any Foreign Loan Party is a party that any such Loan
Documents be filed, registered or recorded with, or executed or notarized
before, any court or other authority in the jurisdiction in which any such
Foreign Loan Party is organized or that any registration charge or stamp or
similar tax be paid on or in respect of the applicable Loan Documents or any
other document, except for any such filing, registration, recording, execution
or notarization that is referred to in Section 3.16 or is not required to be
made until enforcement of the applicable Loan Document.
SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c)
except as could not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect, will not violate or result in a default
under any indenture, agreement or other instrument binding upon any Loan Party
or any of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by any Loan Party or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien, or require the
sharing of any Lien, on any asset of any Loan Party or any of its Subsidiaries,
except as provided in the Collateral Documents.
SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The Company
has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows as of and for the
fiscal years ended January 3, 2009 and January 2, 2010, reported on by Deloitte
& Touche LLP, a registered public accounting firm. Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP. Neither the Company nor
any of its consolidated Subsidiaries has any material Guarantee obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
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(b) Except for the Disclosed Matters, since January 2, 2010, there has been no
development, event, or circumstance that has had, or could reasonably be
expected to have, a Material Adverse Effect.
SECTION 3.05 Properties. (a) As of the date of this Agreement, Schedule 3.05
sets forth the address of each parcel of real property that is owned or leased
by each Group Member. Each of such leases and subleases is valid and enforceable
in accordance with its terms and is in full force and effect, and no material
default by any party to any such lease or sublease exists, except, in the case
of any such sublease, where such default or such failure to be valid and
enforceable could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Each of the Loan Parties and its Subsidiaries
has good and indefeasible (or in the Province of Ontario, Canada, marketable and
insurable) title to, or valid leasehold interests in, all its real and personal
property, free of all Liens other than Permitted Liens and the Permitted Second
Priority Lien, except where failure would not reasonably be expected to have a
Material Adverse Effect.
(b) Each Loan Party and its Subsidiaries owns, or is licensed to use, all
material Intellectual Property that is necessary to its business as currently
conducted and the use thereof by the Loan Parties and its Subsidiaries does not
infringe in any material respect upon the rights of any other Person, and the
Loan Parties’ rights thereto are not subject to any licensing agreement or
similar arrangement other than licenses in the ordinary course of business.
SECTION 3.06 Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of any Loan Party, threatened against or
affecting the Loan Parties or any of their Subsidiaries (i) that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement or the Transactions.
(b) Except for the Disclosed Matters (i) no Loan Party nor any of its
Subsidiaries has received notice of any claim with respect to any material
Environmental Liability or knows of any basis for it to have or be affected by
any material Environmental Liability and (ii) except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, no Loan Party nor any of its
Subsidiaries (1) has failed to comply with any applicable Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law or (2) has become subject to any
Environmental Liability.
(c) Since the Effective Date, there has been no change in the status of the
Disclosed Matters that, individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07 Compliance with Laws and Agreements. Each Loan Party and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

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SECTION 3.08 Investment Company Status. No Loan Party nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940 or shall register as, conduct its
business or take any action which shall cause it to be registered for the
purposes of the European Communities (Markets in Financial Instruments)
Regulations 2007.
SECTION 3.09 Taxes. Each Loan Party and its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
Taxes that are being contested in good faith by appropriate proceedings and for
which such Loan Party or such Subsidiary, as applicable, has set aside on its
books adequate reserves. No tax liens have been filed and no claims are being
asserted with respect to any such taxes. Each Borrower is resident for Tax
purposes only in the jurisdiction of its establishment or incorporation as the
case may be. Each Loan Party and its Subsidiaries has withheld all employee
withholdings and has made all employer contributions to be withheld and made by
it pursuant to applicable law on account of the Canada and Quebec pension plans,
employment insurance and employee income taxes. Each Loan Party and its
Subsidiaries has, where applicable, properly operated the PAYE System and has
duly made all deductions and payments required to be made in respect of national
insurance contributions pursuant to UK Law.
SECTION 3.10 ERISA; Benefit Plans. (a) Except as could not reasonably be
expected to result, individually or in the aggregate, in a Material Adverse
Effect: (i) no ERISA Event has occurred or is reasonably expected to occur;
(ii) each Loan Party and each of its ERISA Affiliates is in compliance with the
applicable provisions of ERISA, the Code and any other federal, state or local
laws relating to the Plans, and with all regulations and published
interpretations thereunder; (iii) all amounts required by applicable law with
respect to, or by the terms of, any retiree welfare benefit arrangement
maintained by any Loan Party or any of its ERISA Affiliates has an obligation to
contribute have been accrued in accordance with Statement of Financial
Accounting Standards No. 106; (iv) the present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan allocable to such accrued benefits.
(b) No UK Loan Party nor any of its Subsidiaries or Affiliates is or has at any
time after April 27, 2004 been (i) an employer (for the purposes of Sections 38
to 51 of the UK Pensions Act 2004) of an occupational pension scheme which is
not a money purchase scheme (both terms as defined in the UK Pensions Schemes
Act 1993), or (ii) “connected” with or an “associate” of (as those terms are
used in Sections 39 and 43 of the UK Pensions Act 2004) such an employer.
(c) As of the Effective Date, Schedule 3.10 lists all Foreign Benefit
Arrangements and Foreign Pension Plans currently maintained or contributed to by
the Loan Parties and their Subsidiaries. Except as could not reasonably be
expected to result, individually or in the aggregate, in a Material Adverse
Effect: (i) all employer and employee contributions (including insurance
premiums) required from any Loan Party or any of its Subsidiaries or Affiliates
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Pension Plan (including any policy held thereunder) have been made, or, if
applicable, accrued in accordance with normal accounting practices; (ii) the
accrued benefit obligations of each Foreign Pension Plan (based on those
assumptions used to fund such Foreign Pension Plan) with respect to all current
and former participants do not exceed the assets of such Foreign Pension Plan;
(iii) each Foreign Pension Plan that is required to be registered has been
registered and has been maintained in good standing with applicable regulatory
authorities; and (iv) each such Foreign Benefit Arrangement and Foreign Pension
Plan is in compliance (A) with all material provisions of applicable law and all
material applicable regulations and regulatory requirements (whether
discretionary or otherwise) and published interpretations thereunder with
respect to such Foreign Benefit Arrangement or Foreign Pension Plan and (B) with
the terms of such plan or arrangement; provided, however, that with respect to
(ii), (iii) and (iv) above, “Foreign Pension Plan” shall be read to exclude any
government-run plan or scheme to which a Loan Party or any of its Subsidiaries
or Affiliates is required to make contributions under applicable law.
(d) (i) All pension schemes operated or maintained for the benefit of a Loan
Party or any of its Subsidiaries, Affiliates or ERISA Affiliates comply with all
provisions of the relevant law and employ reasonable actuarial assumptions;
(ii) no Loan Party or any of its Subsidiaries, Affiliates or ERISA Affiliates
has any unsatisfied liability in respect of any pension scheme and there are no
circumstances which may give rise to any such liability; (iii) all pension
schemes operated by or maintained for the benefit of a Loan Party or any of its
Subsidiaries, Affiliates or ERISA Affiliates and/or any of its or their
respective current or former employees are, to the extent required by applicable
law, funded or reserved; except in the case of subclauses (i), (ii) and (iii),
to the extent failure to do so (or, with the expiry of a grace period, the
giving of notice, the making of any determination under the Loan Documents or
any combination of any of the foregoing taking into account all remedies of the
Loan Parties under the Loan Documents) could not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect.
(e) Except as could not reasonably be expected to result, individually or in the
aggregate, a Material Adverse Effect:
(i) There are no outstanding disputes concerning the assets held in any Canadian
Pension Plans or Canadian Benefit Plans pursuant to any funding agreement;
(ii) All employee contributions to any Canadian Pension Plans and Canadian
Benefit Plans required to be made by way of authorized payroll deduction have
been properly withheld and fully paid into such plans in a timely fashion;
(iii) All reports and disclosures relating to any Canadian Pension Plans and
Canadian Benefit Plans required by any applicable laws or regulations have been
filed or distributed in a timely fashion;
(iv) To the knowledge of the Loan Parties, there have been no improper
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(v) No amount is owing by or in respect of any Canadian Pension Plans under the
ITA or any provincial taxation statute;
(vi) No Canadian Pension Plan is a defined benefit pension plan that is
registered with the applicable governmental authorities for such plans;
(vii) The Loan Parties, after diligent enquiry, have neither any knowledge, nor
any grounds for believing, that any of the Canadian Pension Plans is the subject
of an investigation, any other proceeding, an action or a claim;
(viii) No promises of benefit improvements under any Canadian Benefit Plan or
Canadian Pension Plan have been made; and
(ix) Except as disclosed in Schedule 3.10, no Canadian Benefit Plan provides
benefits to retired employees or promises benefits at and after retirement to
active employees.
SECTION 3.11 Disclosure. Each Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
Subsidiary is subject, and all other matters known to it, that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither the Confidential Information Memorandum nor any of the other
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, and taken as a whole, not misleading; provided that, with respect to
projected financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time delivered and, if such projected financial information
was delivered prior to the Effective Date, as of the Effective Date.
SECTION 3.12 No Default. No Loan Party nor any of its Subsidiaries is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound in any respect that could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 3.13 Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
(x) the US Loan Parties and (y) the Canadian Loan Parties, in each case, on a
consolidated basis, at a fair valuation, will exceed their respective debts and
liabilities, subordinated, contingent or otherwise; (ii) the present fair
saleable value of the property of (x) the US Loan Parties and (y) the Canadian
Loan Parties, in each case, on a consolidated basis, will be greater than the
amount that will be required to pay the probable liability of their respective
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities generally become absolute and matured; (iii) (x) the
US Loan Parties and (y) the Canadian Loan Parties, in each case on a
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able to pay their respective debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become due, absolute and matured; (iv)
(x) the US Loan Parties and (y) the Canadian Loan Parties, in each case on a
consolidated basis, will not have unreasonably small capital with which to
conduct the business in which they are engaged as such business is now conducted
and is proposed to be conducted after the Effective Date; (v) neither the US
Loan Parties nor the Canadian Loan Parties, in each case on a consolidated
basis, have ceased paying their current obligations in the ordinary course of
business as they generally become due, (vi) the property of (x) the US Loan
Parties and (y) the Canadian Loan Parties, in each case on a consolidated basis,
at a fair valuation, is greater than the total amount of their respective debts
and liabilities, subordinated, contingent or otherwise; and (vii) the property
of (x) the US Loan Parties and (y) the Canadian Loan Parties, in each case on a
consolidated basis, is sufficient, if disposed of at a fairly conducted sale
under legal process, to enable payment of all their respective obligations, due
and accruing.
(b) Immediately after the consummation of the Transactions to occur on the
Effective Date, (i) the fair value of the assets of each European Loan Party and
each Account Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each European Loan Party and each Account Party will be greater
than the amount that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities generally become absolute and matured; (iii) each European
Loan Party and each Account Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become due,
absolute and matured; (iv) each European Loan Party and each Account Party will
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
after the Effective Date; (v) no European Loan Party or Account Party has ceased
paying its current obligations in the ordinary course of business as they
generally become due, (vi) the property of each European Loan Party and each
Account Party, at a fair valuation, is greater than the total amount of its
debts and liabilities, subordinated, contingent or otherwise; (vii) the property
of each European Loan Party and each Account Party is sufficient, if disposed of
at a fairly conducted sale under legal process, to enable payment of all its
obligations, due and accruing; and (viii) in the case of a German Loan Party
(A) it is not in a situation to admit its inability or shall be unable to pay
its debts as they fall due (Zahlungsunfähigkeit), (B) it is not over-indebted
(überschuldet) or in a situation to file for insolvency because of any of the
reasons set out in Sections 17 to 19 of the German Insolvency Code
(Insolvenzordnung), (C) its management is not required by law to file for
insolvency because of any of the circumstances specified in the preceding
sub-clauses (A) or (B) and (D) a competent court has not initiated any measures
pursuant to Section 21 of the German Insolvency Code (Insolvenzordnung). In the
case of any Designated Loan Party, any such determination set forth above (other
than pursuant to clauses (iii), (v) and, with respect to any Designated Loan
Party that is a German Loan Party, (viii) above) shall be made without giving
effect to any intercompany obligations.
(c) No Loan Party intends to, or will permit any of its Subsidiaries to, and no
Loan Party believes that it or any of its Subsidiaries will, incur debts beyond
its ability to pay such debts as they mature, taking into account the timing of
and amounts of cash to be received by it or any such Subsidiary and the timing
of the amounts of cash to be payable on or in respect of its Indebtedness or the
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SECTION 3.14 Insurance. Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Loan Parties as of the Effective Date. As of
the Effective Date, all premiums in respect of such insurance have been paid.
The Loan Parties believe that the insurance maintained by or on behalf of the
Loan Parties and their Subsidiaries are adequate.
SECTION 3.15 Capitalization and Subsidiaries. Schedule 3.15 sets forth, as of
the Effective Date, (a) a correct and complete list of the name and relationship
to the Company of each and all of the Company’s Subsidiaries, (b) a true and
complete listing of each class of authorized Equity Interests of each Borrower
(other than the Company), of which all of such issued shares are validly issued,
outstanding, fully paid and non-assessable (to the extent such concepts are
applicable), and owned beneficially and of record by the Persons identified on
Schedule 3.15, and (c) the type of entity of the Company and each of its
Subsidiaries. All of the issued and outstanding Equity Interests owned by any
Loan Party in its Subsidiaries has been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and is fully paid and non assessable.
SECTION 3.16 Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the applicable Collateral Agent, for the benefit of the Agents, the
applicable Lenders and the applicable Issuing Banks, and (a) upon filing of UCC
financing statements and the taking of any other actions or making of filings
required for perfection under the laws of the relevant Collateral Documents and
specified in such Collateral Documents, as necessary (including but not limited
to (i) the filing of financing statements under the PPSA and (ii) with respect
to Liens created by a UK Loan Party where registration of particulars of such
Liens is required, the registration at (x) the Companies Registration Office in
England, Scotland and Wales, (y) the UK Trademark Registry at the Patent Office
in England, Scotland and Wales and (z) the UK Land Registry or UK Charges
Registry in England, Scotland and Wales), and, if applicable, the taking of
actions or making of filings with respect to Intellectual Property registrations
or applications issued or pending as specified, and, in the case of real
property, filing of the Mortgages as necessary, such Liens constitute perfected
and continuing Liens on the Collateral, securing the applicable Secured
Obligations, enforceable against the applicable Loan Party and all third
parties, and having priority over all other Liens on the Collateral, except in
the case of Permitted Liens, to the extent any such Permitted Liens would have
priority over the Liens in favor of the US Collateral Agent, the Canadian
Collateral Agent or the European Collateral Agent, as applicable, pursuant to
any applicable law. As of the Effective Date, the jurisdictions in which the
filing of UCC financing statements (or their equivalent under the PPSA) are
necessary are listed on Schedule 3.16 and the jurisdictions in which the filing
of the Mortgages are necessary are listed on Schedule 3.16.
SECTION 3.17 Employment Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns, and no material unfair labor practice charges, against
any Loan Party or its Subsidiaries pending or, to the knowledge of the
Borrowers, threatened. The terms and conditions of employment, hours worked by
and payments made to employees of the Loan Parties and their Subsidiaries have
not been in material violation of the Fair Labor Standards Act, the Employee
Standards Act (Ontario), or any other applicable federal, provincial,
territorial, state, local or foreign law dealing with such matters. All material
payments due from any Loan Party or any of its Subsidiaries, or for which any
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any of its Subsidiaries, on account of wages, vacation pay and employee health
and welfare insurance and other benefits, including on account of the Canada and
Quebec pension plans, have been paid or accrued as a liability on the books of
the Loan Party or such Subsidiary.
SECTION 3.18 Common Enterprise. The successful operation and condition of each
of the Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its best
interest.
SECTION 3.19 Centre of Main Interests. For the purposes of the Council of the
European Union Regulation No. 1346/2000 on Insolvency Proceedings, each European
Loan Party’s centre of main interests (as that term is used in Article 3(1)
therein) is situated in its jurisdiction of incorporation and it has no
“establishment” (as that term is used in Article 2(h) therein) in any other
jurisdiction.
SECTION 3.20 Regulation H. No Mortgage encumbers improved real property that is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of 1968
other than the property described on Schedule 1.01(d) located in North Bergen,
New Jersey.
SECTION 3.21 Certain Documents. The Borrower Representative has delivered to the
Administrative Agent a complete and correct copy of any agreements governing the
Existing Euro Notes and the 2006 Synthetic Lease, including the Existing Euro
Notes Documentation and the Synthetic Lease Documentation, and including any
material amendments, supplements or modifications with respect to any of the
foregoing.
ARTICLE IV
Conditions
SECTION 4.01 Effective Date. The effectiveness of this Agreement and the
obligations of the Lenders to make Loans and of the Issuing Banks to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 9.02):
(a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile or .pdf
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signature page of this Agreement) that such party has signed a counterpart of
this Agreement and (ii) duly executed copies (or facsimile or .pdf copies) of
the Specified Loan Documents and such other certificates, documents, instruments
and agreements as the Administrative Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including any promissory notes requested by a Lender pursuant to
Section 2.10 payable to the order of each such requesting Lender and written
opinions of the Loan Parties’ counsel, addressed to the Administrative Agent
(and, where applicable, the Canadian Administrative Agent and the European
Administrative Agent), the Issuing Banks and the Lenders.
(b) Financial Statements and Projections. The Lenders shall have received (i)
audited consolidated financial statements of the Company and its Subsidiaries
for their 2008 and 2009 fiscal years, (ii) unaudited interim consolidated
financial statements of the Company and its Subsidiaries for each fiscal month
ended after the date of the latest applicable financial statements delivered
pursuant to clause (i) of this paragraph as to which such financial statements
are available, (iii) monthly projections (including forecasts of Aggregate
Availability) of the Company and its Subsidiaries for each fiscal month ending
April 3, 2010 through January 1, 2011 and (iv) annual projections of the Company
and its Subsidiaries for fiscal year 2011 through 2014.
(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of
each Loan Party, dated the Effective Date and executed by its Secretary,
Assistant Secretary or authorized manager or director, which shall (A) certify
the resolutions of its Board of Directors, Board of Managers, shareholders,
members or other body authorizing the execution, delivery and performance of the
Loan Documents to which it is a party, (B) identify by name and title and bear
the signatures of any officers or managers of such Loan Party authorized to sign
the Loan Documents to which it is a party, (C) in respect of a UK Loan Party,
contain a statement to the effect that its entry into and performance of the
transactions contemplated by the Loan Documents do not and will not exceed any
limit on its powers to borrow, grant security or give the guarantees and
indemnities contemplated by the Loan Documents to which it is a party, and
(D) contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Loan Party certified by the relevant
authority of the jurisdiction of organization of such Loan Party, a true and
correct certified (if applicable) copy of its by-laws, memorandum and articles
of association or operating, management or partnership agreement (or, in each
case, such certificate shall certify that any such documents delivered to the
Administrative Agent in connection with the Existing Credit Agreement continue
to be true, complete and correct copies) and (with respect to any European Loan
Party or Canadian Loan Party) a certified list of its shareholders; and (ii) a
long form certificate of good standing, status or compliance, as applicable, for
each Loan Party from its jurisdiction of organization (to the extent such
concept is relevant or applicable in such jurisdiction).
(d) No Default Certificate. The Administrative Agent shall have received a
certificate, signed by the chief financial officer of the Borrower
Representative and dated the Effective Date (i) stating that no Default has
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that the representations and warranties contained in Article III are true and
correct as of such date, and (iii) certifying any other factual matters as may
be reasonably requested by the Administrative Agent.
(e) Fees. The Lenders, the Agents and the Lead Arrangers shall have received all
fees required to be paid, and all reasonable and documented out-of-pocket
expenses for which invoices have been presented (including the reasonable fees,
disbursements and other charges of one legal counsel of the Administrative
Agent, as well as one local counsel of the Administrative Agent in each relevant
jurisdiction, and in the event of any conflict of interest, additional counsel
for affected indemnified persons), on or before the Effective Date. All such
amounts will be paid with proceeds of Loans made on the Effective Date and will
be reflected in the funding instructions given by the Borrower Representative to
the Administrative Agent on or before the Effective Date.
(f) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where the Loan Parties (other
than the European Loan Parties) are organized, and such search report shall
reveal no liens on any of the assets of the Loan Parties except for liens
permitted by Section 6.02 or discharged on or prior to the Effective Date
pursuant to a pay-off letter or other documentation satisfactory to the
Administrative Agent.
(g) Funding Accounts. The Administrative Agent shall have received a notice from
the Borrower Representative setting forth the deposit account(s) of the
Borrowers (the “Funding Accounts”) to which the Lender is authorized by the
Borrowers to transfer the proceeds of any Borrowings requested or authorized
pursuant to this Agreement.
(h) Collateral Access and Control Agreements. (i) The Borrowers shall have used
commercially reasonable efforts to obtain the Collateral Access Agreements
required to be provided pursuant to the Security Agreements and any such
agreements so obtained shall have been delivered to the Administrative Agent and
(ii) the Administrative Agent shall have received (x) each Deposit Account
Control Agreement and Lock Box Agreement required to be provided pursuant to the
Security Agreements and (y) each account transfer agreement or other document
that the European Administrative Agent deems necessary to ensure future
compliance with Section 5.17.
(i) Solvency. The Administrative Agent shall have received a solvency
certificate from a Financial Officer of each Borrower (other than the European
Borrower and the UK Borrower which shall provide a representation as to solvency
in a director’s certificate).
(j) Borrowing Base Certificate. The Administrative Agent shall have received
(a) an Aggregate Borrowing Base Certificate which calculates the Aggregate
Borrowing Base as of April 3, 2010 and (b) a US Borrowing Base Certificate,
Canadian Borrowing Base Certificate, UK Borrowing Base Certificate and European
Borrowing Base Certificate which calculates each such Borrowing Base as of
April 3, 2010, in each case on a pro forma basis after giving effect to the
Effective Date.

 

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(k) Closing Availability. After giving effect to all Borrowings to be made on
the Effective Date and the issuance of any Letters of Credit on the Effective
Date and payment of all fees and expenses due hereunder, and with all of the
Loan Parties’ indebtedness, liabilities and obligations current, the Loan
Parties’ Aggregate Availability shall not be less than $150,000,000.
(l) Pledged Stock; Stock Powers; Pledged Notes. The US Collateral Agent, the
Canadian Collateral Agent or the European Collateral Agent, as applicable and
with the exception of the Netherlands Loan Parties, shall have received (i) the
certificates representing shares of Equity Interests pledged pursuant to the
applicable Security Agreements, together with an undated stock power or stock
transfer form, as applicable, for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (ii) each promissory note (if
any) pledged to the US Collateral Agent, the Canadian Collateral Agent or the
European Collateral Agent, as applicable and with the exception of the
Netherlands Loan Parties, pursuant to the Security Agreements endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof or pursuant to a duly notarized German Share Pledge Agreement
and the German Partnership Interest Pledge Agreement.
(m) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably requested by any Collateral Agent to be filed,
registered or recorded in order to create in favor of the applicable Collateral
Agent, for the benefit of the Agents, the applicable Lenders and the applicable
Issuing Banks, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 6.02), shall be in proper form for filing,
registration or recordation.
(n) Approvals. All material governmental and third party approvals (including
landlords’ and other consents) necessary in connection with the Transactions,
the continuing operations of the Company and its Subsidiaries and the
transactions contemplated hereby shall have been obtained and be in full force
and effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would restrain,
prevent or otherwise impose adverse conditions on the Transactions or the
financing contemplated hereby.
(o) Mortgages, etc. The Loan Parties shall have delivered to the US Collateral
Agent, with respect to each Mortgaged Property subject to an Existing Mortgage
pursuant to the Existing Credit Agreement, each of the following, in form and
substance reasonably satisfactory to the Administrative Agent:
(i) an amendment to the Existing Mortgage covering such parcel of real property
in form and substance reasonably satisfactory to the Administrative Agent;
(ii) (1) an ALTA or other mortgagee’s title insurance policy for such Mortgaged
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by the US Collateral Agent or (2) a “date-down” endorsement to (or modification
of) the existing title insurance policy for such parcel of Mortgaged Property
issued by the title company that issued such existing title insurance policy,
which endorsement (or modification) shall update the effective date of such
existing title insurance policy and amend the description of the insured
Existing Mortgage to include the amendment to such Existing Mortgage;
(iii) evidence that the Company has paid all premiums in respect of the
endorsement to the existing title policy for such Mortgaged Property, as well as
all charges for mortgage recording taxes and mortgage filing fees payable in
connection with the recording of the amendment to the Existing Mortgage covering
such parcel of Mortgaged Property, and all related expenses, if any;
(iv) an opinion of counsel in the state in which such parcel of real property is
located in form and substance and from counsel reasonably satisfactory to the
Administrative Agent; and
(v) (1) a “Life-of-Loan” Federal Emergency Management Agency Standard Flood
Hazard Determination with respect to such Mortgaged Property (together with, if
required, a notice about special flood hazard area status and flood disaster
assistance duly executed by the Company or the applicable Loan Party in the
event any such Mortgaged Property is located in a special flood hazard area) and
(2) if any portion of such Mortgaged Property is located in an area identified
by the Federal Emergency Management Agency (or any successor agency) as a
Special Flood Hazard Area with respect to which flood insurance has been made
available under the National Flood Insurance Act of 1968 (now or as hereafter in
effect or any successor act thereto), (a) flood insurance with a financially
sound and reputable insurer, in an amount and otherwise sufficient to comply
with all applicable rules and regulations promulgated pursuant to (i) the
National Flood Insurance Act of 1968 as now or hereafter in effect or any
successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now
or hereafter in effect or any successor statute thereto, (iii) the National
Flood Insurance Reform Act of 1994 as now or hereafter in effect or any
successor statute thereto and (iv) the Flood Insurance Reform Act of 2004 as now
or hereafter in effect or any successor statute thereto (any such insurance
“Flood Insurance”) and (b) evidence of such insurance in form and substance
reasonably acceptable to the Administrative Agent.
(p) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the applicable terms of
the Security Agreements (including Section 5.09 of this Agreement and the
applicable provisions of the Security Agreements).
(q) Appraisals and Field Exams. The Administrative Agent shall have received
appraisals of Inventory and real property and field exams from appraisers
satisfactory to the Administrative Agent.

 

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(r) Customer List. The Administrative Agent shall have received a true and
complete list of the names and addresses of the wholesale customers of each Loan
Party.
(s) Letter of Credit Application. The Administrative Agent shall have received a
properly completed letter of credit application if the issuance of a Letter of
Credit will be required on the Effective Date.
(t) USA Patriot Act. Each Lender shall have received all information necessary
to enable such Lender to identify each Borrower and each other Loan Party to the
extent required for compliance with the Patriot Act or other “know your
customer” and anti-money laundering rules and regulations.
(u) Acknowledgement and Consent. The Administrative Agent shall have received an
Acknowledgement and Consent, substantially in the form of Schedule 1 to the US
Security Agreement, duly executed by each issuer of any US Pledged Stock or US
Pledged Note that is not a US Loan Party and has not delivered an Acknowledgment
and Consent in connection with the Existing Credit Agreement, in each case, in
form and substance reasonably acceptable to the Administrative Agent.
(v) Synthetic Lease Documents. The Administrative Agent shall have received duly
executed copies of the Synthetic Lease Documentation, including the Synthetic
Lease Amendment, in form and substance reasonably acceptable to the
Administrative Agent.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. After the
Effective Date, the Administrative Agent shall make available to the Lenders
executed versions of the Loan Documents. Notwithstanding the foregoing, neither
this Agreement nor the obligations of the Lenders to make Loans and of any
Issuing Bank to issue Letters of Credit hereunder shall become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 2:00 p.m., New York time, on May 6, 2010 (and, in
the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).
SECTION 4.02 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of each Issuing Bank to issue, amend, renew
or extend any Letter of Credit (other than any such amendments (“Immaterial
Amendments”) that are purely administrative in nature and, for the avoidance of
doubt, do not involve amendments to the amount or tenor of such Letter of
Credit), is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Loan Parties set forth in this
Agreement shall be true and correct in all material respects on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, except that such representations and
warranties (i) that relate solely to an earlier date shall be true and correct
as of such earlier date and (ii) shall be true and correct in all respects if
they are qualified by a materiality standard.

 

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(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
(c) Each Borrowing and each issuance of any Letter of Credit shall be made in
compliance with the Revolving Exposure Limitations.
Each Borrowing and each issuance, amendment (other than any Immaterial
Amendment), renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrowers on the date thereof as
to the matters specified in paragraphs (a), (b) and (c) of this Section 4.02.
Notwithstanding the failure to satisfy the conditions precedent set forth in
paragraphs (a) or (b) of this Section, unless otherwise directed by the Required
Lenders, the Administrative Agent may, but shall have no obligation to, continue
to make (or authorize the European Administrative Agent or Canadian
Administrative Agent to make) Loans and an Issuing Bank may, but shall have no
obligation to, issue or cause to be issued any Letter of Credit (or amend, renew
or extend any Letter of Credit) for the ratable account and risk of Lenders from
time to time if the Administrative Agent believes that making such Loans or
issuing or causing to be issued (or amending, renewing or extending) any such
Letter of Credit is in the best interests of the Lenders (it being understood
that in no event shall the Administrative Agent continue to make (or authorize
the European Administrative Agent or the Canadian Administrative Agent to make)
Revolving Loans or an Issuing Lender issue (or amend (other than pursuant to
Immaterial Amendments), renew or extend) Letters of Credit if an Event of
Default pursuant to clauses (a), (b), (d) (solely with respect to a failure to
be in compliance with Section 6.16), (h), (i), (m), (n), (o) or (p) of
Article VII shall have occurred and be continuing).
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full in cash and all Letters of Credit shall have expired or terminated (or have
been cash collateralized in accordance with Section 2.06(j) hereof) and all LC
Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the Loan
Parties, with the Lenders that:
SECTION 5.01 Financial Statements; Borrowing Base and Other Information. The
Company will furnish to the Administrative Agent (with copies to be provided to
each Lender by the Administrative Agent):
(a) within 90 days after the end of each fiscal year of the Company, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by Deloitte & Touche LLP or another registered public accounting firm of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
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consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, accompanied by any required auditors’ communications to
the Audit Committee related to significant deficiencies and material weaknesses
prepared by said accountants;
(b) within 45 days after the end of each of the first three fiscal quarters of
the Company’s fiscal year, its consolidated balance sheet and related statements
of operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by a Financial Officer of the Borrower Representative
as presenting fairly in all material respects the financial condition and
results of operations of the Company and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;
(c) within 30 days (or, with respect to the twelfth fiscal month of each fiscal
year, within 60 days) after the end of each fiscal month of the Company (other
than the third, sixth and ninth fiscal month of each fiscal year), its
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such fiscal month and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by
one of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(d) concurrently with any delivery of financial statements under clause (a),
(b) or (c) above, a certificate of a Financial Officer of the Borrower
Representative in substantially the form of Exhibit C (i) certifying, in the
case of the financial statements delivered under clause (b) or (c), as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments, (ii) certifying as to whether a Default has occurred and, if
a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (iii) demonstrating compliance with
Section 6.16 and (iv) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 3.04 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause
(a) above, an auditor’s report of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
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examination of such financial statements of any Event of Default (which report
may be limited to the extent required or advised by accounting rules or
guidelines);
(f) as soon as available, but in any event 15 days prior to the end of each
fiscal year of the Company, a copy of the plan and forecast (including a
projected consolidated balance sheet, income statement and funds flow statement
in form acceptable to the Administrative Agent and including forecasts of
Aggregate Availability) of the Company for each month of the upcoming fiscal
year (the “Projections”) in form reasonably satisfactory to the Administrative
Agent;
(g) as soon as available, but in any event within 20 days (or, in the case of
the last fiscal month of each fiscal year, 30 days) of the end of each fiscal
month (or within three Business Days of the end of each week at any time during
a Full Cash Dominion Period), an Aggregate Borrowing Base Certificate, a US
Borrowing Base Certificate, a Canadian Borrowing Base Certificate, a UK
Borrowing Base Certificate and a European Borrowing Base Certificate, in each
case which calculates such Borrowing Base, and supporting information in
connection therewith, together with any additional reports with respect to the
Aggregate Borrowing Base, the US Borrowing Base, the Canadian Borrowing Base,
the UK Borrowing Base or the European Borrowing Base of a Borrower as the
Administrative Agent or any Collateral Agent may reasonably request; provided
that no Canadian Borrowing Base Certificate, UK Borrowing Base Certificate or
European Borrowing Base Certificate or additional reports with respect thereto
shall be required if the European Sublimit, UK Sublimit or Canadian Sublimit, as
applicable, shall have been terminated;
(h) as soon as available but in any event within 20 days (or, in the case of the
last fiscal month of each fiscal year, 30 days) of the end of each fiscal month
(or within three Business Days of the end of each week at any time during a Full
Cash Dominion Period) and at such other times as may be reasonably requested by
the Administrative Agent or any Collateral Agent, as of the period then ended:
(i) a detailed aging of each Loan Party’s Accounts (1) including all invoices
aged by invoice date and due date (with an explanation of the terms offered) and
(2) reconciled to the applicable Borrowing Base Certificate delivered as of such
date prepared in a manner reasonably acceptable to the Administrative Agent,
together with a summary specifying the name, address, and balance due for each
Account Debtor;
(ii) a schedule detailing the Loan Parties’ Inventory, in form satisfactory to
the Administrative Agent, (1) by location (showing Inventory in transit, any
Inventory located with a third party under any consignment, bailee arrangement,
or warehouse agreement), by class (raw material, work-in-process and finished
goods), by product type, and by volume on hand, which Inventory shall be valued
at the lower of cost (determined on a first-in, first-out basis) or market and
adjusted for Reserves as the Administrative Agent has previously indicated to
the Loan Parties are deemed by the Administrative Agent to be appropriate,
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counts performed by the Loan Parties since the last Inventory schedule
(including information regarding sales or other reductions, additions, returns,
credits issued by any Loan Party and complaints and claims made against any Loan
Party), and (3) reconciled to the applicable Borrowing Base Certificate
delivered as of such date;
(iii) a worksheet of calculations prepared by the Loan Parties to determine
Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts
and Inventory excluded from Eligible Accounts and Eligible Inventory and the
reason for such exclusion;
(iv) a reconciliation of the Loan Parties’ Accounts and Inventory between the
amounts shown in the applicable Loan Party’s general ledger and financial
statements and the reports delivered pursuant to clauses (i) and (ii) above; and
(v) a reconciliation of the loan balance per the Loan Parties’ general ledger to
the loan balance under this Agreement;
(i) as soon as available but in any event within 20 days (or, in the case of the
last fiscal month of each fiscal year, 30 days) of the end of each fiscal month
and at such other times as may be requested by the Administrative Agent, as of
the month then ended, a schedule and aging of the Loan Parties’ accounts
payable, delivered electronically in a text formatted file acceptable to the
Administrative Agent;
(j) within 45 days of each March 31 and September 30, in the case of the US Loan
Parties and Canadian Loan Parties, or within 15 days of the end of each calendar
month, in the case of the European Loan Parties, (or upon the reasonable request
of the Administrative Agent), an updated customer list for each Loan Party,
which list shall state the customer’s name, mailing address and phone number (to
the extent available) and shall be certified as true and correct by a Financial
Officer of the Borrower Representative;
(k) promptly upon the Administrative Agent’s reasonable request:
(i) copies of invoices in connection with the invoices issued by the Loan
Parties in connection with any Accounts, credit memos, shipping and delivery
documents, and other information related thereto;
(ii) copies of purchase orders, invoices, and shipping and delivery documents in
connection with any Inventory or Equipment purchased by any Loan Party; and
(iii) a schedule detailing the balance of all intercompany accounts of the Loan
Parties;
(l) as soon as possible and in any event within 30 days of filing thereof,
copies of all U.S. federal income tax returns (including all related schedules)
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Loan Party with the U.S. Internal Revenue Service; provided that for taxable
years during which the Company or any Loan Party did not incur any loss and for
which the Company or any Loan Party is not utilizing any net operating loss
carrybacks or forwards, the Company is required to provide only copies of page
one through four and material related schedules of U.S. federal income tax
returns filed for such taxable years;
(m) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Company or
any Subsidiary with the U.S. Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its shareholders generally, as the case may be; provided that any
documents required to be delivered pursuant to this clause (m) shall be deemed
to have been delivered on the date (i) on which the Company posts such
documents, or provides a link thereto on the Company’s website on the Internet
at the website address listed in Section 9.01; or (ii) on which such documents
are posted on the Company’s behalf on IntraLinks/IntraAgency or another relevant
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided further that: (x) upon written request by the
Administrative Agent, the Company shall deliver paper copies of such documents
to the Administrative Agent for further distribution to each Lender until a
written request to cease delivering paper copies is given by the Administrative
Agent and (y) the Company shall notify (which may be by facsimile or electronic
mail) the Administrative Agent of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents; and
(n) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Loan Party or
any Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent, any Collateral Agent or any Lender (through the
Administrative Agent) may reasonably request.
SECTION 5.02 Notices of Material Events. The Loan Parties will furnish to the
Administrative Agent and each Lender prompt written notice (and in any event
within five days after such Loan Party obtains knowledge of any of the following
events) of the following:
(a) the occurrence of any Default or Event of Default;
(b) any actual knowledge of the Loan Parties of, or any receipt of any notice
of, any governmental investigation or any litigation, arbitration or
administrative proceeding commenced or, to the knowledge of any Loan Party,
threatened against any Loan Party or any of its Subsidiaries that (i) seeks
damages in excess of $25,000,000, (ii) seeks material injunctive relief,
(iii) is asserted or instituted against any Plan, Foreign Pension Plan, Foreign
Benefit Arrangement, its fiduciaries or its assets, (iv) alleges criminal
misconduct by any Loan Party or any of its Subsidiaries, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
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(vi) contests any tax, fee, assessment, or other governmental charge in excess
of $25,000,000;
(c) any Lien (other than Permitted Encumbrances) or claim made or asserted
against any of the Collateral in excess of $5,000,000;
(d) any loss, damage, or destruction to the Collateral in the amount of
$25,000,000 or more per occurrence or related occurrences, whether or not
covered by insurance;
(e) any and all default notices received under or with respect to any leased
location or public warehouse where Collateral with a cost in excess of
$2,000,000 is located (which shall be delivered within five Business Days after
receipt thereof);
(f) the occurrence of any ERISA Event or breach of the representations and
warranties in Section 3.10 that, alone or together with any other ERISA Events
or breaches of such representations and warranties that have occurred, could
reasonably be expected to result in liability of the Loan Parties and their
Subsidiaries, whether directly or by virtue of their affiliate with any ERISA
Affiliate, in an aggregate amount exceeding $25,000,000;
(g) the release into the environment of any Hazardous Material that is required
by any applicable Environmental Law to be reported to a Governmental Authority
and which could reasonably be expected to lead to any material Environmental
Liability;
(h) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect; and
(i) any material amendments to the Kate Spade JV Agreement, which notice shall
be delivered, promptly after the same becomes effective, with a copy of such
agreement and amendments thereof delivered to the Administrative Agent
simultaneously therewith.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower Representative
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03 Existence; Conduct of Business. Each Loan Party will, and will
cause each of its Subsidiaries to, (a) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and, except where any of the following could not reasonably be
expected to result in a Material Adverse Effect, the rights, qualifications,
licenses, permits, franchises, governmental authorizations, intellectual
property rights, licenses and permits used or useful in the conduct of its
business, and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted; provided that the foregoing
shall not prohibit any merger, amalgamation, consolidation, liquidation or
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permitted under Section 6.03 and (b) carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted.
SECTION 5.04 Payment of Obligations. Each Loan Party will, and will cause each
of its Subsidiaries to, pay or discharge all Material Indebtedness and all other
material liabilities and obligations, including Taxes, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) such Loan Party
or such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP or local generally accepted accounting
principles, as the case may be, and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05 Maintenance of Properties. Each Loan Party will, and will cause
each of its Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted, except where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.06 Books and Records; Inspection Rights. Without limiting
Sections 5.11 or 5.12 hereof, each Loan Party will, and will cause each of its
Subsidiaries to, (a) keep proper books of record and account in which full, true
and correct entries in accordance with GAAP or local generally accepted
accounting principles, as the case may be, are made of all dealings and
transactions in relation to its business and activities and (b) permit any
representatives designated by the Administrative Agent, any Collateral Agent or
any Lender (including employees of the Administrative Agent, any Collateral
Agent, any Lender or any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent, any Collateral Agent or any Lender), upon
reasonable prior notice during normal business hours, to visit and inspect its
properties and to examine and make extracts from its books and records,
including environmental assessment reports and Phase I or Phase II studies, and
the applicable Loan Party or Subsidiary will make its officers and independent
accountants available to discuss its affairs, finances and condition with such
representatives, all at such reasonable times as are requested during normal
business hours. For purposes of this Section 5.06, it is understood and agreed
that a single site visit and inspection may consist of examinations conducted at
multiple relevant sites and involve one or more relevant Loan Parties and
Subsidiaries and their respective assets. All such site visits and inspections
shall be at the sole expense of the Loan Parties. The Loan Parties acknowledge
that the Administrative Agent and each Collateral Agent, after exercising its
rights of inspection, may prepare and distribute to the Lenders certain Reports
pertaining to the Loan Parties’ and their respective Subsidiaries assets for
internal use by the Administrative Agent, each Collateral Agent and the Lenders.
SECTION 5.07 Compliance with Laws. (a) Each Loan Party will, and will cause each
of its Subsidiaries to, comply with all Contractual Obligations and Requirements
of Law applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
(b) US and Foreign Plans and Arrangements.

 

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(i) For each Company Plan, each Loan Party will, and will cause each of its
Subsidiaries, Affiliates and ERISA Affiliates to, in a timely fashion comply
with and perform all of its obligations under and in respect of such Company
Plan, including under plan terms, any funding agreements and all applicable laws
and regulatory requirements (whether discretionary or otherwise); and
(ii) All employer or employee payments, contributions or premiums required to be
remitted, paid to or in respect of each Company Plan by a Loan Party or any
Subsidiary, Affiliate or ERISA Affiliate thereof shall be paid or remitted by
each Loan Party, or Subsidiary, Affiliate or ERISA Affiliate thereof in a timely
fashion in accordance with the terms thereof, any funding agreements and all
applicable laws; except, in the case of subclauses (i) and (ii) as could not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect; and
(iii) The Loan Parties shall deliver to each Lender: (A) if requested by such
Lender, copies of each annual and other return, report or valuation with respect
to each Company Plan, as filed with any applicable Governmental Authority;
(B) promptly following receipt thereof, copies of any documents described in
Sections 101(k) or 101(l) of ERISA that any Loan Party or any ERISA Affiliate
may request with respect to any Multiemployer Plan; provided that if the Loan
Parties or any of their ERISA Affiliates have not requested such documents or
notices from the administrator or sponsor of the applicable Multiemployer Plan,
then, upon reasonable request of the Administrative Agent, the Loan Parties
and/or their ERISA Affiliates shall promptly make a request for such documents
or notices from such administrator or sponsor and the Loan Parties shall provide
copies of such documents and notices to the Administrative Agent (on behalf of
each requesting Lender) promptly after receipt thereof; (C) promptly after
receipt thereof, a copy of any material direction, order, notice, ruling or
opinion that any Loan Party or any Subsidiary, Affiliate or ERISA Affiliate of
any Loan Party may receive from any applicable Governmental Authority with
respect to any Company Plan; (D) notification within 30 days of (i) any
increases having a cost to one or more of the Loan Parties or any Subsidiary,
Affiliate or Loan Party thereof in excess of $10,000,000 per annum in the
aggregate, in the benefits of any existing Company Plan, or (ii) the
establishment of any new Company Plan (or, in the case of any Canadian Plan, any
plan that is a “Registered Pension Plan” as that term is defined under
subsection 248(1) of the Income Tax Act (Canada)), or the commencement of
contributions to any such plan to which any Loan Party, Subsidiary, Affiliate or
ERISA Affiliate was not previously contributing; and (E) notification within
30 days of any voluntary or involuntary termination of, or participation in, a
Company Plan.
(c) UK Loan Party Pension Plans and Benefit Plans.
(i) A UK Loan Party shall ensure that (A) neither it nor any of its Subsidiaries
or Affiliates is or has been at any time after April 27, 2004 an

 

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employer (for the purposes of Sections 38 to 51 of the UK Pensions Act 2004) of
an occupational pension scheme which is not a money purchase scheme (both terms
as defined in the UK Pension Schemes Act 1993) or “connected” with or an
“associate” of (as those terms are used in Sections 38 and 43 of the UK Pensions
Act 2004) such an employer and (B) no Person who becomes a Subsidiary or
Affiliate of a UK Loan Party after the date of this Agreement, was formerly an
employer (for the purposes of Sections 38 to 51 of the UK Pensions Act 2004) of
an occupational pension scheme which is not a money purchase scheme (both terms
as defined in the UK Pension Schemes Act 1993) or was formerly “connected” with
or an “associate” of (as those terms are used in Sections 38 and 43 of the UK
Pensions Act 2004) such an employer.
(d) European Loan Party Pension Plans and Benefit Plans.
(i) No European Loan Party shall establish, nor shall it permit any of its
Subsidiaries or Affiliates to establish, any voluntary pension scheme and/or any
voluntary benefit plan without the prior consent of the Administrative Agent.
(ii) Each European Loan Party shall, and shall cause its Subsidiaries and
Affiliates to, maintain and operate its obligations under (A) its benefit plans,
if any, and (B) the voluntary pension schemes and/or voluntary benefit plans
consented to by the Administrative Agent, if any, in all respects in conformity
with the requirements of applicable law or contract; and
(iii) All pension schemes established or maintained by a Loan Party or any
Subsidiary, Affiliate or ERISA Affiliate thereof shall comply with all
provisions of the relevant law and employ reasonable actuarial assumptions; and
no Loan Party or any Subsidiary, Affiliate or ERISA Affiliate thereof shall have
any unsatisfied liability in respect of any pension scheme and there shall be no
circumstances which may give rise to any liability; except, in the case of
subclauses (ii) and (iii), as could not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect.
(e) Environmental Covenant. The Loan Parties and each of their Subsidiaries: (i)
shall be at all times in compliance with all applicable Environmental Laws, and
undertake reasonable efforts to ensure compliance in all material respects by
all tenants and subtenants, if any, with, all applicable Environmental Laws, and
(ii) generate, use, treat, store, release, transport, dispose of, and otherwise
manage all Hazardous Materials in a manner that would not reasonably be expected
to result in a material liability to any Loan Party or any of its Subsidiaries
or to materially affect any real property owned or operated by any of them; and
take reasonable efforts to prevent any other Person from generating, using,
treating, storing, releasing, transporting, disposing of, or otherwise managing
Hazardous Materials in a manner that could reasonably be expected to result in a
material liability to, or materially affect any real property owned or operated
by, any Loan Party or any of their Subsidiaries; it being understood that this
clause (e) shall be deemed not breached by a noncompliance with any of the
foregoing (i) or (ii) if, upon learning of such noncompliance or any condition
that results from such noncompliance, any affected Loan Parties and Subsidiaries
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response to such noncompliance and any such condition that is consistent with
principles of prudent environmental management and all applicable Environmental
Laws, and such response and condition, in the aggregate with any other such
responses and conditions, could not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.08 Use of Proceeds. The proceeds of the Loans will be used only for
working capital needs and general corporate purposes, including refinancing,
repayment, repurchase and cash settlements of certain existing Indebtedness and
acquisitions. No part of the proceeds of any Loan and no Letter of Credit will
be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X.
SECTION 5.09 Insurance. Each Loan Party will maintain with financially sound and
reputable carriers having a financial strength rating of at least A- by A.M.
Best Company (a) insurance in such amounts (with no greater risk retention) and
against such risks (including loss or damage by fire or flood and loss in
transit; theft, burglary, pilferage, larceny, employee dishonesty, embezzlement,
and other criminal activities; business interruption; and general liability) and
such other hazards, as is customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations, (b) all insurance required pursuant to the Collateral
Documents or (in the case of Loan Parties located outside of the United States)
such other insurance maintained with other carriers as is satisfactory to the
Administrative Agent in its Permitted Discretion and (c) if any portion of any
Mortgaged Property is located in an area identified by the Federal Emergency
Management Agency (or any successor agency) as a Special Flood Hazard Area with
respect to which flood insurance has been made available under the National
Flood Insurance Act of 1968 (now or as hereafter in effect or any successor act
thereto), Flood Insurance. The Borrowers will furnish to the Lenders, upon
request of the Administrative Agent, information in reasonable detail as to the
insurance so maintained, which may be a Memorandum of Insurance. The Borrowers
shall require all such policies to name the US Collateral Agent, the Canadian
Collateral Agent or the European Collateral Agent (on behalf of the Agents, the
Lenders and the Issuing Banks) as additional insured or loss payee, as
applicable.
SECTION 5.10 Casualty and Condemnation. The Borrowers (a) will furnish to the
Administrative Agent (for delivery to the Lenders) prompt written notice of any
casualty or other insured damage to any material portion of the Collateral or
the commencement of any action or proceeding for the taking of any material
portion of the Collateral or interest therein under power of eminent domain or
by condemnation or similar proceeding and (b) will ensure that the net proceeds
of any such event (whether in the form of insurance proceeds, condemnation
awards or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Collateral Documents.
SECTION 5.11 Appraisals. On two occasions (or, (x) with respect to appraisals of
real property and Intellectual Property, one occasion and (y) with respect to
Inventory appraisals, at any time that Aggregate Availability is less than
$70,000,000, three occasions) per calendar year, as directed by the
Administrative Agent or any Collateral Agent, the Loan Parties will provide the
Administrative Agent or such Collateral Agent with appraisals or updates thereof
of their Inventory, Intellectual Property or real property, as applicable, from
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engaged by the Administrative Agent or such Collateral Agent, and prepared on a
basis satisfactory to the Administrative Agent or such Collateral Agent, such
appraisals and updates to include, without limitation, information required by
applicable law and regulations. Notwithstanding the foregoing, in addition to
the appraisals permitted above, there shall be no limitation on the number of
Inventory, Intellectual Property or real property appraisals (a) during any
Level 1 Minimum Aggregate Availability Period or (b) if an Event of Default
shall have occurred and be continuing. For purposes of this Section 5.11, it is
understood and agreed that a single Inventory, Intellectual Property or real
estate appraisal may consist of examinations conducted at multiple relevant
sites, both domestic and international, and involve one or more relevant Loan
Parties and their assets. All such Collateral appraisals shall be at the sole
expense of the Loan Parties.
SECTION 5.12 Field Examinations. At the request of the Administrative Agent or
any Collateral Agent, the Loan Parties will permit, upon reasonable notice, the
Administrative Agent and/or any Collateral Agent to conduct field examinations
during normal business hours to ensure the adequacy of Collateral included in
any Borrowing Base and related reporting and control systems. Two such field
examinations per calendar year shall be performed by the Administrative Agent
and shall be at the sole expense of the Loan Parties; provided that there shall
be no limitation on the number or frequency of field examinations at the sole
expense of the Loan Parties (a) during any Level 1 Minimum Aggregate
Availability Period or (b) if an Event of Default shall have occurred and be
continuing. For purposes of this Section 5.12, it is understood and agreed that
a single field examination may be conducted at multiple relevant sites, both
domestic and international, and involve one or more relevant Loan Parties and
their assets.
SECTION 5.13 [Reserved].
SECTION 5.14 Additional Collateral; Further Assurances. (a) Subject to
applicable law, the Company and each Subsidiary that is a Loan Party shall cause
each of its Subsidiaries formed or acquired after the date of this Agreement and
organized under the laws of the United States, Canada, the Netherlands, Germany,
England and Wales, Ireland or, solely to the extent any such Subsidiary formed
or acquired after the date hereof opens any deposit account that the European
Administrative Agent determines is part of the European Borrower’s cash
structure, any other member state of the European Union, or, in each case, any
political subdivision thereof (within five Business Days after such formation or
acquisition, or such longer period as may be agreed to by the Administrative
Agent) (A) in accordance with the terms of this Agreement to become a Loan Party
by executing the Joinder Agreement set forth as Exhibit D hereto (the “Joinder
Agreement”) or such other Loan Guaranty in form and substance satisfactory to
the Administrative Agent and (B) to execute and deliver such amendments,
supplements or documents of accession to any Collateral Documents as the
applicable Collateral Agent deems necessary for such new Subsidiary to grant to
such Collateral Agent (for the benefit of the Agents, the applicable Lenders and
the applicable Issuing Banks) a perfected first priority security interest in
the Collateral described in such Collateral Document with respect to such new
Subsidiary. Upon execution and delivery of such documents and agreements, each
such Person (i) shall automatically become a Loan Guarantor hereunder and
thereupon shall have all of the rights, benefits, duties, and obligations in
such capacity under the Loan Documents and (ii) will grant Liens to the
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applicable Lenders and the applicable Issuing Banks) in any property of such
Loan Party which constitutes Collateral, including any parcel of real property
located in the U.S. owned by such Loan Party.
(b) (i) The Company and each Subsidiary that is a US Loan Party will cause
(a) 100% (or such lesser percentage owned by the Company or such US Loan Party,
as applicable) of the issued and outstanding Equity Interests of each of its
direct domestic Subsidiaries and (b) 65% (or such greater percentage that, due
to a change in applicable law after the date hereof, (1) could not reasonably be
expected to cause the undistributed earnings of such foreign Subsidiary as
determined for U.S. federal income tax purposes to be treated as a deemed
dividend to such foreign Subsidiary’s U.S. parent and (2) could not reasonably
be expected to cause any other material adverse tax consequences) of the issued
and outstanding Equity Interests entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity
Interests not entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) in each foreign Subsidiary directly owned by the Company
or any US Loan Party to be subject at all times to a first priority, perfected
Lien in favor of the US Collateral Agent pursuant to the terms and conditions of
the Loan Documents or other security documents as the Administrative Agent shall
reasonably request and (ii) subject to applicable law, each Subsidiary of the
Company that is a Foreign Loan Party (other than any Account Party) will cause
100% of the issued and outstanding Equity Interests of each of its direct
Subsidiaries that is organized in the same jurisdiction as such Foreign Loan
Party to be subject at all times to a first priority, perfected Lien in favor of
the applicable Collateral Agent pursuant to the terms and conditions of the Loan
Documents or other security documents as the Administrative Agent shall
reasonably request.
(c) Without limiting the foregoing, subject to applicable law, each Loan Party
will and will cause each Subsidiary to execute and deliver, or cause to be
executed and delivered, to the Administrative Agent and each Collateral Agent
such documents, agreements and instruments, and will take or cause to be taken
such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust, hypothecs and other
documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by law or which the
Administrative Agent or any Collateral Agent may, from time to time, reasonably
request to carry out the terms and conditions of this Agreement and the other
Loan Documents and to ensure perfection and priority of the Liens created or
intended to be created by the Collateral Documents, all at the expense of the
Loan Parties (including, for the avoidance of doubt, to reflect any change in
the Secured Parties hereunder). In addition, each Loan Party will execute and
deliver, or cause to be executed and delivered, to the Administrative Agent and
each Collateral Agent filings with any governmental recording or registration
office in any jurisdiction required by the Administrative Agent or any
Collateral Agent, in the exercise of its Permitted Discretion, in order to
perfect or protect the Liens of the applicable Collateral Agent granted under
any Collateral Document in any Intellectual Property.
(d) If any material assets (including any real property or improvements thereto
or any interest therein) are acquired by the Company or any Subsidiary that is a
Loan Party (or (x) any deposit accounts opened by any Subsidiary of the Company
organized under the laws of any member state of the European Union or (y) any
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of the Company organized under the laws of any member state of the European
Union are determined by the European Administrative Agent, in its Permitted
Discretion, to comprise part of the European Borrower’s cash structure) after
the Effective Date (other than assets constituting Collateral under the Security
Agreement that become subject to the Lien in favor of the Agents, the applicable
Lenders and the applicable Issuing Banks upon acquisition thereof), the Company
will notify the Administrative Agent and the Lenders thereof, the Borrower will
promptly cause such assets (in the case of any deposit accounts referred to
above, solely to the extent the European Administrative Agent determines such
deposit accounts are part of the European Borrower’s cash structure) to be
subjected to a Lien securing the applicable Secured Obligations and will take,
and cause its Subsidiaries that are Loan Parties to take, such actions as shall
be necessary or reasonably requested by the Administrative Agent or any
Collateral Agent to grant and perfect such Liens, including actions described in
paragraph (c) of this Section and Section 4.01(o), all at the expense of the
Loan Parties.
(e) For the purposes of Section 5.14(c) and 5.14(d), (i) references to the
actions and deliverables required under Section 4.01(o)(i) with respect to any
applicable hereafter-acquired property shall be deemed to require delivery of
Mortgages on such property, including evidence that a counterpart of such
Mortgage has been recorded in the place necessary, in the Administrative Agent’s
judgment, to create a valid and enforceable first priority Lien in favor of the
US Collateral Agent for the benefit of itself and the Lenders; (ii) references
to “date-down” endorsements (or modifications) in Section 4.01(o)(ii) shall
refer to ALTA or other mortgagee’s title insurance policies, together with such
endorsements thereto as may be required by the applicable Collateral Agent; and
(iii) Mortgages filed pursuant to this Section 5.14 shall be delivered to the
applicable Collateral Agent in conjunction with an ALTA survey prepared of such
Mortgaged Property and certified to the applicable Collateral Agent by a
surveyor acceptable to the Administrative Agent.
SECTION 5.15 Financial Assistance. (a) Each Netherlands Loan Party and its
Subsidiaries shall comply in all respects with applicable legislation governing
financial assistance, including Sections 2:98C and 2:207C of the Dutch Civil
Code. Each Canadian Loan Party, UK Loan Party and German Loan Party shall comply
in all respects with applicable legislation governing financial assistance
and/or capital maintenance, as applicable.
(b) The obligations of the Norwegian Loan Parties hereunder shall be limited, if
(and only if) required by the provisions as set out in the Norwegian Private
Limited Liability Companies Act 1997, regulating unlawful financial assistance
and other prohibited loans, guarantees and joint and several liability and it is
understood that the liability of the Norwegian Loan Parties hereunder only
applies to the extent permitted by the provisions of the Norwegian Private
Limited Liability Companies Act.
SECTION 5.16 Collateral Access Agreements and Deposit Account Control
Agreements. The Borrowers shall (i) use their commercially reasonable efforts to
deliver to the Administrative Agent any Collateral Access Agreements required
pursuant to the Security Agreements and (ii) deliver to the Administrative Agent
any Deposit Account Control Agreement required to be delivered pursuant to any
Security Agreement, in each case, in form and substance reasonably acceptable to
the Administrative Agent.

 

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SECTION 5.17 Transfer of Accounts of Specified European Loan Parties. At any
time following the occurrence of a European Account Transfer Trigger Event, at
the request of the European Administrative Agent in its sole discretion, the
Specified European Loan Parties shall either (i) immediately cause all of their
deposit accounts to be transferred to the name of the European Administrative
Agent or (ii) to the extent such deposit accounts cannot be transferred to the
European Administrative Agent, promptly open new deposit accounts with (and in
the name of) the European Administrative Agent, and the Specified European Loan
Parties shall ensure that all monies owing to them will immediately be
re-directed to the transferred or new accounts held by the European
Administrative Agent.
SECTION 5.18 European Cash Management. (a) Except as otherwise provided in this
Agreement or any other Loan Document (including pursuant to Section 2.10(b)),
the Company and each Specified European Loan Party will, and will cause each of
their Subsidiaries to, ensure that all cash collections (other than any
Specified Cash Collections) of such entity continue to be swept (whether
directly or indirectly) or otherwise deposited into the Collection Accounts of
the Specified European Loan Parties in substantially the same manner as in
effect on the date hereof (after giving effect to the Transactions).
(b) On the 15th day of each calendar month (or, if such date is not a Business
Day, on the first Business Day thereafter) (the “Transfer Date”), the European
Borrower shall deposit, or shall cause to be deposited, the Netherlands
Intercompany Receivable Amount (calculated as of the Transfer Date), if any,
into a Collection Account of the European Borrower.
SECTION 5.19 Post-Closing Obligations. (a) On or prior to the date that is
60 days following the Effective Date, the European Borrower shall provide the
European Collateral Agent with a status report with respect to each of the bank
accounts set forth on Schedule 5.19(a) (the “Scheduled Bank Accounts”), each of
which are currently expected to be closed on or prior to such date. To the
extent any Scheduled Bank Accounts remain open on such date, the European
Borrower shall provide the European Collateral Agent with a similar status
report on each 30-day anniversary thereof (each, a “Reporting Date”) until the
date that all Scheduled Bank Accounts are either closed or subject to a first
priority security interest in favor of the European Collateral Agent, for the
benefit of the Agents, the applicable Lenders and the applicable Issuing Banks,
as described below. The European Borrower and/or each other Loan Party holding
any applicable Scheduled Bank Account shall, at the European Collateral Agent’s
request delivered on or prior to the date that is five Business Days following
any Reporting Date, (i) deliver to the European Collateral Agent, each in form
and substance reasonably satisfactory to the European Collateral Agent, one or
more security agreements pursuant to which such Loan Party grants a security
interest to the European Collateral Agent, for the benefit of the Agents, the
applicable Lenders and the applicable Issuing Banks, in each Scheduled Bank
Account that remains open as of such date and has been designated by the
European Collateral Agent, (ii) deliver all notices required to be delivered
pursuant to any such security agreement to any banking institution at which any
such account is held, (iii) use commercially reasonable efforts to procure any
acknowledgments of any such banking institution required pursuant to any such
security agreement, (iv) take all actions which may be required by law or which
the Administrative Agent or the European Collateral Agent may reasonably request
to ensure perfection of the Liens created or intended to be created by any such
security agreement, prior and superior in right to any other Person and
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and the applicable Issuing Banks an opinion of counsel, in form and substance
reasonably satisfactory to the Administrative Agent, stating that each such
security agreement shall constitute a fully perfected Lien on, and security
interest in, each such Scheduled Bank Account, in the case of each of clauses
(i) through (v) above, within 30 days (or such later date agreed to by the
European Collateral Agent) of receipt of such request.
(b) On or prior to the date that is 30 days following the Effective Date (or
such later date as the Administrative Agent may approve in its sole discretion),
deliver to the Administrative Agent the Deposit Account Control Agreement listed
on Schedule 5.19(b).
(c) Juicy Couture Ireland Limited shall use commercially reasonable efforts to
procure, within 30 days of the execution of the Irish Debenture (or such later
date agreed to by the European Collateral Agent (it being understood that the
European Collateral Agent may, in its sole discretion, waive the requirements
set forth in this Section 5.19(c))), the consent from Value Retail Dublin
Limited necessary to fully effect the charge given under clause 3.5 of the Irish
Debenture in respect of the agreement for license relating to part of Kildare
Village dated 27 January 2009 and the license relating to part of Kildare
Village dated 27 January 2009.
(d) Liz Claiborne Europe shall use commercially reasonable efforts, on or prior
to the date that is 60 days following the Effective Date (or such later date
agreed to by the European Collateral Agent in its sole discretion), to
(x) implement a blocked account mechanism or other mechanism, in each case,
reasonably satisfactory to the European Collateral Agent, in respect of each of
the accounts of Liz Claiborne Europe as the European Collateral Agent shall
determine (in its sole discretion) to be a Collection Account, and (y) deliver
to the European Collateral Agent (A) documentation, in form and substance
reasonably satisfactory to the European Collateral Agent, granting a first
priority fixed charge over each such Collection Account in favor of the European
Collateral Agent and (B) an opinion of counsel, in form and substance reasonably
satisfactory to the Administrative Agent, stating that such documentation shall
constitute a fully perfected Lien on, and security interest in, each such
account. In the event that Liz Claiborne Europe shall fail to deliver such
documentation on or prior to such date referred to above after the use of
commercially reasonable efforts to do so, the assets of Liz Claiborne Europe
shall be excluded from any Borrowing Base.
(e) On or prior to the dates specified on Schedule 5.19(e), the Company will
take, or cause to be taken, the actions specified on Schedule 5.19(e).
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees, expenses and other amounts payable under any
Loan Document have been paid in full in cash and all Letters of Credit have
expired or terminated (or have been cash collateralized in accordance with
Section 2.06(j) hereof) and all LC Disbursements shall have been reimbursed, the
Loan Parties covenant and agree, jointly and severally, with the Lenders that:

 

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SECTION 6.01 Indebtedness. No Loan Party will, nor will it permit any of its
Subsidiaries to, create, incur or suffer to exist any Indebtedness, except:
(a) the Secured Obligations;
(b) Indebtedness existing on the date hereof and set forth on Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness in accordance
with clause (f) hereof;
(c) Indebtedness of any Borrower to any Subsidiary or any other Borrower and of
any Subsidiary to any Borrower or any other Subsidiary; provided that
(i) Indebtedness of any Subsidiary that is not a Loan Party to any Borrower or
any Subsidiary that is a Loan Party shall be subject to Section 6.04(d),
Section 6.04(f) and Section 6.04(g) and (ii) Indebtedness of any Borrower to any
Subsidiary and Indebtedness of any Subsidiary that is a Loan Party to any
Borrower or to any other Subsidiary that is not a Loan Party shall be
subordinated to the Secured Obligations on terms reasonably satisfactory to the
Administrative Agent;
(d) Guarantees by any Borrower of Indebtedness of any Subsidiary or any other
Borrower and by any Subsidiary of Indebtedness of any Borrower or any other
Subsidiary; provided that (i) the Indebtedness so Guaranteed is permitted by
this Section 6.01, (ii) Guarantees by any Borrower or any Subsidiary that is a
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be
subject to Section 6.04(e) and (iii) Guarantees permitted under this clause
(d) shall be subordinated to the Secured Obligations of the applicable
Subsidiary if, and on the same terms as, the Indebtedness so Guaranteed is
subordinated to the Secured Obligations;
(e) Indebtedness of any Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof; provided that (i) such Indebtedness is incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this paragraph (e) shall not exceed $100,000,000 at any time outstanding;
(f) Indebtedness which represents an extension, refinancing, replacement or
renewal of any of the Indebtedness described in paragraphs (b), (e), (i), (j),
(k), (m) and (s) of this Section 6.01; provided that, unless otherwise expressly
permitted by this Section 6.01, (i) the principal amount (or accreted value, if
applicable) thereof does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, replaced or renewed,
(ii) any Liens securing such Indebtedness are not extended to any additional
property of any Loan Party or any of their respective Subsidiaries, (iii) no
Loan Party or Subsidiary of any Loan Party that is not originally obligated with
respect to repayment of such Indebtedness is required to become obligated with
respect thereto (except as would otherwise be permitted pursuant to clause (d)

 

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above), (iv) such extension, refinancing, replacement or renewal does not result
in a shortening of the average weighted maturity of the Indebtedness so
extended, refinanced, replaced or renewed and (v) if the Indebtedness that is
refinanced, replaced, renewed, or extended was subordinated in right of payment
to the Secured Obligations, then the terms and conditions of the refinancing,
replacement, renewal, or extension Indebtedness must include subordination terms
and conditions that are at least as favorable to the Administrative Agent and
the Lenders as those that were applicable to the refinanced, replaced, renewed,
or extended Indebtedness;
(g) Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;
(h) Indebtedness of any Borrower or any Subsidiary in respect of performance
bonds, bid bonds, appeal bonds, custom broker bonds, surety bonds and similar
obligations, in each case provided in the ordinary course of business;
(i) Indebtedness of the Company or any other US Loan Party; provided that both
immediately before and immediately after giving pro forma effect thereto (i) no
Default or Event of Default shall have occurred and be continuing and (ii) the
Fixed Charge Coverage Ratio for the Test Period in effect at the time such
Indebtedness is to be incurred, calculated on a Pro Forma Basis, shall be at
least 1.25 to 1.00); provided further that the aggregate principal amount of
Indebtedness permitted by this paragraph (i) shall not exceed $200,000,000 at
any one time outstanding;
(j) Indebtedness of Foreign Subsidiaries that are not Loan Parties; provided
that the aggregate principal amount of Indebtedness permitted by this paragraph
(j) shall not exceed $50,000,000 at any time outstanding;
(k) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (ii) the aggregate principal amount of
Indebtedness permitted by this paragraph (k) shall not exceed $50,000,000 at any
time outstanding;
(l) (x) Indebtedness in respect of the Existing Euro Notes and (y) Indebtedness
which represents an extension, refinancing, replacement or renewal thereof
(including any Guarantees thereof to the extent permitted pursuant to the
following proviso) (the “Euro Notes Refinancing Debt”); provided that, (i) the
principal amount (or accreted value, if applicable) of the Euro Notes
Refinancing Debt does not exceed the principal amount (or accreted value, if
applicable) of the Existing Euro Notes so extended, refinanced, replaced or
renewed, plus, in the case of any Euro Notes Refinancing Debt that constitutes
Trademark Secured Debt, any additional amounts such that, after making the
prepayments required to be made pursuant to Section 2.11(f), the Net Proceeds of
such issuance of Euro Notes Refinancing Debt remaining shall not exceed the
principal amount (or accreted value, if applicable) of the Existing Euro Notes

 

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so extended, refinanced, replaced or renewed, (ii) such Euro Notes Refinancing
Debt shall be either (A) unsecured or (B) secured by Liens on assets that do not
constitute Collateral (other than Trademarks to the extent permitted pursuant to
Section 6.02(p)) and are otherwise permitted pursuant to Section 6.02, and
(iii) such Euro Notes Refinancing Debt does not have a shorter average weighted
maturity than the Existing Euro Notes;
(m) Indebtedness in respect of the Synthetic Lease Documentation;
(n) Capital Lease Obligations in connection with sale and leaseback transactions
permitted pursuant to Section 6.14;
(o) Indebtedness of any German Loan Party under (i) direct pension commitments
or (ii) old-age part-time arrangements, to the extent such German Loan Party is
required by applicable law to enter into such old-age part-time arrangements;
provided that statutory insolvency protection measures for liabilities under
(i) and (ii) are fulfilled;
(p) earn-out obligations pursuant to the Mac & Jac Purchase Agreement in an
aggregate amount not to exceed $20,000,000;
(q) a Guarantee granted pursuant to a declaration of joint and several liability
used for the purpose of Section 2:403 of the Dutch Civil Code (Burgerlijk
Wetboek) (and any residual liability under such declaration arising pursuant to
section 2:404(2) of the Dutch Civil Code) by a Netherlands Loan Party;
(r) any joint and several liability arising under any fiscal unity (fiscale
eenheid) between the Netherlands Group Members;
(s) Indebtedness in respect of the Existing Convertible Notes;
(t) other unsecured Indebtedness not otherwise permitted by this Section 6.01;
provided the aggregate principal amount of all Indebtedness permitted by this
paragraph (t) shall not exceed $150,000,000 at any time outstanding;
(u) unsecured Guarantees permitted by Section 6.04(s); and
(v) Indebtedness of the European Borrower incurred pursuant to the Unitex
Agreement, in an aggregate principal amount, when added to the fair market value
of all Accounts sold pursuant to Section 6.05(o) for which payment from the
account debtor is not yet due (based on the payment terms in effect when the
Account was sold), not to exceed $2,500,000 at any time outstanding.
SECTION 6.02 Liens. No Loan Party will, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:

 

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(a) Liens created pursuant to any Loan Document;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of any Borrower or any Subsidiary existing
on the date hereof and set forth on Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of such Borrower or Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof except to the extent permitted
by clause (f) of Section 6.01;
(d) Liens on fixed or capital assets acquired, constructed or improved by any
Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
such Borrower or Subsidiary or any other Borrower or Subsidiary;
(e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by any Borrower or any Subsidiary or
existing on any property or asset (other than Accounts and Inventory) of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of such Borrower or Subsidiary or any other Borrower or
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof except to the
extent permitted by clause (f) of Section 6.01;
(f) Liens (i) of a collecting bank arising in the ordinary course of business
under Section 4-210 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon or (ii) in favor of a
banking institution arising as a matter of law, encumbering amounts credited to
deposit or securities accounts (including the right of set-off) and which are
within the general parameters customary in the banking industry;
(g) Liens arising out of sale and leaseback transactions permitted pursuant to
Section 6.14;
(h) Liens granted by a Subsidiary that is not a Loan Party in favor of any
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary;
(i) Liens securing Indebtedness permitted by Section 6.01(i) in an aggregate
amount not to exceed $75,000,000 at any time outstanding;

 

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(j) Liens securing Indebtedness permitted by Section 6.01(j); provided that such
Lien shall only apply to the property of the applicable Foreign Subsidiary;
(k) Liens securing Indebtedness permitted pursuant to Section 6.01(m); provided
that such Lien shall not apply to any property or assets of the Company or any
Subsidiary other than (i) the real property subject to such Lien on the Original
Effective Date (prior to giving effect to the Existing Credit Agreement) and
(ii) Liens on the Collateral, subject to the Intercreditor Agreement;
(l) Liens securing Indebtedness permitted pursuant to Section 6.01(o), to the
extent required by mandatory law; provided that such Lien shall only apply to
the property of the applicable German Loan Party
(m) Liens relating to pooled deposit or sweep accounts of the European Borrower
and its Affiliates to the extent permitted under the applicable European
Security Agreement;
(n) Liens not otherwise permitted by this Section 6.02 so long as (i) neither
(A) the aggregate outstanding principal amount of the obligations secured
thereby nor (B) the aggregate fair market value (determined as of the date such
Lien is incurred) of the assets subject thereto exceeds (as to the Borrowers and
all Subsidiaries) $25,000,000 at any one time and (ii) such Liens do not cover
any Collateral other than any non-consensual Liens arising by operation of law;
(o) Liens arising from any purchase option with respect to the Option Assets
under the JCPenney License Agreement;
(p) Liens on Trademarks of the US Loan Parties and Liens on the Mexx Trademark,
in each case securing Indebtedness of the Company or any other US Loan Party
permitted pursuant to Section 6.01 (the “Trademark Secured Debt”) in an
aggregate amount of not less than $150,000,000; provided that (x) the Net
Proceeds received by the Company and its Subsidiaries in connection with such
Indebtedness shall be used to prepay the Loans in accordance with
Section 2.11(f), (y) such Liens may be first priority Liens so long as such
Trademarks and/or the Mexx Trademark, as applicable, shall be subject to a
second priority perfected security interest in favor of the applicable
Collateral Agent (for the benefit of the Agents, the applicable Lenders and the
applicable Issuing Banks) and such Liens shall be subject to an intercreditor
agreement reasonably satisfactory to the Administrative Agent and (z) the
Administrative Agent and the applicable Collateral Agents shall have been
granted a non-exclusive royalty free license with respect to such Trademarks
and/or the Mexx Trademark, as applicable, to the extent any such Trademarks
and/or the Mexx Trademark, as applicable, are used in connection with any
Collateral;
(q) Liens on the Alabama Property arising from the grant by the Company of an
option to purchase such property;
(r) Liens on Accounts of the European Borrower with an aggregate value of no
more than $2,500,000 securing Indebtedness permitted pursuant to
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(s) Liens on the Collateral (other than the Trademarks referred to in clause
(p) above) (the “Permitted Second Priority Liens”) securing the Trademark
Secured Debt; provided that (x) the Net Proceeds received by the Company and its
Subsidiaries in connection with such Indebtedness shall be used to prepay the
Loans in accordance with Section 2.11(f), (y) such Liens shall be junior to the
liens granted pursuant to the Loan Documents to the applicable Collateral Agent,
for the benefit of the Agents, the applicable Lenders and the applicable Issuing
Banks, and shall be subject to an intercreditor agreement reasonably
satisfactory to the Required Lenders and (z) the applicable Collateral Agent(s)
shall have been granted a second priority perfected Lien, for the benefit of the
Agents, the applicable Lenders and the applicable Issuing Banks, in any
collateral securing the Trademark Secured Debt that does not otherwise
constitute Collateral.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (i) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrance and
clauses (a), (r) and (s) above, (ii) Inventory, other than those permitted under
clauses (a) and (b) of the definition of Permitted Encumbrance and clauses
(a) and (s) above, (iii) real property subject to a Mortgage, other than those
permitted under clauses (a), (b), (f) and (g) of the definition of Permitted
Encumbrance and clauses (a), (g) and (s) above, (iv) Trademarks of the US Loan
Parties, other than those permitted under clause (a) of the definition of
Permitted Encumbrance and clauses (a), (p) and (s) above, or, in each case,
other than as provided in Section 6.02(k). Notwithstanding anything to the
contrary contained in this Agreement or any Collateral Document (including any
provision for, reference to, or acknowledgement of, any Lien or Permitted Lien),
nothing herein and no approval by the Administrative Agent, any Collateral Agent
or the Lenders of any Lien or Permitted Lien (whether such approval is oral or
in writing) shall be construed as or deemed to constitute a subordination by the
Administrative Agent, any Collateral Agent or the Lenders of any security
interest or other right, interest or Lien in or to the Collateral or any part
thereof in favor of any Lien or Permitted Lien or any holder of any Lien or
Permitted Lien.
SECTION 6.03 Fundamental Changes. (a) No Loan Party will, nor will it permit any
of its Subsidiaries to, amalgamate with, merge into or consolidate with any
other Person, or permit any other Person to amalgamate with, merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Event of Default shall
have occurred and be continuing (i) any Subsidiary of a Borrower may merge or
amalgamate into a Borrower in a transaction in which such Borrower continues or
is the surviving entity and assumes all obligations of such Borrower under the
Loan Documents, (ii) any Loan Party (other than a Borrower) may merge or
amalgamate into or with any Loan Party (other than a Borrower) in a transaction
in which a Loan Party continues or is the surviving entity and assumes all
obligations of the Loan Party under the Loan Documents, (iii) any Subsidiary may
transfer its assets to a Loan Party and any Subsidiary which is a non-Loan Party
may transfer its assets to a non-Loan Party, (iv) any Subsidiary may liquidate
or dissolve if (x) the Company determines in good faith that such liquidation or
dissolution is in the best interests of the Company and is not materially
disadvantageous to the Lenders and (y) in connection with any such dissolution
of a Loan Party, all of the material assets of such Loan Party are transferred
to another Loan Party (it being understood that any transfer of assets to an
entity that is not a Loan Party must be separately permitted pursuant to
Section 6.04), and (v) any non-Loan Party

 

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may merge into, amalgamate with or consolidate with, another non-Loan Party;
provided that any such merger, amalgamation or consolidation involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger,
amalgamation or consolidation shall not be permitted unless also permitted by
Section 6.04.
(b) No Loan Party will, nor will it permit any of its Subsidiaries to, engage in
any business other than businesses of the type conducted by the Company and its
Subsidiaries on the Effective Date and businesses reasonably related or
incidental thereto (including the provision of services).
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any of its Subsidiaries to, purchase, hold or
acquire (including pursuant to any merger or amalgamation with any Person that
was not a Loan Party and a wholly owned Subsidiary prior to such merger or
amalgamation) any Equity Interests, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit (whether through purchase of assets, merger, amalgamation or otherwise),
except:
(a) Permitted Investments, subject to, in the case of Loan Parties, control
agreements in favor of the applicable Collateral Agent (in each case for the
benefit of the applicable Agents, the applicable Lenders and the applicable
Issuing Banks) or otherwise subject to a perfected security interest in favor of
the applicable Collateral Agent (in each case for the benefit of the applicable
Agents, the applicable Lenders and the applicable Issuing Banks);
(b) investments (and commitments (including consummation of any “put”
arrangement in connection therewith) in respect thereof) in existence on the
date of this Agreement and described on Schedule 6.04 and renewals, replacements
and extensions thereof;
(c) investments by the Loan Parties and their Subsidiaries in Equity Interests
in their respective Subsidiaries; provided that in the case of any investments
made pursuant to this paragraph (c) after the Effective Date by Loan Parties in
Subsidiaries that are not Loan Parties, both immediately before and immediately
after giving pro forma effect thereto, (i) no Default or Event of Default shall
have occurred and be continuing, (ii) the Fixed Charge Coverage Ratio for the
Test Period in effect at the time such investment is to occur shall be at least
1.25 to 1.00 (determined on a Pro Forma Basis in respect of the Test Period in
effect at such time) and (iii) no Level 2 Minimum Aggregate Availability Period
shall be in effect;
(d) loans or advances made by (i) any Borrower to any Subsidiary or any other
Borrower or (ii) any Subsidiary to any Borrower or any other Subsidiary,
provided that in the case of any loans and advances made by Loan Parties to
Subsidiaries that are not Loan Parties, both immediately before and immediately
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thereto, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Fixed Charge Coverage Ratio for the Test Period in effect
at the time such investment is to occur shall be at least 1.25 to 1.00
(determined on a Pro Forma Basis in respect of the Test Period in effect at such
time) and (iii) no Level 2 Minimum Aggregate Availability Period shall be in
effect;
(e) Guarantees constituting Indebtedness permitted by Section 6.01; provided
that in the case of any Indebtedness of Subsidiaries that are not Loan Parties
that is Guaranteed by any Loan Party, both immediately before and immediately
after giving pro forma effect thereto, (i) no Default or Event of Default shall
have occurred and be continuing, (ii) the Fixed Charge Coverage Ratio for the
Test Period in effect at the time such investment is to occur shall be at least
1.25 to 1.00 (determined on a Pro Forma Basis in respect of the Test Period in
effect at such time) and (iii) no Level 2 Minimum Aggregate Availability Period
shall be in effect;
(f) investments made by any Loan Party in any Subsidiary that is not a Loan
Party of the types described in paragraphs (c), (d) and (e) of this
Section 6.04; provided that both immediately before and after giving pro forma
effect thereto, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) no Level 2 Minimum Aggregate Availability Period shall be in
effect; provided further that the aggregate principal amount of all investments
permitted by this paragraph (f) shall not exceed $50,000,000 at any time
outstanding;
(g) investments (including loans and advances) made by any Loan Party in any
Subsidiary that is not a Loan Party; provided that (i) such investments are made
in the ordinary course of business in connection with the Company’s and its
Subsidiaries’ cash management systems and (ii) both immediately before and
immediately after giving pro forma effect thereto, (x) no Default or Event of
Default shall have occurred and be continuing and (y) no Level 2 Minimum
Aggregate Availability Period shall be in effect.
(h) loans or advances made by any Loan Party and the Subsidiaries to their
employees on an arms’-length basis in the ordinary course of business consistent
with past practices for travel and entertainment expenses, relocation costs and
similar purposes up to a maximum of $5,000,000 in the aggregate at any time
outstanding;
(i) subject to the applicable provisions of any Security Agreements (including
Sections 4.2(a) and 4.4 of the US Security Agreement and Sections 4.2(a) and 4.4
of the Canadian Security Agreement, and any comparable provision of any European
Security Agreement, Netherlands Security Agreement, UK Security Agreement or
German Security Agreement), notes payable, or stock or other securities issued
by Account Debtors to any Loan Party pursuant to negotiated agreements with
respect to settlement of such Account Debtor’s Accounts in the ordinary course
of business, consistent with past practices;
(j) investments in the form of Swap Agreements permitted by Section 6.08;

 

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(k) investments of any Person existing at the time such Person becomes a
Subsidiary or consolidates or merges or amalgamates with a Borrower or any
Subsidiary (including in connection with a Permitted Acquisition), so long as
such investments were not made in contemplation of such Person becoming a
Subsidiary or of such consolidation, merger or amalgamation;
(l) investments received in connection with the dispositions of assets permitted
by Section 6.05;
(m) investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;
(n) Permitted Acquisitions; provided that both immediately before and
immediately after giving pro forma effect thereto, (i) no Default or Event of
Default shall have occurred and be continuing and (ii) no Level 2 Minimum
Aggregate Availability Period shall be in effect;
(o) Guarantees by the Company or any of its Subsidiaries of leases (other than
Capital Leases) or of other obligations of the Company or any of its
Subsidiaries that do not constitute Indebtedness, in each case entered into in
the ordinary course of business;
(p) investments of the assets of Kate Spade LLC in a joint venture organized
under the laws of Japan; provided that both immediately before and immediately
after giving pro forma effect thereto no Default or Event of Default shall have
occurred and be continuing; provided further that the aggregate principal amount
of all investments permitted by this paragraph (p) shall not exceed $20,000,000;
(q) purchases of additional Equity Interests in Lucky Brand Dungarees, Inc.
pursuant to the Lucky Brand Purchase Agreement in an aggregate amount not to
exceed $15,000,000;
(r) other investments not otherwise permitted by this Section 6.04; provided
that both immediately before and immediately after giving pro forma effect
thereto, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Fixed Charge Coverage Ratio for the Test Period in effect
at the time such investment is to occur shall be at least 1.25 to 1.00
(determined on a Pro Forma Basis in respect of the Test Period in effect at such
time) and (iii) no Level 2 Minimum Aggregate Availability Period shall be in
effect; provided further that the aggregate principal amount of all investments
permitted by this paragraph (r) shall not exceed $75,000,000 in any fiscal year
of the Company;
(s) purchases of additional Equity Interests in Kate Spade Japan Co., Ltd. (such
Equity Interests, the “Acquired JV Interests”) pursuant to Article VI of the
Kate Spade JV Agreement in an aggregate amount not to exceed $50,000,000 and any
unsecured Guarantee by the Company in respect thereof; provided that in the case
of any purchases made or any guarantee performed pursuant to this paragraph (s),
both immediately before and immediately after giving pro forma effect to such
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performance, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Aggregate Availability shall not be less than
$75,000,000; and
(t) unsecured Guarantees by the Company or any Subsidiary of obligations
pursuant to leases assigned to third parties pursuant to Section 6.05(p),
entered into in the ordinary course of business;
provided that, in the event that any investment, loan or advance is made in any
Person through substantially concurrent interim transfers of any amount through
one or more other Subsidiaries, then such other substantially concurrent interim
transfers shall be disregarded for purposes of this Section 6.04.
SECTION 6.05 Asset Sales. No Loan Party will, nor will it permit any of its
Subsidiaries to, sell, transfer, assign, lease or otherwise dispose of any
asset, rights, or properties, including any Equity Interest owned by it, nor
will any Borrower permit any Subsidiary to issue any additional Equity Interest
in such Subsidiary (other than to another Borrower or another Subsidiary in
compliance with Section 6.04), except:
(a) sales, transfers and dispositions of (i) inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property in
the ordinary course of business;
(b) sales, transfers and dispositions to any Borrower or any Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Loan Party shall be made in compliance with Section 6.10 and 6.04;
(c) sales, transfers and dispositions of accounts receivable in connection with
the compromise, settlement or collection thereof;
(d) sales, transfers and dispositions of investments permitted by clauses (g),
(i) and (j) of Section 6.04;
(e) sale and leaseback transactions permitted pursuant to Section 6.14;
(f) dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of any Borrower or any Subsidiary;
(g) sales, transfers and other dispositions of assets that are not permitted by
any other paragraph of this Section; provided that (i) the aggregate fair market
value of all assets sold, transferred or otherwise disposed of in reliance upon
this paragraph (g) shall not exceed an amount equal to 15% of Total Assets and
(ii) the Net Proceeds received from any such sales, transfers or other
dispositions are used to prepay Loans in accordance with Section 2.11(c);
(h) licenses of Intellectual Property entered into by the Company or a
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(i) Restricted Payments permitted by Section 6.09;
(j) dispositions of cash and Permitted Investments in the ordinary course of
business or in connection with a transaction otherwise permitted under this
Agreement;
(k) dispositions of cash and property permitted by Section 6.04(g);
(l) the sale of the Option Assets pursuant to the terms of the JCPenney License
Agreement (the date of the consummation of such sale, the “Trademark Disposition
Date”); provided that (i) the aggregate cash consideration received by the
Company on the Trademark Disposition Date in respect of such sale shall be the
required amounts set forth in Section 5.3 of the JCPenney License Agreement and
(ii) the Net Proceeds received by the Company and its Subsidiaries on the
Trademark Disposition Date from such sale shall be used to prepay the Loans in
accordance with Section 2.11(c);
(m) the sale of the Rhode Island Property or the Ohio Property; provided that in
connection with any such sale, the Company and/or any of its Subsidiaries shall
have repaid the Synthetic Lease Obligations in an amount equal to or greater
than the lesser of (x) the outstanding Synthetic Lease Obligations and (y) the
Net Proceeds of such sale, on or prior to the date that is one Business Day
following receipt thereof by the Company and/or any of its Subsidiaries;
(n) dispositions of property permitted by Section 6.04(p);
(o) the transfer of Accounts of the European Borrower pursuant to the Unitex
Agreement; provided that the fair market value of all Accounts sold pursuant to
this clause (o) for which payment from the account debtor is not yet due (based
on the payment terms in effect when the Account was sold), together with the
aggregate principal amount of Indebtedness incurred pursuant to Section 6.01(v)
outstanding, shall not exceed $2,500,000 in the aggregate at any time;
(p) the sale, transfer or assignment of leased real property, together with
fixtures and equipment located on such real property, in each case in connection
with store closures in the ordinary course of business; and
(q) the sale of the Alabama Property or the Pennsylvania Property; provided, in
each case, that the Net Proceeds received from any such sale are used to prepay
Loans in accordance with Section 2.11(c);
provided that all sales, transfers, leases and other dispositions permitted
hereby permitted by paragraphs (b) (to the extent the applicable transaction is
not solely among Loan Parties), (e), (g), (h), (i), (j), (k), (l), (m), (o),
(p) and (q) above shall be made for fair value and (other than with respect to
clause (p)) for at least 75% cash consideration (it being understood that as it
relates solely to the exercise of the “Year 10 Option Period” (as defined in the
JCPenney License Agreement) the payment of the required cash amounts set forth
in Section 5.3 of the JCPenney License Agreement shall satisfy the foregoing
cash consideration requirement).
SECTION 6.06 [Reserved].

 

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SECTION 6.07 [Reserved].
SECTION 6.08 Swap Agreements. No Loan Party will, nor will it permit any of its
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which any Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of any
Subsidiary of the Company), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of any Borrower or any
Subsidiary.
SECTION 6.09 Restricted Payments; Certain Payments of Indebtedness. (a) No Loan
Party will, nor will it permit any of its Subsidiaries to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except
(i) each Loan Party and its Subsidiaries may declare and pay dividends or other
distributions with respect to its common stock payable solely in additional
shares of its common stock, and, with respect to its preferred stock, payable
solely in additional shares of such preferred stock or in shares of its common
stock;
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
Equity Interests;
(iii) the Company may make payments required to be made pursuant to the
Permitted Company Deferral Plan;
(iv) the Company may make Restricted Payments, not exceeding $5,000,000 during
any fiscal year, pursuant to and in accordance with equity incentive plans or
other benefit plans for management or employees of the Company and the
Subsidiaries and for deceased and terminated employees and present and former
directors (including from their estates);
(v) the Company may make Restricted Payments (including in cash), not exceeding
$10,000,000 during any fiscal year; provided that that both immediately before
and immediately after giving pro forma effect thereto, (x) no Default or Event
of Default shall have occurred and be continuing and (y) the Fixed Charge
Coverage Ratio for the Test Period in effect at the time such payment is to
occur shall be at least 1.00 to 1.00 (determined on a Pro Forma Basis in respect
of the Test Period in effect at such time); and
(vi) the Company may make Restricted Payments (including in cash) so long as,
both immediately before and immediately after giving pro forma effect thereto,
(x) no Default or Event of Default shall have occurred and be continuing,
(y) the Fixed Charge Coverage Ratio for the Test Period in effect at the time
such payment is to occur shall be at least 1.25 to 1.00 (determined on a Pro
Forma Basis in respect of the Test Period in effect at such time), and (z) no
Level 2 Minimum Aggregate Availability Period shall be in effect.

 

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(b) No Loan Party will, nor will it permit any of its Subsidiaries to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness (other than the Synthetic Lease Obligations), or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Indebtedness (other than the Synthetic Lease Obligations), except:
(A) payment of Indebtedness created under the Loan Documents;
(B) payment of regularly scheduled interest and principal payments as and when
due in respect of any Indebtedness, other than (x) payments in respect of any
Subordinated Indebtedness prohibited by the subordination provisions thereof
(including, for the avoidance of doubt, the Hong Kong Intercompany Loan and,
except as provided pursuant to clause (H) below, the Hong Kong Intercompany
Receivable and any other Intercompany Services Receivable) and (y) payments or
repayments of any kind which result in a breach of Section 5.15 (Financial
Assistance), including but not limited to any payments (including interest) or
repayments with respect to the Existing Euro Notes and the €293,000,000
intercompany indebtedness between LCI Acquisition U.S. Inc. as lender and Mexx
Europe International B.V. as borrower with the proceeds (directly or indirectly)
of any Borrowings hereunder by the Canadian Borrower, the UK Borrower or the
European Borrower;
(C) refinancings, replacements and renewals of Indebtedness to the extent
permitted by Section 6.01;
(D) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
(E) payment of Indebtedness owed to the Company or any Group Member;
(F) payment of Indebtedness owed by non-Loan Parties to Loan Parties;
(G) prepayments or repurchases of the Existing Euro Notes or the Existing
Convertible Notes in an aggregate amount not to exceed $50,000,000 in any fiscal
year of the Company; provided that (i) both immediately before and immediately
after giving pro forma effect thereto, (x) no Default or Event of Default shall
have occurred and be continuing and (y) Aggregate Availability shall not have
been less than the greater of (i) $109,375,000 and (ii) an amount equal to
31.25% of the Commitments then in effect at any time during the three-month
period immediately

 

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preceding such prepayment or repurchase and (ii) in no event shall any such
prepayments or repurchases of the Existing Euro Notes be made with proceeds of
European Loans, UK Loans or Canadian Loans hereunder;
(H) payments to (x) Liz Claiborne International Limited in respect of the Hong
Kong Intercompany Receivable or (y) any other non-Loan Party in respect of any
Intercompany Services Receivable, in each case, the proceeds of which shall be
used to pay (i) the applicable payee’s operating costs and expenses and other
corporate overhead costs and expenses which are reasonable and customary, in
each case incurred in the ordinary course of business, consistent with past
practice, (ii) franchise and excise taxes and other fees, taxes and expenses
required to maintain such payee’s corporate existence, (iii) customary salary,
bonus and other benefits payable to officers and employees of such payee,
consistent with past practice or (iv) taxes that are due and payable by such
payee;
(I) prepayments or repurchases of the Existing Euro Notes and/or the Existing
Convertible Notes with the Net Proceeds of (i) any capital contributions made to
the Company, (ii) any issuance of common stock of the Company, (iii) any
incurrence of Subordinated Indebtedness of the Company or any Subsidiary,
(iv) any asset sale permitted pursuant to Section 6.05(g), and (iv) any
incurrence of Indebtedness described in Section 6.02(p); provided that (x) both
immediately before and immediately after giving pro forma effect thereto, (1) no
Default or Event of Default shall have occurred and be continuing and
(2) Aggregate Availability shall not have been less than the greater of (A)
$109,375,000 and (B) an amount equal to 31.25% of the Commitments then in effect
at any time during the three-month period immediately preceding such prepayment
or repurchase, and (y) any Net Proceeds received by the Company and its
Subsidiaries in connection with such Subordinated Indebtedness, Indebtedness,
asset sale, issuance of common stock or capital contribution are first applied
to prepay the Loans in full in accordance with Section 2.11(a) (or in the case
of any such Indebtedness described in clause (iv) above, Section 2.11(f) or, in
the case of asset sales described in clause (iv) above, Section 2.11(c));
(J) payment of the cash portion of the settlement amount required to be paid to
any holder of Existing Convertible Notes upon the conversion thereof in
accordance with the terms of the Existing Convertible Note Documents; provided
that both immediately before and immediately after giving pro forma effect
thereto, no Default or Event of Default shall have occurred and be continuing;
(K) other payments in respect of Indebtedness; provided (i) that both
immediately before and immediately after giving pro forma effect thereto, (x) no
Default or Event of Default shall have occurred and be continuing, (y) the Fixed
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effect at the time such payment is to occur shall be at least 1.25 to 1.00
(determined on a Pro Forma Basis in respect of the Test Period in effect at such
time) and (z) no Level 2 Minimum Aggregate Availability Period shall be in
effect and (ii) in no event shall any payments or repayments of any kind be made
with respect to the Existing Euro Notes with proceeds of European Loans, UK
Loans or Canadian Loans hereunder;
(L) conversion of the Existing Convertible Notes into equity in accordance with
the terms of the Existing Convertible Note Documents; and
(M) repurchase or exchange of the Existing Euro Notes with common stock of the
Company.
SECTION 6.10 Transactions with Affiliates. No Loan Party will, nor will it
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions that are at prices and on terms and
conditions not less favorable to such Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions
between or among any Borrower and any Subsidiary not involving any other
Affiliate, (c) any loans, advances, Guarantees and other investments permitted
by Section 6.04(c), (d) or (e), (d) any Indebtedness permitted under Section
6.01(c) or (d), (e) any Restricted Payment permitted by Section 6.09, (f) loans
or advances to employees permitted under Section 6.04, (g) the payment of
reasonable fees to directors of any Borrower or any Subsidiary who are not
employees of such Borrower or Subsidiary, and compensation and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of the Borrowers or their Subsidiaries in the ordinary
course of business and (h) any issuances of securities or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements, stock options, equity incentive and stock ownership plans
approved by a Borrower’s or Subsidiary’s board of directors.
SECTION 6.11 Restrictive Agreements. No Loan Party will, nor will it permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of such Loan Party or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its material
(individually or in the aggregate) property or assets, or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares of
its Equity Interests or to make or repay loans or advances to any Borrower or
any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other
Subsidiary; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by any Loan Document, (ii) the foregoing shall not
apply to restrictions and conditions imposed on the Loan Parties existing on the
date hereof identified on Schedule 6.11 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary or assets pending such sale, provided that such restrictions and
conditions apply only to the Subsidiary or assets that is to be sold and such
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hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not
apply to restrictions on the pledge of Equity Interests in Kate Spade Japan Co.,
Ltd. pursuant to the Kate Spade JV Agreement, and (vi) clause (a) of the
foregoing shall not apply to customary restrictions set forth in license
agreements in the ordinary course of business so long as such provisions do not
prohibit, restrict or impose any condition upon the ability of such Loan Party
or any of its Subsidiaries to (x) create, incur or permit to exist Liens upon
its property or assets in favor of any Agent, for the benefit of the applicable
Lenders and Issuing Banks or (y) dispose of the Collateral or restrict any
Agent’s method and price for disposing of Collateral (other than any such
restrictions set forth in the Existing Donna Karan License).
SECTION 6.12 Amendment of Material Documents. No Loan Party will, nor will it
permit any of its Subsidiaries to, amend, modify or waive any of its rights
under (a) any agreement relating to any Subordinated Indebtedness, the JCPenney
License Agreement, the Synthetic Lease Documentation, the Euro Notes
Documentation or any Indebtedness permitted pursuant to Section 6.01(i) or
(b) its certificate of incorporation, by-laws, operating, management or
partnership agreement or other organizational documents, in the case of each of
clause (a) and (b) to the extent any such amendment, modification or waiver
would be materially adverse to the Lenders (including, for the avoidance of
doubt, any amendment or modification providing for an earlier Trademark
Disposition Date than as set forth in the JCPenney License Agreement in effect
on November 2, 2009).
SECTION 6.13 [Reserved].
SECTION 6.14 Sale and Leaseback Transaction. No Loan Party will, nor will it
permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred, except for any
such sale of any fixed or capital assets by the Company or any Subsidiary that
is made for cash consideration in an amount not less than the fair value of such
fixed or capital asset and is either (a) consummated within 90 days after the
Company or such Subsidiary acquires or completes the construction of such fixed
or capital asset or (b) a sale and leaseback of (i) the Global Headquarters on
terms reasonably satisfactory to the Administrative Agent or (ii) the Ohio
Property; provided in the case of this clause (b)(ii), that in connection with
any such sale and leaseback, the Company and/or any of its Subsidiaries shall
have repaid the Synthetic Lease Obligations in an amount equal to or greater
than the lesser of (x) the outstanding Synthetic Lease Obligations and (y) the
Net Proceeds of such sale and leaseback, on or prior to the date that is one
Business Day following receipt thereof by the Company and/or any of its
Subsidiaries.
SECTION 6.15 Changes in Fiscal Periods. No Loan Party will, nor will it permit
any Subsidiary to, permit the fiscal year of such Loan Party to end on a day
other than (x) December 31, with respect to the European Loan Parties, or
(y) the Saturday closest to December 31, with respect to all other Loan Parties,
or change the Company’s method of determining fiscal quarters or fiscal months;
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(such consent not to be unreasonably withheld or delayed), change its fiscal
year end once during the term of this Agreement to the Saturday closest to the
end of any calendar month.
SECTION 6.16 Minimum Aggregate Availability. The Loan Parties will not permit
the Aggregate Availability at any time to be less than the greater of (i)
$45,000,000 and (ii) an amount equal to 11.25% of the Commitments then in
effect.
ARTICLE VII

Events of Default
If any of the following events (“Events of Default”) shall occur:
(a) a Borrower shall fail to pay any principal of any Loan owing by it or any
reimbursement obligation owing by it in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise;
(b) a Borrower shall fail to pay any interest on any Loan owing by it or any fee
or any other amount owing by it (other than an amount referred to in paragraph
(a) of this Article) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in or in connection with this Agreement or any Loan
Document or any amendment or modification thereof or waiver thereunder, or in
any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any respect when made or deemed made (or in any material respect if
such representation or warranty is not by its terms already qualified as to
materiality);
(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence), 5.08 or 5.19 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other Loan Document (other than
those which constitute a default under another Section of this Article), and
such failure shall continue unremedied (i) for a period of five days after the
earlier of any Loan Party’s knowledge of such breach or notice thereof from the
Administrative Agent (which notice will be given at the request of any Lender)
if such breach relates to terms or provisions of Section 5.01, 5.02(other than
Section 5.02(a)), 5.03 (other than with respect to a Loan Party’s existence)
through 5.07, 5.09, 5.10 or 5.12 of this Agreement, (ii) for a period of 5 days
after such breach if such breach relates to the provisions of Section 5.18,
(iii) for a period of 15 days after the earlier of any Loan Party’s knowledge of
such breach or notice thereof from the Administrative Agent (which notice will
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Lender) if such breach relates to terms or provisions of any other Section of
this Agreement or any other Loan Document or (iv) for a period beyond any period
of grace (if any) provided in such other Loan Document.
(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable subject to any
applicable grace periods;
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this paragraph (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(h) (i) an involuntary proceeding (including the filing of any notice of
intention in respect thereof) shall be commenced or an involuntary petition
shall be filed seeking (A) bankruptcy, liquidation, winding-up, dissolution,
reorganization, examination, suspension of general operations or other relief in
respect of a Loan Party or any Subsidiary of a Loan Party (other than any member
of the European Group) or its debts, or of a substantial part of its assets,
under any Insolvency Law now or hereafter in effect, (B) the composition,
rescheduling, reorganization, examination, arrangement or readjustment of, or
other relief from, or stay of proceedings to enforce, some or all of the debts
or obligations of any Loan Party or any Subsidiary of a Loan Party (other than a
member of the European Group), (C) the appointment of a receiver, interim
receiver, receiver and manager, liquidator, provisional liquidator,
administrator, examiner, trustee, custodian, sequestrator, conservator,
examiner, agent or similar official for any Loan Party or any Subsidiary of a
Loan Party (other than a member of the European Group) or for any substantial
part of its assets or (D) possession, foreclosure, seizure or retention, sale or
other disposition of, or other proceedings to enforce security over any
substantial part of the assets of any Loan Party or any Subsidiary of a Loan
Party (other than a member of the European Group) and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(ii) any corporate action, legal proceedings or other procedure or step is taken
in relation to:
(A) the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration, examination or reorganization (by way of voluntary
arrangement, scheme of arrangement or otherwise) of any member of the European
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(B) a composition, compromise, assignment or arrangement with any creditor of
any member of the European Group;
(C) the appointment of a liquidator, receiver, administrative receiver,
administrator, examiner, compulsory manager or other similar officer in respect
of any member of the European Group or any of its assets; or
(D) enforcement of any Lien over any assets of any member of the European Group,
or any analogous procedure or step is taken with respect to any member of the
European Group or its assets in any applicable jurisdiction;
(iii) any expropriation, attachment, sequestration, distress or execution or any
analogous process in any jurisdiction affects any asset or assets of a member of
the European Group having an aggregate value of $10,000,000 and is not
discharged within 30 days;
(i) (i) any Loan Party or any Material Subsidiary of a Loan Party (other than a
member of the European Group) shall (A) voluntarily commence any proceeding,
file any petition, pass any resolution or make any application seeking
liquidation, reorganization, administration or other relief under any Insolvency
Law now or hereafter in effect, (B) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in paragraph (h) of this Article, (C) apply for or consent to the appointment of
a receiver, interim receiver, receiver and manager, liquidator, assignee,
trustee, custodian, sequestrator, administrator, examiner, conservator or
similar official for such Loan Party or any such Material Subsidiary of a Loan
Party or for a substantial part of its assets, (D) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(E) make a general assignment for the benefit of creditors or (F) take any
action for the purpose of effecting any of the foregoing;
(ii) any member of the European Group is unable or admits inability to pay its
debts as they fall due or is deemed to or declared to be unable to pay its debts
under applicable law, suspends or threatens to suspend making payments on any of
its debts or, by reason of actual or anticipated financial difficulties,
commences negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness;
(iii) the value of the assets of any member of the European Group is less than
its liabilities (taking into account contingent and prospective liabilities but,
in the case of any Designated Loan Party, excluding intercompany obligations);
or
(iv) a moratorium is declared in respect of any indebtedness of any member of
the European Group (if a moratorium occurs, the ending of the moratorium will
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(j) any Loan Party or any Subsidiary of a Loan Party shall become unable, admit
in writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in
excess of $40,000,000 (to the extent not covered by insurance as to which the
relevant insurance company has acknowledged coverage) shall be rendered against
any Loan Party, any Subsidiary of any Loan Party or any combination thereof and
the same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of any Loan Party
or any Subsidiary of any Loan Party to enforce any such judgment or any Loan
Party or any Subsidiary of any Loan Party shall fail within 30 days to discharge
one or more non-monetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which
judgments or orders, in any such case, are not stayed on appeal by proper
proceedings diligently pursued;
(l) (i) an ERISA Event shall have occurred, (ii) a trustee shall be appointed by
a United States district court to administer any Plan, (iii) the PBGC shall
institute proceedings to terminate any Plan, (iv) any Loan Party or any of their
respective ERISA Affiliates shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred or will be assessed Withdrawal Liability
to such Multiemployer Plan and such entity does not have reasonable grounds for
contesting such Withdrawal Liability or is not contesting such Withdrawal
Liability in a timely and appropriate manner; or (v) any other event or
condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could, in the opinion of the Required
Lenders, reasonably be expected to result, individually or in the aggregate, in
a Material Adverse Effect;
(m) a Change in Control shall occur;
(n) the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty, or any Loan Guarantor shall fail to comply with any of the
terms or provisions of the Loan Guaranty to which it is a party, or any Loan
Guarantor shall deny that it has any further liability under the Loan Guaranty
to which it is a party, or shall give notice to such effect;
(o) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document; or
(p) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan

 

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Documents has ceased to be or otherwise is not valid, binding and enforceable in
accordance with its terms);
then, and in every such event (other than an event with respect to any Borrower
described in paragraph (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower Representative,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with respect to a Borrower described in
paragraph (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers. Upon the occurrence and the continuance of an Event of Default,
the Administrative Agent, the Canadian Administrative Agent, the European
Administrative Agent and each Collateral Agent may, and at the request of the
Required Lenders shall, exercise any rights and remedies provided to it under
the Loan Documents or at law or equity, including all remedies provided under
the UCC and the PPSA.
ARTICLE VIII

The Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent
and the Collateral Agents
(a) Each of the Lenders and the Issuing Banks hereby irrevocably appoints the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent and each Collateral Agent, each of them individually as its
agent and authorizes the Administrative Agent, the European Administrative
Agent, the Canadian Administrative Agent and each Collateral Agent to take such
actions on its behalf, including execution of the other Loan Documents, and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
(b) Any bank serving as the Administrative Agent, the European Administrative
Agent, the Canadian Administrative Agent or a Collateral Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, the
European Administrative Agent, the Canadian Administrative Agent or a Collateral
Agent, and such bank and its Affiliates may accept deposits from, lend money to,
invest in and generally engage in any kind of business with the Loan Parties or
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the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent or a Collateral Agent hereunder.
(c) Neither the Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent nor any Collateral Agent shall have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) neither the Administrative Agent,
the European Administrative Agent, the Canadian Administrative Agent nor any
Collateral Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) neither the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent nor any Collateral Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that such Agent
is required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth in the Loan Documents, neither the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent nor any Collateral Agent
shall have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Loan Party or any of its Subsidiaries
that is communicated to or obtained by the bank serving as the Administrative
Agent, the European Administrative Agent, the Canadian Administrative Agent or
any Collateral Agent or any of its Affiliates in any capacity. Neither the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent nor any Collateral Agent shall be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02) or in the absence of its
own gross negligence or willful misconduct. Neither the Administrative Agent,
the European Administrative Agent, the Canadian Administrative Agent nor any
Collateral Agent shall be deemed to have knowledge of any Default unless and
until written notice thereof is given to such Agent by the Borrower
Representative or a Lender, and neither the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent nor any Collateral Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the adequacy, accuracy or
completeness of any information (whether oral or written) set forth or in
connection with any Loan Document, (v) the legality, validity, enforceability,
effectiveness, adequacy or genuineness of any Loan Document or any other
agreement, instrument or document, (vi) the creation, perfection or priority of
Liens on the Collateral or the existence of the Collateral, or (vii) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent or any Collateral Agent.
(d) The Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent and each Collateral Agent shall each be entitled to rely
upon, and shall not incur any liability for relying upon, (i) any
representation, notice, request, certificate, consent, statement, instrument,
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by it to be genuine, correct and to have been authorized, signed or sent by the
proper Person, (ii) any statement made to it orally or by telephone and believed
by it to be made or authorized by the proper Person or (iii) any statement made
by a director, authorized signatory or employee of any Person regarding any
matters which may reasonably be assumed to be within his or her knowledge or
within his or her power to verify. The Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent and each Collateral
Agent may consult with legal counsel (who may be counsel for the Borrowers),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
(e) The Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent and each Collateral Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent, the European Administrative
Agent, the Canadian Administrative Agent or each Collateral Agent, as the case
may be. The Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent and each Collateral Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent and each Collateral Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent and each Collateral Agent, as the case may be.
(f) Subject to the appointment and acceptance of a successor Administrative
Agent, European Administrative Agent, the Canadian Administrative Agent or
Collateral Agent, as the case may be, as provided in this paragraph, the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent and each Collateral Agent, may resign at any time by
notifying the Lenders, the Issuing Banks and the Borrower Representative. Upon
any such resignation, the Required Lenders shall have the right, in consultation
with the Borrowers, to appoint a successor (which shall, (x) in the case of the
European Collateral Agent only, be an Affiliate of the Administrative Agent
acting through an office in the United Kingdom and (y) in the case of the
Canadian Administrative Agent only, be an Affiliate of the Administrative Agent
acting through a branch or an office in Canada). If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders and the Issuing Banks, appoint
its successor in such capacity, which shall be a commercial bank or an Affiliate
of any such commercial bank or a Lender (and (x) in the case of the European
Collateral Agent only, be an Affiliate of the Administrative Agent acting
through an office in the United Kingdom and (y) in the case of the Canadian
Collateral Agent only, be an Affiliate of the Administrative Agent acting
through an office in Canada). Upon the acceptance of its appointment as
Administrative Agent, European Administrative Agent, Canadian Administrative
Agent or a Collateral Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges,
obligations and duties of the retiring Administrative Agent, European
Administrative Agent, Canadian Administrative Agent or Collateral Agent, and the
retiring Administrative Agent, European Administrative

 

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Agent, Canadian Administrative Agent or Collateral Agent shall be discharged
from its duties and any further obligations hereunder. The retiring
Administrative Agent, European Administrative Agent, Canadian Administrative
Agent or Collateral Agent shall, at its own cost, make available to the
successor Administrative Agent, European Administrative Agent, Canadian
Administrative Agent or Collateral Agent any documents and records and provide
any assistance which the successor Administrative Agent, European Administrative
Agent, Canadian Administrative Agent or Collateral Agent may reasonably request
for the purposes of performing its functions as Administrative Agent, European
Administrative Agent, Canadian Administrative Agent or Collateral Agent under
the Loan Documents. The fees payable by the Borrowers to a successor
Administrative Agent, European Administrative Agent, Canadian Administrative
Agent or Collateral Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrowers and such successor. After the
Administrative Agent’s, European Administrative Agent’s, Canadian Administrative
Agent’s or Collateral Agent’s resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Administrative Agent, European Administrative Agent, Canadian Administrative
Agent or Collateral Agent.
(g) Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent any Collateral Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.
(h) Each Lender hereby agrees that (a) it has been provided access to each
Report prepared by or on behalf of the Administrative Agent; (b) neither the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent nor any Collateral Agent (i) makes any representation or
warranty, express or implied, as to the completeness or accuracy of any Report
or any of the information contained therein or any inaccuracy or omission
contained in or relating to a Report and (ii) shall be liable for any
information contained in any Report; (c) the Reports are not comprehensive
audits or examinations, and that any Person performing any field examination
will inspect only specific information regarding the Loan Parties and will rely
significantly upon the Loan Parties’ books and records, as well as on
representations of the Loan Parties’ personnel and that neither the
Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent nor any Collateral Agent undertakes any obligation to
update, correct or supplement the Reports; (d) it will keep all Reports
confidential and strictly for its internal use, and it will not share the Report
with any other Person except as otherwise permitted pursuant to Section 9.12 of
this Agreement; and (e) without limiting the generality of any other
indemnification provision contained in this Agreement, it will pay and protect,
and indemnify, defend, and hold the Administrative Agent, the European
Administrative Agent, the Canadian Administrative Agent, each Collateral Agent
and any such other Person preparing a Report harmless from and against,

 

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the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including reasonable attorney fees) incurred by as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender (except as permitted pursuant to Section 9.12 of this
Agreement).
(i) The US Collateral Agent shall act as the secured party, on behalf of the
Administrative Agent, the Lenders and the Issuing Banks, with respect to all
Collateral of each Loan Party that is organized in any jurisdiction, other than
any Participating Member State, the United Kingdom or Canada, the Canadian
Collateral Agent shall act as the secured party, on behalf of the Administrative
Agent, the Lenders and the Issuing Banks, with respect to all Collateral of each
Loan Party that is organized under the laws of Canada or any province or other
political subdivision thereof and the European Collateral Agent shall act as the
secured party, on behalf of the Administrative Agent, the Lenders and the
Issuing Banks, with respect to all Collateral of a Loan Party that is organized
in any Participating Member State or in the United Kingdom.
(j) Each Lender, each Issuing Bank, the US Collateral Agent, the Canadian
Collateral Agent, the European Administrative Agent, the Canadian Administrative
Agent and the Administrative Agent appoints the European Collateral Agent to act
as security trustee under and in connection with the Netherlands Security
Agreement and the UK Security Agreement on the terms and conditions set forth on
Schedule 8.
(k) The Syndication Agent and Documentation Agents shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such.
(l) For the purposes of holding any security granted by any Borrower or any
other Loan Party pursuant to the laws of the Province of Quebec to secure
payment of any bond issued by any Borrower or any Loan Party, each Agent, each
Lender and each Issuing Bank hereby irrevocably appoints and authorizes the
Canadian Collateral Agent and, to the extent necessary, ratifies the appointment
and authorization of the Canadian Collateral Agent, to act as the person holding
the power of attorney (i.e. “fondé de pouvoir”) (in such capacity, the
“Attorney”) of the Agents, the Lenders and the Issuing Banks as contemplated
under Article 2692 of the Civil Code of Québec, and to enter into, to take and
to hold on its behalf, and for its benefit, any hypothec, and to exercise such
powers and duties that are conferred upon the Attorney under any hypothec.
Moreover, without prejudice to such appointment and authorization to act as the
person holding the power of attorney as aforesaid, each Agent, each Lender and
each Issuing Bank hereby irrevocably appoints and authorizes the Canadian
Collateral Agent (in such capacity, the “Custodian”) to act as agent and
custodian for and on behalf of the Agents, the Lenders and the Issuing Banks to
hold and be the sole registered holder of any bond which may be issued under any
hypothec, the whole notwithstanding Section 32 of An Act respecting the special
powers of legal persons (Quebec) or any other applicable law, and to execute all
related documents. Each of the Attorney and the Custodian shall: (a) have the
sole and exclusive right and authority to exercise, except as may be otherwise
specifically restricted by the terms hereof, all rights and remedies given to
the Attorney and the Custodian (as applicable) pursuant to any hypothec, bond,
pledge, applicable laws or otherwise, (b) benefit from and be subject to all
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mutatis mutandis, including, without limitation, all such provisions with
respect to the liability or responsibility to and indemnification by the Agents,
the Lenders and the Issuing Banks, and (c) be entitled to delegate from time to
time any of its powers or duties under any hypothec, bond, or pledge on such
terms and conditions as it may determine from time to time. Any person who
becomes an Agent, a Lender or an Issuing Bank shall, by its execution of an
Assignment and Assumption, be deemed to have consented to and confirmed: (i) the
Attorney as the person holding the power of attorney as aforesaid and to have
ratified, as of the date it becomes an Agent, a Lender or an Issuing Bank, as
applicable all actions taken by the Attorney in such capacity, and (ii) the
Custodian as the agent and custodian as aforesaid and to have ratified, as of
the date it becomes an Agent, a Lender or an Issuing Bank, all actions taken by
the Custodian in such capacity. The substitution of the Canadian Collateral
Agent pursuant to the provisions of this Article VIII shall also constitute the
substitution of the Attorney and the Custodian.
(m) Each Lender and each Issuing Bank hereby irrevocably appoints the European
Collateral Agent to constitute, register, manage and enforce any security
interest created by any Collateral Document governed by French law on its behalf
in accordance with the provisions of article 2328-1 of the French Civil Code.
(n) In relation to any Austrian Collateral Document, each Lender, each Issuing
Bank, the European Borrower, Mexx Direct GmbH & Co. KG (a German limited
partnership (KG) having its registered office at Korschenbroich, Germany with
registered number HRA 6551(commercial register of the local court of Neuss)) and
each Loan Party organized under Austrian law hereby
(i) grants to the European Collateral Agent a power of attorney (Vollmacht):
(a) to execute for and on behalf of each of them any and all Austrian Collateral
Documents, any related notices and to do and perform all acts it deems necessary
or desirable to create valid rights (including rights in rem (dingliche Rechte))
under any Austrian Collateral Document; and
(b) to appoint for and on behalf of each of them, itself or any other Person as
its representative in relation to any Austrian Collateral Document, to exercise
for and on behalf of them all rights set forth in the Austrian Collateral
Documents (including, without limitation, the right to give notice, to make any
declaration in relation thereto, to enforce the security rights, to make all
calculations in relation thereto and to release the security as provided
therein).
(ii) agrees that the European Collateral Agent also acts for others and itself
in relation to the Austrian Collateral Documents, any related notice and any
measure or other act (including, without limitation, legal proceedings in
Austrian courts) it deems necessary at any time from time to time;

 

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(iii) authorizes the European Collateral Agent to authorize any other Person
with substitute powers to act for and on behalf of them; and
(iv) agrees to have executed for and on behalf of each of them any Austrian
Collateral Documents and any related notices, which relate to the Existing
Credit Agreement.
(o) All references to the Existing Credit Agreement in the Austrian Collateral
Documents shall be deemed to refer also to this Agreement. All rights and
security interest granted to, or created for the benefit of, the European
Collateral Agent or any Secured Party (as defined in the respective Austrian
Collateral Document) under the Austrian Collateral Documents shall not cease to
exist by reason of the entering into or execution of this Agreement. All rights
and security interest granted to, or created for the benefit of, the European
Collateral Agent or any Secured Party (as defined in the respective Austrian
Collateral Document) and all obligations of the European Borrower, Mexx Direct
GmbH & Co. KG and each Loan Party organized under Austrian law, shall continue
to be in full force and effect with respect to the Existing Credit Agreement and
this Agreement.
(p) The European Borrower, Mexx Direct GmbH & Co. KG and each Loan Party
organized under Austrian law hereby waive all their objections and defenses in
relation to the Existing Credit Agreement which any of them may have had or has
pursuant to Austrian law or otherwise against the European Collateral Agent, any
Lender, any Issuing Bank or any other Person to which any European Loan Party or
Canadian Loan Party owes any monies or incurs any obligations or other
liabilities under any Loan Documents as the same may be amended, restated or
otherwise modified from time to time.
(q) In relation to any Collateral Document governed by Italian law (each an
“Italian Collateral Document”), each Lender, each Issuing Bank and each Agent
hereby grants to the European Collateral Agent a power of attorney (i.e. mandato
con rappresentanza) in order to:
(a) execute in its name and on its behalf any and all Italian Collateral
Documents in the capacity of secured creditor (creditore garantito); and
(b) appoint in its name and on its behalf the European Collateral Agent as its
agent under such Italian Collateral Document, and therefore to exercise in its
name and on its behalf any and all rights set forth therein in favor of the
secured creditors (which shall include, without limitation, the right to send
any notice and make any declaration thereunder, the right to enforce the
security and to make any calculation in relation thereto and the right to
release the security in the circumstances set forth therein).
(r) Each Lender and each Issuing Bank hereby irrevocably appoints the European
Collateral Agent to constitute, register, manage and enforce any security
interest created by any Collateral Document governed by Spanish law on its
behalf and therefore to exercise in its name and on its behalf any and all
rights in favor of the Secured Parties (which

 

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shall include, without limitation, the right to send any notice and make any
declaration thereunder, the right to enforce the security and to make any
calculation in relation thereto and the right to release the security in the
circumstances set forth therein).
(s) In relation to any Collateral Document governed by the laws of Germany (for
the purposes of this Article VIII, each a “German Law Security Agreement”), each
Lender, each Agent, each Issuing Bank, each other Secured Party and each Foreign
Loan Party hereby:
(i) grants to the European Collateral Agent a power of attorney (Vollmacht):
(a) to execute for and on behalf of each of them any German Law Security
Agreement, any related notices and to do and perform all acts it deems necessary
or desirable to create valid rights (including rights in rem (dingliche Rechte))
under any German Law Security Document in their favor and to execute for and on
behalf of each of them any German Security Trust Agreement appointing the
European Collateral Agent as security trustee with respect to any security
interest created under the German Law Security Agreements; and
(b) to appoint for and on behalf of each of them, itself or any other Person as
its representative in relation to any German Law Security Agreement, to exercise
for and on behalf of them all rights set forth in any German Law Security
Agreement in their favor (including, without limitation, the right to give
notice, to make any declaration in relation thereto, to enforce the security
rights, to make all calculations in relation thereto and to release the security
as provided therein).
(ii) releases the European Collateral Agent from the restrictions of section 181
German Civil Code (BGB), in particular, but not limited to, with respect to the
exercise of the power of attorney (Vollmacht) granted pursuant to this
Article VIII and agrees that the European Collateral Agent also acts for others
and itself in relation to any German Law Security Agreement, any related notice
and any measure or other act (including, without limitation, legal proceedings
in Germany) it deems necessary at any time from time to time; and
(iii) authorizes the European Collateral Agent to authorize any other Person
with substitute powers to act for and on behalf of them.
Each German Loan Party represents to each of the Lenders that the release
granted pursuant to Section 11.07 is effective under the term of its
constitutional documents.
(t) In relation to each Collateral Document governed by Luxembourg Law, each
Lender and each Issuing Bank hereby irrevocably appoints the European Collateral
Agent to (i) without limitation, constitute, register, manage, enforce or
release, as the case may be, any security interest created thereby, as well as
take any action as may be necessary or useful in connection therewith and (ii)
more generally, exercise on behalf of each of them, any and all rights and
powers set forth therein.

 

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(u) Each of the Lenders hereby acknowledges that is has received and reviewed
the Intercreditor Agreement and agrees to be bound by the terms thereof. Each
Lender (and each Person that becomes a Lender hereunder pursuant to
Section 9.04) hereby (i) acknowledges that JPMorgan Chase Bank, N.A. is acting
under the Intercreditor Agreement in multiple capacities as the Collateral Agent
and the Credit Agreement Representative (as defined in the Intercreditor
Agreement) and (ii) waives any conflict of interest, now contemplated or arising
hereafter, in connection therewith and agrees not to assert against JPMorgan
Chase Bank, N.A. any claims, causes of action, damages or liabilities of
whatever kind or nature relating thereto. Each Lender (and each Person that
becomes a Lender hereunder pursuant to Section 9.04) hereby agrees that JPMorgan
Chase Bank, N.A., in its various capacities thereunder, may take such action on
its behalf as is contemplated by the terms of the Intercreditor Agreement. Each
Lender hereby agrees that, notwithstanding anything herein to the contrary, the
Lien and security interest granted to the US Collateral Agent on the US
Collateral pursuant to this Agreement or any other Loan Document and the
exercise of any right or remedy by the US Collateral Agent hereunder or under
any other Loan Document are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement, this Agreement and any other Loan Document, the terms of the
Intercreditor Agreement shall govern and control with respect to any right or
remedy.
(v) Each of the Lenders hereby acknowledges that (x) it has received and
reviewed the US Reaffirmation Agreement, (y) it consents to the terms thereof,
including any amendments to the US Security Agreement contained therein, and
agrees to be bound thereby and directs the Administrative Agent to execute the
US Reaffirmation Agreement.
(w) Each of the Lenders hereby acknowledges that (x) it has received and
reviewed the Canadian Reaffirmation Agreement, (y) it consents to the terms
thereof, including any amendments to the Canadian Security Agreement contained
therein, and agrees to be bound thereby and directs the Canadian Administrative
Agent to execute the Canadian Reaffirmation Agreement.
ARTICLE IX
Miscellaneous
SECTION 9.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph
(b) below), all notices and other communications provided for herein shall be in
writing and shall be delivered by facsimile, in the case of any notice to the
European Administrative Agent, or by hand or overnight courier service, mailed
by certified or registered mail or sent by facsimile or .pdf transmission, in
the case of any notice to any other Person, as follows:
(i) if to any Loan Party, to the Borrower Representative at:
Liz Claiborne, Inc.
5901 West Side Avenue (or One Claiborne Avenue)
North Bergen, New Jersey 07047

 

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Attention: Robert Vill
Telephone: 201-295-7515
Facsimile: 201-295-7825
with a copy to the General Counsel
Liz Claiborne, Inc.
5901 West Side Avenue (or One Claiborne Avenue)
North Bergen, New Jersey 07047
Attention: The General Counsel
Telephone: 212-626-3240
Facsimile: 212-626-5746
(ii) if to the Administrative Agent, the US Collateral Agent or the US Swingline
Lender, to:
JPMorgan Chase Bank, N.A.
270 Park Avenue, 44th Floor
New York, NY 10017
Attention: Scott Troy
Facsimile: 646-534-2274
(iii) if to the European Collateral Agent, to:
J.P. Morgan Europe Limited
10 Aldermanbury
London EC2V 7RF
United Kingdom
Attention: Tim Jacob
Facsimile: +44 20 7325 6813
(iv) if to the European Administrative Agent, the European Swingline Lender or
the UK Swingline Lender, to:
J.P. Morgan Europe Limited
Loans Agency 9th floor
125 London Wall
London EC2Y 5AJ
United Kingdom
Attention: Loans Agency
Facsimile: +44 20 7777 2360
(v) if to the Canadian Collateral Agent, to:
J.P. Morgan Chase Bank, N.A., Toronto Branch
200 Bay Street
Royal Bank Plaza, South Tower, Suite 1800
Toronto M5J 2J2 Canada

 

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Attention: Agostino Marchetti
Telecopy: (416) 981-2365
(vi) if to the Canadian Administrative Agent or the Canadian Swingline Lender,
to:
J.P. Morgan Chase Bank, N.A., Toronto Branch
200 Bay Street
Royal Bank Plaza, South Tower, Suite 1800
Toronto M5J 2J2 Canada
Attention: Agostino Marchetti
Telecopy: (416) 981-2365
(vii) if to any Issuing Bank, as notified to the Administrative Agent and the
Borrower Representative.
(viii) if to any other Lender, to it at its address or facsimile number set
forth in its Administrative Questionnaire.
All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile or .pdf transmission shall be
deemed to have been given when sent; provided that if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient.
(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications (including e-mail and internet or
intranet websites) pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II or
to Event of Default certificates delivered pursuant to Section 5.01(e) unless
otherwise agreed by the Administrative Agent, the Canadian Administrative Agent
and/or the European Administrative Agent, as the case may be, and the applicable
Lender; provided further that notices to the European Administrative Agent must
be delivered by facsimile. The Administrative Agent or the Borrower
Representative (on behalf of the Loan Parties) may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications. All such
notices and other communications (i) sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement); provided that if not given
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient, and (ii) posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (b)(i) of
notification that such notice or communication is available and identifying the
website address therefor.

 

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(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto.
(d) Any notice or document to be delivered to any Loan Party incorporated or
domiciled in Austria under or in connection with this Agreement or any other
Loan Document shall be sent to an address located outside of the territory of
the Republic of Austria (unless it is necessary and reasonably desirable for the
perfection of any Collateral Document or any security interest for such notice
or document to be sent to an address located within the territory of the
Republic of Austria).
(e) Mexx Austria GmbH hereby appoints and authorizes the European Borrower as
its representative for receipt of all communication, notices and documents,
including all Loan Documents, which are deemed to have been duly received by
Mexx Austria GmbH at the time when received by the European Borrower.
SECTION 9.02 Waivers; Amendments. (a) No failure or delay by any Agent, any
Issuing Bank or any Lender in exercising any right or power hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents, the Issuing Banks and the Lenders hereunder and
under any other Loan Document are cumulative and are not exclusive of any rights
or remedies that they would otherwise have. No waiver of any provision of any
Loan Document or consent to any departure by any Loan Party therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
any Agent, any Lender or any Issuing Bank may have had notice or knowledge of
such Default at the time.
(b) Neither this Agreement nor any other Loan Document (other than the
Intercreditor Agreement) nor any provision hereof or thereof may be waived,
amended or modified except (i) in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrowers (and, in the
case of any such waiver, amendment or modification that changes any provision of
the Loan Guaranty, the other Loan Parties) and the Required Lenders or (ii) in
the case of any other Loan Document (other than the Intercreditor Agreement),
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent, the applicable Collateral Agent (to the extent it is a
party to such Loan Document) and each Loan Party that is a party thereto, with
the consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce or forgive any
interest or fees payable hereunder, without the written consent of each Lender
directly affected thereby, (iii) postpone any scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any date for the payment of
any interest, fees or other Obligations payable hereunder, or reduce the amount
of, waive or excuse any such payment, postpone the scheduled

 

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date of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) increase the advance rates set forth in the definition of
US Borrowing Base, Canadian Borrowing Base, UK Borrowing Base or European
Borrowing Base without the written consent of each Lender, (v) change
Section 2.18(b) or (d) in a manner that would alter the manner in which payments
are shared or change any provision requiring ratable funding, without the
written consent of each Lender, (vi) modify eligibility criteria, as such
eligibility criteria are in effect on the Effective Date (including adding new
categories of eligible assets or eliminating any category of the reserves, or
increasing the sublimits set forth in any Borrowing Base, increasing the PP&E
Component or increasing the Eligible Trademark Amount), in any manner that has
the effect of increasing the amounts available to be borrowed hereunder without
the written consent of the Supermajority Lenders (it being understood, for the
avoidance of doubt, that any reduction in the Synthetic Lease Reserves pursuant
to the definition thereof as in effect on the date hereof shall be permitted),
(vii) reduce or eliminate reserves related to the Synthetic Lease Obligations
without the consent of each Lender (it being understood, for the avoidance of
doubt, that any reduction in the Synthetic Lease Reserves pursuant to the
definition thereof as in effect on the date hereof shall be permitted),
(viii) change any of the provisions of this Section or the definition of
“Required Lenders” or “Supermajority Lenders” or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender, (ix) release any Loan Guarantor that constitutes a Material
Subsidiary from its obligation under its Loan Guaranty or limit its liability
thereunder (except, in each case, as otherwise permitted herein or in the other
Loan Documents), without the written consent of each Lender, (x) except as
provided in paragraph (d) of this Section or in any Collateral Document, release
all or substantially all of the Collateral, without the written consent of each
Lender, (xi) add additional available currencies to any Facility without the
written consent of each Lender directly affected thereby, (xii) increase the
Canadian Sublimit, the European Sublimit or the UK Sublimit without the written
consent of the Supermajority Lenders, (xiii) change Section 2.11(c) without the
written consent of the Supermajority Lenders, (xiv) reduce the thresholds set
forth in, or waive compliance with, Section 6.16 without the consent of the
Supermajority Lenders, (xv) except as expressly permitted pursuant to
Section 6.02(p), subordinate the Liens in favor of the applicable Collateral
Agents on all or substantially all of the Collateral without the written consent
of the Supermajority Lenders, or (xvi) except as otherwise provided in
Section 2.09, increase the total Commitments without the written consent of the
Supermajority Lenders; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of any Agent, any Lender that is
an Issuing Bank or any Swingline Lender hereunder without the prior written
consent of such Agent, such Issuing Bank or such Swingline Lender, as the case
may be. The Administrative Agent may also amend the Commitment Schedule to
reflect assignments entered into pursuant to Section 9.04.
(c) Neither the Intercreditor Agreement nor any provision thereof may be waived,
amended or modified except with the consent of the Required Lenders (or any
greater number of Lenders that would have been required if such waiver,
amendment or modification had been subject to the provisions of clause
(b) above).
(d) The Lenders hereby irrevocably authorize each Collateral Agent, at its
option and in its sole discretion, to release any Liens granted to such
Collateral Agent by the

 

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Loan Parties on any Collateral (i) upon the termination of the all Commitments,
payment and satisfaction in full in cash of all Secured Obligations (other than
Unliquidated Obligations), and the cash collateralization of all Unliquidated
Obligations in a manner reasonably satisfactory to each affected Lender,
(ii) constituting property being sold or disposed of in compliance with the
terms of this Agreement, (iii) constituting property leased to a Loan Party
under a lease which has expired or been terminated in a transaction permitted
under this Agreement or (iv) as required to effect any sale or other disposition
of such Collateral in connection with any exercise of remedies by a Collateral
Agent or the Lenders pursuant to Article VII, or (v) if such Liens were granted
by any Loan Party with respect to which 100% of its Equity Interests have been
sold in a transaction permitted pursuant to Section 6.05. Except as provided in
the preceding sentence, no Collateral Agent will release any Liens on Collateral
without the prior written authorization of the Required Lenders. The Lenders
hereby irrevocably authorize the Administrative Agent, at its option and in its
sole discretion, to release any Loan Guarantor from its obligation under its
Loan Guaranty if 100% of the Equity Interests of such Loan Guarantor have been
sold in a transaction permitted pursuant to Section 6.05. Any such release shall
not in any manner discharge, affect, or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Loan
Parties in respect of) all interests retained by the Loan Parties, including the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral. Notwithstanding anything to the contrary set forth above, the
Lenders hereby irrevocably authorize the US Collateral Agent and/or the European
Collateral Agent, as applicable, to subordinate any Liens on the Trademarks of
the US Loan Parties and/or the Mexx Trademark, as applicable, in favor of such
Collateral Agent to the Liens on such trademarks granted to the holders of any
Indebtedness referred to in Section 6.02(p).
(e) If, in connection with any proposed amendment, waiver or consent requiring
the consent of “each Lender”, “each Lender affected thereby,” or “the
Supermajority Lenders” the consent of the Required Lenders is obtained, but the
consent of other necessary Lenders is not obtained (any such Lender whose
consent is necessary but not obtained being referred to herein as a
“Non-Consenting Lender”), then the Borrowers may elect to replace a
Non-Consenting Lender as a Lender party to this Agreement; provided that,
concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrowers and the Administrative Agent shall
agree, as of such date, to purchase for cash, at par, the Loans and other
Obligations due to the Non-Consenting Lender pursuant to an Assignment and
Assumption and to become a Lender for all purposes under this Agreement and to
assume all obligations of the Non-Consenting Lender to be terminated as of such
date and to comply with the requirements of paragraph (b) of Section 9.04, and
(ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on
the day of such replacement (1) all interest, fees and other amounts then
accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to
and including the date of termination, including without limitation payments due
to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount,
if any, equal to the payment which would have been due to such Lender on the day
of such replacement under Section 2.16 had the Loans of such Non-Consenting
Lender been prepaid on such date rather than sold to the replacement Lender.
SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a) Borrowers shall pay (i) all
reasonable and documented out-of-pocket expenses incurred by the Administrative
Agent, the European Administrative Agent, the Canadian Administrative Agent,
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each Lead Arranger, each Bookrunner and their respective Affiliates, including
the reasonable fees, charges and disbursements of counsel for the Administrative
Agent, the European Administrative Agent, the Canadian Administrative Agent, the
Lead Arrangers, each Collateral Agent and each Bookrunner (limited, in the
absence of an actual conflict of interest, to one counsel and one third party
appraiser and/or field examiner in each relevant jurisdiction), as the case may
be, in connection with the syndication and distribution (including, without
limitation, via the internet or through a service such as Intralinks) of the
credit facilities provided for herein, the preparation and administration of the
Loan Documents or any amendments, modifications or waivers of the provisions of
the Loan Documents (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by any Agent, any Bookrunner, any
Issuing Bank or any Lender, including the reasonable fees, charges and
disbursements of any counsel for any Agent, any Issuing Bank or any Lender, in
connection with the enforcement, collection or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
Expenses being reimbursed by the Borrowers under this Section include, without
limiting the generality of the foregoing, costs and expenses incurred in
connection with:
(i) appraisals, subject to the limitations set forth in Section 5.11;
(ii) insurance reviews;
(iii) field examinations and the preparation of Reports based on the fees
charged by a third party retained by the Administrative Agent or any Collateral
Agent or the internally allocated fees for each Person employed by the
Administrative Agent or any Collateral Agent with respect to each field
examination, together with the reasonable fees and expenses associated with
collateral monitoring services performed by the Specialized Due Diligence Group
of the Administrative Agent (and the Borrowers agree to modify or adjust the
computation of the Borrowing Base—which may include maintaining additional
Reserves, modifying the advance rates or modifying the eligibility criteria for
the components of the Borrowing Base—to the extent required by the
Administrative Agent as a result of any such evaluation, appraisal or
monitoring);
(iv) taxes, fees and other charges for (A) lien and title searches and title
insurance and (B) recording the Collateral Documents, filing financing
statements and continuations, and other actions to perfect, protect, and
continue the Liens of each Collateral Agent;
(v) sums paid or incurred to take any action required of any Loan Party under
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(vi) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.
All of the foregoing costs and expenses may be charged when due to the Borrowers
as Revolving Loans or to another deposit account, all as described in
Section 2.18(c).
(b) The Borrowers shall, jointly and severally, indemnify the Agents, the Lead
Arrangers, the Issuing Banks and each Lender, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all losses, claims, damages,
penalties, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by any Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Loan Party or any of
their Subsidiaries, or any Environmental Liability related in any way to any
Loan Party or any of their Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
penalties, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence, bad faith or willful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required to be paid
by it to any Agent, any Issuing Bank or any Swingline Lender under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to such Agent,
such Issuing Bank or such Swingline Lender, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
penalty, liability or related expense, as the case may be, was incurred by or
asserted against such Agent, such Issuing Bank or such Swingline Lender in its
capacity as such.
(d) To the extent permitted by applicable law, no Loan Party shall assert, and
each hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after written
demand therefor.

 

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SECTION 9.04 Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Bank that issues any Letter of Credit and, for the avoidance of
doubt, any successor by merger of any Lender), except that (i) the Loan Parties
may not assign or otherwise transfer any of their rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by any Loan Party without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Agents, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Subject to the conditions set forth in paragraph (c)(ii) below, any Lender
may assign to one or more assignees (other than the Company or any Affiliate
thereof) all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it) with the prior written consent (such consent not to be unreasonably
withheld) of:
(i) the Borrower Representative, provided that no consent of the Borrower
Representative shall be required for an assignment to a Lender, an Affiliate of
a Lender, an Approved Fund or, if a Default has occurred and is continuing, any
other assignee; and
(ii) the Administrative Agent and any Lender that is an Issuing Bank that has
Letters of Credit outstanding in an aggregate amount in excess of $5,000,000 at
such time.
(c) Assignments shall be subject to the following additional conditions:
(i) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000, unless each of the Borrower Representative and the Administrative
Agent otherwise consent; provided that (1) no such consent of the Borrower
Representative shall be required if an Event of Default has occurred and is
continuing and (2) such amounts shall be aggregated in respect of each Lender
and its Affiliates or Approved Funds, if any;
(ii) in order to comply with the Dutch Act on the Financial Supervision (Wet op
het financieel toezicht), the amount transferred by any Lender under this
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of at least €50,000 (or its equivalent in other currencies) or such other amount
as may be required from time to time by the Dutch Act on the Financial
Supervision (or implementing legislation) or if less, the new Lender shall
confirm in writing to the Borrowers that it is a professional market party
within the meaning of the Dutch Act on the Financial Supervision;
(iii) each partial assignment shall be made as an assignment of a proportionate
part of all of the assigning Lender’s rights and obligations under this
Agreement;
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 to be paid by the assignee or the assignor; and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Company, the Loan
Parties and their Related Parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including federal, provincial,
territorial and state securities laws.
For the purposes of this Section 9.04, the term “Approved Fund” has the
following meaning:
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
(d) Subject to acceptance and recording thereof pursuant to paragraph (e) of
this Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (g) of
this Section.
(e) The Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Assumption

 

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delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). The entries in the Register shall be conclusive, and the
Borrowers, the Administrative Agent, each Collateral Agent, the Issuing Banks
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Banks and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (c)(iv) of this Section
and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e),
2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(g) (i) Any Lender may, without the consent of the Borrowers, any Agent, any
Issuing Bank or any Swingline Lender, sell participations to one or more banks
or other entities (a “Participant”) in all or a portion of such Lender’s rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Agents, the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (g)(ii) of
this Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender (without duplication of any benefits of the Lender under such Sections)
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.08 as though it were a Lender; provided such
Participant agrees to be subject to Section 2.18(d) as though it were a Lender.
Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the Borrowers, maintain a register on which it enters the name and
address of each Participant and the principal amounts (and stated interest) of
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obligations under this Agreement (the “Participant Register”). The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.
(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 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
Representative’s prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower Representative and the Administrative Agent, the European
Administrative Agent or the Canadian Administrative Agent, as applicable, is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrowers and any Withholding Agent, to comply
with Section 2.17(g) as though it were a Lender.
(h) Any Lender may 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 without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; 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 9.05 Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Agent, any Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding (unless the same has been cash
collateralized in accordance with Section 2.06(j) hereof) and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.15,
2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
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respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or .pdf
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 9.07 Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrowers or any
Loan Guarantor against any and all of the Secured Obligations held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under the Loan Documents and although such obligations may be unmatured. The
applicable Lender shall promptly notify the Borrower Representative and the
Administrative Agent of such set-off or application, provided that any failure
to give or any delay in giving such notice shall not affect the validity of any
such set-off or application under this Section. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process. (a) The
Loan Documents (other than Section 9.21 of this Agreement (which shall be
governed by the laws of Germany or the State of New York, as applicable),
Section 9.30 (which shall be governed by the laws of the Netherlands or the
State of New York, as applicable) and Section 10.10 of this Agreement (which
shall be governed by the laws of Germany) and other than those containing a
contrary express choice of law provision) shall be governed by and construed in
accordance with the laws of the State of New York, but giving effect to federal
laws applicable to national banks.
(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any US Federal or New York
State court sitting in the Borough of Manhattan, New York in any action or
proceeding arising out of or relating to any Loan Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
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in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement or any other Loan Document shall affect any right
that the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent, any Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Loan Party or its properties in the courts
of any jurisdiction.
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each of the Agents, the Issuing Banks and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (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, (c) to the extent required by Requirement of Laws
or by any subpoena or similar legal process, (d) to any other party to this
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exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) subject to an 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 Loan Parties and
their obligations, (g) with the consent of the Borrower Representative or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, any Issuing Bank or any Lender on a non-confidential basis
from a source other than the Borrowers. For the purposes of this Section,
“Information” means all information received from the Borrowers and the other
Loan Parties relating to the Borrowers and the other Loan Parties or their
business, other than any such information that is available to the
Administrative Agent, any Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Borrowers or any other Loan Party; provided that, in
the case of information received from the Borrowers or any Loan Party after the
date hereof, such information is clearly identified at the time of delivery as
confidential. 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.
EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE COMPANY AND ITS AFFILIATES AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL, PROVINCIAL, TERRITORIAL AND STATE SECURITIES
LAWS.
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED
IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION
THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS
COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL, PROVINCIAL,
TERRITORIAL AND STATE SECURITIES LAWS.
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
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from any of its obligations hereunder. Each Lender hereby represents that it is
not relying on or looking to any Margin Stock for the repayment of the
Borrowings provided for herein. Anything contained in this Agreement to the
contrary notwithstanding, neither any Issuing Bank nor any Lender shall be
obligated to extend credit to the Borrowers in violation of any Requirement of
Law.
SECTION 9.14 USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”) hereby notifies the Borrowers that pursuant to the
requirements of such Act, it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the names
and addresses of the Borrowers and other information that will allow such Lender
to identify the Borrowers in accordance with such Act. The Borrowers agree to
provide such information to each Lender on request.
SECTION 9.15 Disclosure. Each Loan Party and each Lender hereby acknowledges and
agrees that the Administrative Agent and/or its Affiliates from time to time may
hold investments in, make other loans to or have other relationships with any of
the Loan Parties and their respective Affiliates.
SECTION 9.16 Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens (in each case for the
benefit of the Agents, the Lenders and the Issuing Banks) in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession. Should any Lender (other than any Collateral
Agent) obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent and, promptly upon the request of the Administrative Agent,
shall deliver such Collateral to the applicable Collateral Agent or otherwise
deal with such Collateral in accordance with the instructions of the applicable
Collateral Agent.
SECTION 9.17 Interest Rate Limitation. (a) Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
(b) If any provision of this Agreement or of any of the other Loan Documents
would obligate any Loan Party to make any payment of interest or other amount
payable to the Lenders in an amount or calculated at a rate which would be
prohibited by the laws of Canada or of any political subdivision thereof or
would result in a receipt by the Lenders of interest at a criminal rate (as such
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notwithstanding such provisions, such amount or rate shall be deemed to have
been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by law or so result in a
receipt by the Lenders of interest at a criminal rate, such adjustment to be
effected, to the extent necessary, as follows: (1) firstly, by reducing the
amount or rate of interest required to be paid to the Lenders under this
Agreement, and (2) thereafter, by reducing any fees, commissions, premiums and
other amounts required to be paid to the Lenders which would constitute
“interest” for purposes of Section 347 of the Criminal Code (Canada).
Notwithstanding the foregoing, and after giving effect to all adjustments
contemplated thereby, if the Lenders shall have received an amount in excess of
the maximum permitted by that section of the Criminal Code (Canada), the Loan
Parties shall be entitled, by notice in writing to the Canadian Administrative
Agent, to obtain reimbursement from the Lenders in an amount equal to such
excess and, pending such reimbursement, such amount shall be deemed to be an
amount payable by the Lenders to the Borrower Representative. Any amount or rate
of interest referred to in this Section 9.17(b) shall be determined in
accordance with generally accepted actuarial practices and principles as an
effective annual rate of interest over the term that the applicable Loan remains
outstanding on the assumption that any charges, fees or expenses that fall
within the meaning of “interest” (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be pro-rated over that
period of time and otherwise be pro-rated over the period from the Effective
Date to the Maturity Date and, in the event of a dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by the Canadian
Administrative Agent shall be conclusive for the purposes of such determination.
SECTION 9.18 Waiver of Immunity. To the extent that any Loan Party has, or
hereafter may be entitled to claim or may acquire, for itself, any Collateral or
other assets of the Loan Parties, any immunity (whether sovereign or otherwise)
from suit, jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution
or otherwise) with respect to itself, any Collateral or any other assets of the
Loan Parties, such Loan Party hereby waives such immunity in respect of its
obligations hereunder and under any promissory notes evidencing the Loans
hereunder and any other Loan Document to the fullest extent permitted by
applicable law and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this Section 9.18 shall be effective to the
fullest extent now or hereafter permitted under the Foreign Sovereign Immunities
Act of 1976 (as amended, and together with any successor legislation) and are,
and are intended to be, irrevocable for purposes thereof.
SECTION 9.19 Currency of Payment. Each payment owing by any Borrower hereunder
shall be made in the relevant currency specified herein or, if not specified
herein, specified in any other Loan Document executed by the Administrative
Agent, the US Collateral Agent, the Canadian Collateral Agent or the European
Collateral Agent (the “Currency of Payment”) at the place specified herein (such
requirements are of the essence of this Agreement). If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
in a Currency of Payment into another currency, the parties hereto agree that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase such Currency of
Payment with such other currency at the Spot Selling Rate on the Business Day
preceding that on which final judgment is given. The obligations in respect of
any sum due hereunder to any Lender or any Issuing Bank shall, notwithstanding
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discharged only to the extent that, on the Business Day following receipt by
such Lender or Issuing Bank of any sum adjudged to be so due in such other
currency, such Lender or Issuing Bank may, in accordance with normal banking
procedures, purchase the Currency of Payment with such other currency. Each
Borrower agrees that (a) if the amount of the Currency of Payment so purchased
is less than the sum originally due to such Lender or Issuing Bank in the
Currency of Payment, as a separate obligation and notwithstanding the result of
any such adjudication, such Borrower shall immediately pay the shortfall (in the
Currency of Payment) to such Lender or Issuing Bank and (b) if the amount of the
Currency of Payment so purchased exceeds the sum originally due to such Lender
or Issuing Bank, such Lender or Issuing Bank shall promptly pay the excess over
to such Borrower in the currency and to the extent actually received.
SECTION 9.20 Conflicts. In the event of any conflict between the terms of this
Agreement and the terms of any other Loan Document (other than the Intercreditor
Agreement), the terms of this Agreement shall, to the extent of such conflict,
prevail.
SECTION 9.21 Parallel Debt. (a) To grant the security and to ensure the
continuing validity of security granted pursuant to any Netherlands Security
Agreement, any German Security Agreement and any Greek Account Pledge Agreement,
as applicable, to the European Collateral Agent, each Netherlands Loan Party,
each German Loan Party and each Greek Loan Party, as applicable (each a
“Relevant Loan Party”), irrevocably and unconditionally undertakes in advance to
pay to the European Collateral Agent amounts equal to any amounts owing from
time to time by a Foreign Loan Party to any Guaranteed Party under (a) any Loan
Document, (b) any Secured Swap Obligations, (c) any Acceptance Obligations
and/or (d) any Banking Services Obligations, in each case as and when those
amounts are due (collectively, in respect of a Relevant Loan Party, its
“Parallel Debt”).
(b) Each Relevant Loan Party, the Administrative Agent, the European Collateral
Agent and the other Guaranteed Parties acknowledge that each Parallel Debt is a
several and a separate and independent obligation from, and shall not in any way
limit or affect, the corresponding obligations of a Foreign Loan Party to any
Guaranteed Party under (a) any Loan Document, (b) any Secured Swap Obligations,
(c) any Banking Services Obligations and/or (d) any Acceptance Obligations
(collectively, the “Corresponding Debt”) nor shall the amounts for which a
Relevant Loan Party is liable under its Parallel Debt be limited or affected in
any way by the Corresponding Debt provided that:
(i) the Parallel Debt of each Relevant Loan Party shall be decreased to the
extent that the Corresponding Debt has been irrevocably paid or (in the case of
guarantee obligations) discharged;
(ii) the Corresponding Debt shall be decreased to the extent that the Parallel
Debt of a Relevant Loan Party has been irrevocably paid or (in the case of
guarantee obligations) discharged; and
(iii) the amount of the Parallel Debt of each Relevant Loan Party shall at all
times be equal to the amount of the Corresponding Debt.

 

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(c) For the purpose of this Section 9.21, the European Collateral Agent acts in
its own name and on behalf of itself and not as agent, representative or trustee
of any Guaranteed Party, and its claims in respect of each Parallel Debt shall
not be held on trust.
(d) The Liens granted under the Netherlands Security Agreements, the German
Security Agreements and any Greek Account Pledge Agreement, to the European
Collateral Agent to secure each Parallel Debt is granted to the European
Collateral Agent in its capacity as sole creditor of each Parallel Debt.
(e) All monies received or recovered by the European Collateral Agent pursuant
to this Section 9.21, and all amounts received or recovered by the European
Collateral Agent from or by the enforcement of any Lien granted to secure a
Parallel Debt, shall be applied in accordance with Section 2.18(b).
(f) The European Administrative Agent shall have its own independent right to
demand and receive payment of each Parallel Debt.
(g) Without limiting or affecting the European Collateral Agent’s rights against
the Loan Parties (whether under this Section 9.21 or under any other provision
of the Loan Documents), each Loan Party acknowledges that:
(i) nothing in this Section 9.21 shall impose any obligation on the European
Collateral Agent to advance any sum to any Loan Party or otherwise under any
Loan Document, except in its capacity as a Lender; and
(ii) for the purpose of any vote taken under any Loan Document, the European
Collateral Agent shall not be regarded as having any participation or commitment
other than those which it has in its capacity as a Lender.
(h) For the avoidance of doubt, (i) the Parallel Debt of each Relevant Loan
Party will become due and payable at the same time the Corresponding Debt (or a
part thereof) becomes due and payable and (ii) a Relevant Loan Party may not
repay or prepay its Parallel Debt unless directed to do so by the European
Collateral Agent or the Lien pursuant to a Netherlands Security Agreement, a
German Security Agreement or a Greek Account Pledge Agreement, as applicable, is
enforced by the European Collateral Agent.
SECTION 9.22 Canadian Anti-Money Laundering Legislation. (a) Each Borrower
acknowledges that, pursuant to the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada) and other applicable anti-money laundering,
anti-terrorist financing, government sanction and “know your client” laws
(collectively, including any guidelines or orders thereunder, “AML
Legislation”), the Lenders, the Issuing Banks and the Agents may be required to
obtain, verify and record information regarding the Borrowers and their
respective directors, authorized signing officers, direct or indirect
shareholders or other Persons in control of the Borrowers, and the transactions
contemplated hereby. Each Borrower shall promptly provide all such information,
including supporting documentation and other evidence, as may be reasonably
requested by any Lender, any Issuing Bank or any Agent, or any prospective
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or participant of a Lender, any Issuing Bank or any Agent, in order to comply
with any applicable AML Legislation, whether now or hereafter in existence.
(b) If the Canadian Administrative Agent has ascertained the identity of any
Borrower or any authorized signatories of the Borrower for the purposes of
applicable AML Legislation, then the Canadian Administrative Agent:
(i) Shall be deemed to have done so as an agent for each Lender and each Issuing
Bank, and this Agreement shall constitute a “written agreement” in such regard
between each Lender, each Issuing Bank and the Canadian Administrative Agent
within the meaning of the applicable AML Legislation; and
(ii) Shall provide to each Lender and each Issuing Bank copies of all
information obtained in such regard without any representation or warranty as to
its accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each of the Lenders and each of the Issuing Banks agrees that neither
the Canadian Administrative Agent nor any other Agent has any obligation to
ascertain the identity of the Borrowers or any authorized signatories of the
Borrowers on behalf of any Lender or any Issuing Bank, or to confirm the
completeness or accuracy of any information it obtains from any Borrower or any
such authorized signatory in doing so.
SECTION 9.23 Subordination. To the fullest extent permitted by applicable law,
each Loan Party party hereto hereby agrees that, upon the occurrence and during
the continuance of an Event of Default, unless otherwise agreed by the
applicable Collateral Agent, all Indebtedness owing to it by the Company or any
of its Subsidiaries shall be fully subordinated to the indefeasible payment in
full in cash of such Loan Party’s Secured Obligations or Guaranteed Obligations,
as the case may be.
SECTION 9.24 Process Agent. Each Foreign Loan Party hereby irrevocably
designates, appoints and the Company, in the case of any suit, action or
proceeding brought in the United States as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
that may be served in any action or proceeding arising out of or in connection
with this Agreement or any other Loan Document. Such service may be made by
mailing (by registered or certified mail, postage prepaid) or delivering a copy
of such process to such Foreign Loan Party in care of the Company at the
Company’s address set forth in Section 9.01, and such Foreign Loan Party hereby
irrevocably authorizes and directs the Company to accept such service on its
behalf. As an alternative method of service, each Foreign Loan Party irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing (by registered or certified mail, postage prepaid) of copies of
such process to the Company or such Foreign Loan Party at its address specified
in Section 9.01. Each Loan Party agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

 

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SECTION 9.25 No Novation. The parties hereto agree that the Lenders shall
continue to benefit from any security, guarantee, mortgage, lien or other
encumbrance governed by French law relating to the Existing Credit Agreement in
accordance with article 1278 of the French Civil Code (Code civil).
SECTION 9.26 UK Loan Parties. Each UK Loan Party hereby confirms and agrees that
it is joining the Existing Credit Agreement, as amended and restated hereby, as
a UK Loan Party and a European Loan Party for purposes of this Agreement and the
other Loan Documents.
SECTION 9.27 French Loan Guarantor. The parties to this Agreement agree that
(a) if a Loan Party fails to pay any amount due and payable hereunder (the
“Defaulting Loan Party”) and as a result a French Loan Guarantor makes any
payment to the Lenders, the Administrative Agent, any Issuing Bank or any
indemnified party arising under the Loan Documents (whether from the proceeds of
the enforcement of any European Security Agreement or under Article X hereof),
such French Loan Guarantor shall be subrogated to any rights the Lenders, the
Administrative Agent, any Issuing Bank or any indemnified party arising under
the Loan Documents may have against the Defaulting Loan Party to the extent of
such payment and the Defaulting Loan Party shall indemnify the French Loan
Guarantor fully therefor (such indemnification being referred to as the
“Indemnification Claim”);
(b) in the circumstances referred to in paragraph (a) above, the relevant French
Loan Guarantor shall assign the Indemnification Claim to the European Borrower
and such assignment shall thus pro tanto discharge the obligations of such
French Loan Guarantor to the European Borrower under the relevant French
Intercompany Loan;
(c) as a result of the assignment referred to in paragraph (b) above, the
European Borrower may request payment of the Indemnification Claim from the
Defaulting Loan Party;
(d) if the Defaulting Loan Party is the European Borrower, the provisions of
paragraph (a) above shall apply and the Indemnification Claim shall be set off
pro tanto against the relevant French Intercompany Loan; and
(e) the European Borrower undertakes not to declare any French Intercompany Loan
due and payable and the French Loan Guarantors undertake not to repay the French
Intercompany Loans until all Facility B Obligations owing by the European Loan
Parties and the Canadian Loan Parties have been paid in full.
SECTION 9.28 Greek Loan Party (a). Mexx Europe International B.V. as the sole
shareholder of Mexx Hellas EPE approves the execution of this Agreement and the
Greek Account Pledge Agreement by Mexx Hellas EPE and recognizes such agreements
as fully valid and binding for Mexx Hellas EPE.
SECTION 9.29 Netherlands Security Agreements. Each Loan Party party to any
Netherlands Security Agreement confirms that such Netherlands Security Agreement
shall remain in full force and effect and it is expressly agreed by the parties
to the Netherlands Security Agreements that the Netherlands Security Agreements
shall continue to secure all the liabilities and obligations that such
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(including but not limited to the payment obligations of each relevant Loan
Party under this Agreement).
SECTION 9.30 Reaffirmation and Accession by the Loan Parties. (a) By executing
and delivering this Agreement, each Loan Party hereby reaffirms each of its
obligations, acknowledgments, consents and liabilities pursuant to each of the
Hong Kong Subordination Agreement and the Intercompany Note, or to the extent
that a Loan Party was not previously a party to the Hong Kong Subordination
Agreement and the Intercompany Note, hereby becomes a party to and accedes to
each of the Hong Kong Subordination Agreement and the Intercompany Note (x) as
“Payor” with respect to the Subordination Agreement and (y) as “Payee” and, to
the extent such Loan Party is a borrower from time to time from any other Loan
Party, as “Payor” with respect to the Intercompany Note, in each case with
respect to clauses (x) and (y) above, with the same force and effect as if
originally named as a party therein and, without limiting the generality of the
foregoing, hereby expressly assumes all obligations and liabilities assumed by
the other Loan Parties as “Payee” and/or “Payor”, as applicable, thereunder and
each of the Loan Parties hereby expressly agrees to and accepts such
reaffirmation and/or accession (as applicable).
(b) Each of the US Loan Parties hereby acknowledges and reaffirms that it has
granted a Lien to the US Collateral Agent on the US Collateral and that, upon
the occurrence and during the continuance of an Event of Default, the US
Collateral Agent shall have the rights and remedies set forth in Article V of
the US Security Agreement.
ARTICLE X
Loan Guaranty
SECTION 10.01 Guaranty. (a) Each Loan Guarantor and any of its successors or
assigns (other than those that have delivered a separate Loan Guaranty) hereby
agrees that it is jointly and severally liable for, and, as primary obligor and
not merely as surety, absolutely and unconditionally guarantees, to the extent
permissible under the laws of the country in which such Loan Guarantor is
located or organized, to the Lenders, the Agents and the Issuing Banks
(collectively, the “Guaranteed Parties”) the prompt payment when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter, of
the Secured Obligations and all costs and expenses including, without
limitation, all court costs and attorneys’ and paralegals’ fees (including
allocated costs of in-house counsel and paralegals) and expenses paid or
incurred by the Agents, the Issuing Banks and the Lenders in endeavoring to
collect all or any part of the Secured Obligations from, or in prosecuting any
action against, any Borrower, any other Loan Guarantor or any other guarantor of
all or any part of the Secured Obligations (such costs and expenses, together
with the Secured Obligations, collectively the “Guaranteed Obligations”). Each
Loan Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Loan Guaranty apply to and may be enforced by or on
behalf of any domestic or foreign branch or Affiliate of any Lender that
extended any portion of the Guaranteed Obligations. Notwithstanding anything in
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Obligations guaranteed hereunder by any European Loan Party or Canadian Loan
Party include the Secured Obligations of any US Loan Party.
(b) If any payment by a Loan Guarantor or any discharge given by a Guaranteed
Party (whether in respect of the obligations of any Loan Guarantor or any
security for those obligations or otherwise) is avoided or reduced as a result
of insolvency or any similar event: (a) the liability of each Loan Guarantor
shall continue as if the payment, discharge, avoidance or reduction had not
occurred; and (b) each Guaranteed Party shall be entitled to recover the value
or amount of that security or payment from each Loan Guarantor, as if the
payment, discharge, avoidance or reduction had not occurred.
(c) To the fullest extent permitted by applicable law, the obligations of each
Loan Guarantor under this Article X will not be affected by an act, omission,
matter or thing which, but for this Article X, would reduce, release or
prejudice any of its obligations under this Article X (without limitation and
whether or not known to it or any Guaranteed Party) including: (a) any time,
waiver or consent granted to, or composition with, any Loan Guarantor or other
person; (b) the release of any other Loan Guarantor or any other person under
the terms of any composition or arrangement with any creditor of any member of
the European Group; (c) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or enforce, any rights
against, or security over assets of, any Loan Guarantor or other person or any
non-presentation or non-observance of any formality or other requirement in
respect of any instrument or any failure to realize the full value of any
security; (d) any incapacity or lack of power, authority or legal personality of
or dissolution or change in the members or status of an Loan Guarantor or any
other person; (e) any amendment, novation, supplement, extension (whether of
maturity or otherwise) or restatement (in each case, however fundamental and of
whatsoever nature) or replacement of a Loan Document or any other document or
security; (f) any unenforceability, illegality or invalidity of any obligation
of any person under any Loan Document or any other document or security; or
(g) any insolvency or similar proceedings.
(d) Without prejudice to the generality of the above, each Loan Guarantor
expressly confirms, as permissible under applicable law, that it intends that
this guarantee shall extend from time to time to any (however fundamental)
variation, increase, extension or addition of or to any of the Loan Documents
and/or any amount made available under any of the Loan Documents for the
purposes of or in connection with any of the following: acquisitions of any
nature; increasing working capital; enabling investor distributions to be made;
carrying out restructurings; refinancing or replacing existing facilities;
refinancing any other indebtedness; making facilities available to new
borrowers; any other variation or extension of the purposes for which any such
facility or amount might be made available from time to time; and any fees,
costs and/or expenses associated with any of the foregoing.
(e) Each Loan Guarantor waives any right it may have of first requiring any
Guaranteed Party (or any trustee or agent on its behalf) to proceed against or
enforce any other rights or security or claim payment from any person before
claiming from that Loan Guarantor under this Article X. This waiver applies
irrespective of any law or any provision of a Loan Document to the contrary.

 

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(f) This Loan Guaranty is in addition to and is not in any way prejudiced by any
other guarantee or security now or subsequently held by any Guaranteed Party.
(g) This Loan Guaranty does not apply to any liability to the extent that it
would result in this Loan Guaranty constituting unlawful financial assistance
within the meaning of Section 2:98(c) and/or Section 2:207(c) of the Dutch Civil
Code and within the meaning of Section 30 of the German Limited Liability
Company Act (GmbHG) or Section 57 of the German Stock Corporation Act
(Aktiengesetz), or any equivalent and applicable provisions under the laws of
the jurisdiction of incorporation of the relevant Loan Guarantor.
(h) The parties hereto hereby agree that the Guaranteed Obligations of each Loan
Guarantor incorporated under the laws of France shall be limited to the
satisfaction of the French Guaranteed Obligations.
(i) The guaranty granted by any Loan Guarantor organized under the laws of
Luxembourg (each a “Luxembourg Loan Guarantor”) under this Article X shall be
limited to an aggregate amount not exceeding the higher of (x) 90% of such
Luxembourg Loan Guarantor’s capitaux propres (as referred to in article 34 of
the Luxembourg Law of 19 December 2002 on the commercial register and annual
accounts, as amended (the “Law of 2002”) as at the date on which a demand is
made and (y) 90% of such Luxembourg Loan Guarantor’s capitaux propres (as
referred to in article 34 of the Law of 2002) as at the date of this Agreement
(it being understood that the limitations set forth above shall not apply to the
obligations and liabilities of any such Luxembourg Loan Guarantor to the extent
they relate to the obligations and liabilities under any Loan Document of any
subsidiary of the Luxembourg Loan Guarantor which may become a Borrower).
(j) This Loan Guaranty does not apply to any liability of a Loan Party
incorporated in Finland (a “Finnish Loan Party”) to the extent that it would
(i) constitute unlawful financial assistance within the meaning of chapter 13
section 10 of the Finnish Companies Act (2006/624, as amended); or constitute
unlawful distribution of assets within the meaning of chapter 13 sections 1 and
2 of the Finnish Companies Act (2006/624, as amended).
(k) The guarantee obligations to be assumed by any Italian Loan Party shall be
limited to the extent required to enable the Company to comply with applicable
provision on financial assistance, including, without limitation, article 2358
of the Italian Civil Code, and accordingly they would not include any guarantee
or security in respect of any indebtedness incurred in relation to the financing
and/or the refinancing of an acquisition or subscription of shares issued or to
be issued by the Italian Loan Party or by any direct or indirect controlling
entity of the Italian Loan Party.
(l) The maximum amount that any Italian Loan Party might be required to pay in
respect of its guarantee obligations under this Agreement shall not exceed the
greater of (i) an amount equal to 80% multiplied by the sum of (A) the total
value of the “patrimonio netto” (as such term is defined in Article 2424 of the
Italian Civil Code) of the Italian Loan Party, as stated from time to time in
its latest financial statements duly approved by a shareholders’ resolution plus
(B) the global amount of intercompany financing made available to the Italian
Loan Party and outstanding other than the intercompany financing contemplated in
item (ii)

 

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below and (ii) an amount equal to 1.50 multiplied by the aggregate amount
on-lent or made available, directly or indirectly, by the Borrowers to the
Italian Loan Party from amounts borrowed from the Borrowers under this
Agreement; provided, however, that for the purposes of article 1938 of the
Italian Civil Code (if applicable) the maximum amount that the Italian Loan
Party might be required to pay in respect of its guarantee obligations pursuant
to this Agreement shall not exceed $300,000,000.
(m) Notwithstanding anything to the contrary herein, the obligations and
liabilities of a Loan Party incorporated in Sweden (a “Swedish Loan Party”)
under this Agreement and the scope of the Agreement (including for the avoidance
of doubt the Intercompany Note and the Hong Kong Subordination Agreement) shall
be limited if (and only if) required by an application of the provisions of the
Swedish Companies Act (Sw. aktiebolagslagen (2005:551)) regulating
(i) prohibited loans, guarantees and other security and (ii) distribution of
assets (including profits and dividends and any other form of transfer of value
(Sw. värdeöverföring) within the meaning of the Swedish Companies Act) taking
into account also any other security granted and/or guarantee given by a Swedish
Loan Party subject to the corresponding limitation, and it is understood that
the obligations of a Swedish Loan Party for such obligations and liabilities
under this Agreement shall apply only to the extent permitted by the
above-mentioned provisions as applied together with other applicable provisions
of the Swedish Companies Act, and the obligations of the Swedish Loan Party
hereunder shall be limited in accordance herewith.
(n) Limitation on Guaranty by Swiss Loan Party.
(i) If and to the extent that (x) any Loan Party incorporated in Switzerland
(each of them a “Swiss Loan Party”) guarantees or secures, or grants an
indemnity in respect of, obligations, liabilities, indemnities or undertakings
of a Loan Party other than the relevant Swiss Loan Party or any of its
Subsidiaries, i.e. obligations, liabilities, indemnities or undertakings of its
(direct or indirect) parent company (upstream security) or its sister companies
(cross-stream security) (“Upstream- or Cross-stream Obligations”), and (y) the
fulfillment of such Upstream- or Cross-stream Obligations constitutes a
repayment of capital (Einlagerückgewähr), a violation of the legally protected
reserves (gesetzlich geschützte Reserven) or the payment of a dividend or
constructive dividend (Gewinnausschüttung) under Swiss corporate law, then the
aggregate liability under such Upstream- or Cross-stream Obligations shall be
limited to that Swiss Loan Party’s Free Reserves Available for Distribution at
the time of the enforcement of the Upstream- or Cross-stream Obligations (all in
accordance with Art. 675 paragraph 2 and Art. 671 paragraph 1 and 2 no. 3 of the
Swiss Code of Obligations or Art. 798 paragraph 1 and Art. 801 of the Swiss Code
of Obligations respectively).
(ii) If and only to the extent required by applicable law in force at the
relevant time, for the purpose of clause (i) above, “Free Reserves Available for
Distribution” means the maximum amount of the relevant Swiss Loan Party’s
profits and reserves available for distribution at the time of the enforcement
of Upstream- or Cross-stream Obligations, being equal to the positive difference
between (x) the assets of the relevant Swiss Loan Party and (y) the aggregate of
(A) all liabilities other than Up- and Cross-stream Obligations, (B) the amount
of the registered share capital, and (C) the statutory reserves (gesetzliche
Reserven) to the extent such reserves must be maintained by mandatory law at any
given time. Each such amount shall

 

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be established in accordance with Swiss law and shall be confirmed by the
auditors of the relevant Swiss Loan Party based on an interim audited balance
sheet. The relevant Swiss Loan Party shall arrange for the interim audited
balance sheet and the confirmation of the auditors immediately after having been
requested to make a payment or the rights under any of the Loan Documents have
been asserted in relation to Upstream- or Cross-stream Obligations.
(iii) Upon the fulfillment of such Upstream- or Cross-stream Obligations, the
relevant Swiss Loan Party in respect of the relevant payments, shall (x) if and
to the extent required by applicable law (including any applicable treaties for
the avoidance of double taxation or bilateral agreements between Switzerland and
the European Union) in force at the relevant time, (A) use its best endeavors to
procure that such payments may be used to discharge its obligations and
liabilities under the Loan Documents without deduction of Swiss Federal
Withholding Tax by discharging the liability of such tax by notification
pursuant to applicable law rather than payment of the tax, (B) if the
notification procedure pursuant to sub-paragraph (A) above does not apply,
deduct the Swiss Federal Withholding Tax at such rate (1) as then in force or
(2) as provided by any applicable treaties for the avoidance of double taxation
or bilateral agreements between Switzerland and the European Union from any such
payments and promptly pay any such Swiss Federal Withholding Tax deducted to the
Swiss Federal Tax Administration, and (C) notify the European Collateral Agent
that such notification or deduction, as applicable, has been made, and provide
the European Collateral Agent with evidence that, as applicable, such a
notification of the Swiss Federal Tax Administration has been made or such Swiss
Federal Withholding Tax deducted has been paid to the Swiss Federal Tax
Administration, (y) use its best endeavors to procure that any person who is
entitled to a full or partial refund of the Swiss Federal Withholding Tax
deducted from such payments will promptly after such deduction (1) request a
refund of the Swiss Federal Withholding Tax under applicable law (including
treaties for the avoidance of double taxation or bilateral agreements between
Switzerland and the European Union), and (2) pay to the European Collateral
Agent upon receipt any amount so refunded; and (z) notwithstanding anything to
the contrary in the Loan Documents, not be required to gross up, indemnify or
hold harmless any Lender for the deduction of Swiss Federal Withholding Tax;
provided that this should not in any way limit any obligations of the Borrowers
or any of the other Loan Parties (other than any Swiss Loan Party) under the
Loan Documents to indemnify the Lenders in respect of the deduction of the Swiss
Federal Withholding Tax and, for the avoidance of doubt, the amount of any such
Swiss Withholding Tax shall constitute Secured Obligations of the Loan Parties
hereunder (other than any Swiss Loan Party).
(o) Each Loan Guarantor incorporated in Spain hereby expressly waives any right
to require attachment (excusion o orden) and any presumption of obligations
being several (division) under Articles 1,830 et. seq. of the Spanish Civil Code
(Código Civil).
Any guarantee, indemnity, obligation and liability granted or assumed pursuant
to Article X by a Spanish Loan Guarantor shall not extend to any obligation
incurred by any Loan Party to the extent that such guarantee, indemnity,
obligation or liability would constitute unlawful financial assistance within
the meaning of Article 81 of Spanish Act 1564/1989 dated 22 December on Limited
Liability Companies (Real Decreto Legislativo 1564/1989 de 22 de diciembre, por
el que se aprueba el Texto Refundido de la Ley de Sociedades Anónimas) or

 

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Article 40.5 of the Spanish Limited Liability Companies Act 2/1995 (Ley de
Sociedades de Responsabilidad Limitada).
The Lenders, the Administrative Agent, the European Borrower and the Spanish
Loan Party acknowledge and accept that the amendments made to the Existing
Credit Agreement as a consequence of this Agreement are of a modificative nature
(novación modificativa) and do not involve the cancellation or extinction of the
original obligations assumed by the Loan Parties under the Existing Credit
Agreement and, consequently, the Spanish Security Agreements remain in full
force and effect securing the “secured obligations” (as this term is defined in
the corresponding Spanish Security Agreement) as amended pursuant to this
Agreement.
(p) The obligations of each Guarantor organized under Austrian law under this
Agreement shall at all times be limited to the extent that such obligations
would not violate mandatory Austrian capital maintenance rules pursuant to
Austrian company laws, in particular, Section 82 of the Act on Companies with
Limited Liability (Gesetz über Gesellschaften mit beschränkter Haftung) or, as
applicable, Section 52 of the Austrian Act on Stock Corporations (Aktiengesetz).
(q) The total liability of any Loan Guarantor organized under the laws of
Belgium (each a “Belgian Loan Guarantor”) under this Section 10.01 shall (a) not
cover any liability which would constitute illegal financial assistance (as
determined in Article 629 (or Article 329, as applicable) of the Belgian
Companies Code) and (b) in any event be limited to an aggregate amount not
exceeding the sum of (without double counting):
(i) the aggregate of all principal amounts borrowed by a Belgian Loan Guarantor
(or its direct or indirect Subsidiaries) under any intragroup arrangement
(regardless of the form thereof, including through the subscription of debt
instrument) that have been financed directly or indirectly by a borrowing under
this Agreement (without any reduction for any repayment thereof); plus
(ii) the aggregate of (A) ninety per cent (90%) of such Belgian Loan Guarantor’s
net assets (eigen vermogen/capitaux propres) (as determined in accordance with
the Belgian Companies Code and accounting principles generally accepted in
Belgium) as shown by its most recent audited annual financial statements at the
time the relevant demand is made and (B) the amount equal to any subordinated
debt it may owe, at the time a demand for payment under this guarantee is made.
SECTION 10.02 Guaranty of Payment. This Loan Guaranty is a guaranty of payment
and not of collection. Each Loan Guarantor waives any right to require any
Agent, any Issuing Bank or any Lender to sue any Borrower, any other Loan
Guarantor, any other guarantor, or any other Person obligated for all or any
part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to
enforce its payment against any collateral securing all or any part of the
Guaranteed Obligations.
As an original and independent obligation under this Loan Guaranty, each Loan
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(a) indemnify each Guaranteed Party and its successors, endorsees, transferees
and assigns and keep the Guaranteed Parties indemnified against all costs,
losses, expenses and liabilities of whatever kind resulting from the failure by
the Loan Parties or any of them, to make due and punctual payment of any of the
Secured Obligations or resulting from any of the Secured Obligations being or
becoming void, voidable, unenforceable or ineffective against any Loan Party
(including, but without limitation, all legal and other costs, charges and
expenses incurred by each Guaranteed Party, or any of them, in connection with
preserving or enforcing, or attempting to preserve or enforce, its rights under
this Loan Guaranty); and
(b) pay on demand the amount of such costs, losses, expenses and liabilities
whether or not any of the Guaranteed Parties has attempted to enforce any rights
against any Loan Party or any other Person or otherwise.
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty. (a) Except as
otherwise provided for herein, the obligations of each Loan Guarantor hereunder
are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including: (i) any claim of waiver,
release, extension, renewal, settlement, surrender, alteration, or compromise of
any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any
change in the corporate existence, structure or ownership of any Borrower or any
other guarantor of or other person liable for any of the Guaranteed Obligations;
(iii) any insolvency, bankruptcy, winding-up, liquidation, reorganization or
other similar proceeding affecting any Obligated Party, or their assets or any
resulting release or discharge of any obligation of any Obligated Party; or
(iv) the existence of any claim, setoff or other rights which any Loan Guarantor
may have at any time against any Obligated Party, any Agent, any Issuing Bank,
any Lender, or any other person, whether in connection herewith or in any
unrelated transactions.
(b) The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.
(c) Further, the obligations of any Loan Guarantor hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of any Agent, any Issuing
Bank or any Lender to assert any claim or demand or to enforce any remedy with
respect to all or any part of the Guaranteed Obligations; (ii) any waiver or
modification of or supplement to any provision of any agreement relating to the
Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any
indirect or direct security for the obligations of any Borrower for all or any
part of the Guaranteed Obligations or any obligations of any other guarantor of
or other person liable for any of the Guaranteed Obligations; (iv) any action or
failure to act by any Agent, any Issuing Bank or any Lender with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Loan Guarantor
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would otherwise operate as a discharge of any Loan Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).
SECTION 10.04 Defenses Waived. To the fullest extent permitted by applicable
law, each Loan Guarantor hereby waives any defense based on or arising out of
any defense of any Borrower or any other Loan Guarantor or the unenforceability
of all or any part of the Guaranteed Obligations from any cause, or the
cessation from any cause of the liability of any Borrower or any other Loan
Guarantor, other than the indefeasible payment in full in cash of the Guaranteed
Obligations. Without limiting the generality of the foregoing, each Loan
Guarantor irrevocably waives acceptance hereof, presentment, demand, protest
and, to the fullest extent permitted by law, any notice not provided for herein,
as well as any requirement that at any time any action be taken by any person
against any Obligated Party, or any other person. Each Collateral Agent may, at
its election, foreclose on any Collateral held by it by one or more judicial or
nonjudicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral
securing all or a part of the Guaranteed Obligations, compromise or adjust any
part of the Guaranteed Obligations, make any other accommodation with any
Obligated Party or exercise any other right or remedy available to it against
any Obligated Party, without affecting or impairing in any way the liability of
such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed
Obligations have been fully and indefeasibly paid in cash. To the fullest extent
permitted by applicable law, each Loan Guarantor waives any defense arising out
of any such election even though that election may operate, pursuant to
applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Loan Guarantor against any Obligated
Party or any security.
SECTION 10.05 Rights of Subrogation. No Loan Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Agents, the Issuing Banks and the Lenders and no
Obligation is outstanding.
SECTION 10.06 Reinstatement; Stay of Acceleration. If at any time any payment of
any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Borrower or otherwise, each Loan Guarantor’s obligations under this Loan
Guaranty with respect to that payment shall be reinstated at such time as though
the payment had not been made and whether or not the Agents, the Issuing Banks
and the Lenders are in possession of this Loan Guaranty. If acceleration of the
time for payment of any of the Guaranteed Obligations is stayed upon the
insolvency, bankruptcy or reorganization of any Borrower, all such amounts
otherwise subject to acceleration under the terms of any agreement relating to
the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors
forthwith on demand by the Lender.
SECTION 10.07 Information. Each Loan Guarantor assumes all responsibility for
being and keeping itself informed of the Borrowers’ financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
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any duty to advise any Loan Guarantor of information known to it regarding those
circumstances or risks.
SECTION 10.08 [Reserved].
SECTION 10.09 Maximum Liability. The provisions of this Loan Guaranty are
severable, and in any action or proceeding involving any corporate law, or any
provincial, state, federal or foreign bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of any
Loan Guarantor under this Loan Guaranty would otherwise be held or determined to
be void, voidable, avoidable, invalid or unenforceable on account of the amount
of such Loan Guarantor’s liability under this Loan Guaranty, then,
notwithstanding any other provision of this Loan Guaranty to the contrary, the
amount of such liability shall, without any further action by the Loan
Guarantors or the Lenders, be automatically limited and reduced to the highest
amount that is valid and enforceable as determined in such action or proceeding
(such highest amount determined hereunder being the relevant Loan Guarantor’s
“Maximum Liability”). This Section with respect to the Maximum Liability of each
Loan Guarantor is intended solely to preserve the rights of the Lenders to the
maximum extent not subject to avoidance under applicable law, and no Loan
Guarantor nor any other person or entity shall have any right or claim under
this Section with respect to such Maximum Liability, except to the extent
necessary so that the obligations of any Loan Guarantor hereunder shall not be
rendered voidable under applicable law. Each Loan Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the Maximum
Liability of each Loan Guarantor without impairing this Loan Guaranty or
affecting the rights and remedies of the Lenders hereunder; provided that
nothing in this sentence shall be construed to increase any Loan Guarantor’s
obligations hereunder beyond its Maximum Liability.
SECTION 10.10 Limitations on Enforcement in respect of German Loan Parties
(a) Each Lender agrees to restrict the enforcement of any Loan Guaranty or
indemnity granted pursuant to this Agreement by a German Loan Party which is
constituted in the form of a German limited liability company (Gesellschaft mit
beschränkter Haftung — GmbH) or a limited partnership (Kommanditgesellschaft)
with a GmbH as its sole general partner (Komplementär — GmbH & Co. KG) (each a
“Specified German Guarantor”) to the extent that (i) such Loan Guaranty or
indemnity secures liabilities of its direct or indirect shareholder(s) or
partners (upstream) or any entity affiliated to such shareholder or partner
(verbundenes Unternehmen) within the meaning of section 15 of the German Stock
Corporation Act (Aktiengesetz) (cross-stream) (other than the liabilities of any
Subsidiary of a Specified German Guarantor and, for the avoidance of doubt, the
own liabilities of such Specified German Guarantor) and (ii) the payment under
such Loan Guaranty or indemnity would cause the amount of a Specified German
Guarantor’s net assets (or, if a Specified German Guarantor is a GmbH & Co. KG,
the net assets of its general partner), as adjusted pursuant to the following
provisions, to fall below the amount of its or its general partner’s registered
share capital (Stammkapital) (Begründung einer Unterbilanz) or to increase any
already existing capital impairment (Vertiefung einer Unterbilanz) in violation
of sections 30 and 31 GmbHG, (each such event is hereinafter referred to as a
“Capital Impairment”). For the purposes of the calculation of a Capital
Impairment, the following balance sheet items shall be adjusted as follows:

 

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(i) the amount of any increase of the Specified German Guarantor’s or its
general partner’s registered share capital after the date of this Agreement that
has been effected without prior written consent of the European Administrative
Agent shall be deducted from the Specified German Guarantor’s or its general
partner’s registered share capital
(ii) loans provided to the Specified German Guarantor or its general partner by
any member of the group shall be disregarded if and to the extent such loans are
subordinated or are considered subordinated by operation of law and such loans
are not shown in the balance sheet as liability of the Specified German
Guarantor or its general partner, as applicable; and
(iii) loans or other contractual liabilities incurred in violation of the
provisions of the Loan Documents shall be disregarded.
(b) In a situation where a Specified German Guarantor or its general partner
would not have sufficient assets to maintain its registered share capital after
satisfaction (in whole or in part) of the relevant demand, such Specified German
Guarantor or its general partner shall dispose of all assets, to the extent
legally permitted, which are not necessary for its business (nicht
betriebsnotwendig) on market terms where the relevant assets are shown in the
balance sheet of such Specified German Guarantor or its general partner with a
book value which is significantly lower than the market value of such assets,
unless such disposal would not be commercially justifiable, provided that the
European Collateral Agent consents to the fact that a disposal would not be
commercially justifiable.
(c) The limitation pursuant to this Section 10.10 shall apply, subject to the
following requirements, if following the call of guarantee obligations by a
Lender, the Specified German Guarantor or its general partner notifies the
European Collateral Agent (“Management Notification”) within 15 Business Days
upon receipt of the relevant demand that a Capital Impairment would occur
(setting out in reasonable detail to what extent a Capital Impairment would
occur and providing prima facie evidence that a realization or other measures
undertaken in accordance with the mitigation provisions set out above would not
prevent such Capital Impairment). If the Management Notification is contested by
the European Collateral Agent or the Lenders, the Specified German Guarantor
undertakes (at its own cost and expense) to arrange for the preparation of a
balance sheet by the applicable auditors in order to have such auditors
determine whether (and if so, to what extent) any payment under the Loan
Guaranty would cause a Capital Impairment (the “Auditor’s Determination”). The
Auditor’s Determination shall be prepared, taking into account the adjustments
set out in Sections 10.10(a)(i), (ii) and (iii) above, by applying the generally
accepted accounting principles applicable from time to time in Germany
(Grundsätze ordnungsmäßiger Buchführung) based on the same principles and
evaluation methods as constantly applied by the Specified German Guarantor (and
its general partner, if applicable) in the preparation of its financial
statements, in particular in the preparation of its most recent annual balance
sheet, and taking into consideration applicable court rulings of German courts.
The Specified German Guarantor shall provide the Auditor’s Determination to the
European Collateral

 

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Agent within 25 Business Days from the date on which the European Collateral
Agent contested the Management Notification in writing. The Auditor’s
Determination shall be binding on the Specified German Guarantor and the
Lenders.
(d) Notwithstanding the above, the provisions of paragraph (a) of this
Section 10.10 shall not apply:
(i) if the Specified German Guarantor is party as dominated entity (beherrschtes
Unternehmen) of a domination agreement (Beherrschungsvertrag) and/or a profit
and loss agreement (Gewinnabführungsvertrag) pursuant to section 30 para 1
sentence 2 of the Limited Liability Company Act (GmbHG) unless the dominating
entity is insolvent;
(ii) if the Specified German Guarantor (or its general partner, if applicable)
has a recourse right (Rückgriffsanspruch) towards its direct or indirect
shareholder(s) or partners (upstream) or any entity affiliated to such
shareholder or partner (verbundenes Unternehmen) within the meaning of section
15 of the German Stock Corporation Act (Aktiengesetz) (cross-stream) which is
fully recoverable (werthaltig), whereby (a) the full recoverability
(Werthaltigkeit) is assumed, unless the Specified German Guarantor sets out in
reasonable detail to what extent the recourse right (Rückgriffsanspruch) is not
fully recoverable (nicht vollwertig) and, if reasonably requested by the
European Collateral Agent, an auditor has confirmed that the recourse right
(Rückgriffsanspruch) is not fully recoverable (nicht vollwertig) pursuant to
section 30 para 1 sentence 2 of the Limited Liability Company Act (GmbHG) and
(b) the Specified German Guarantor ensures that such a recourse right
(Rügriffsanspruch) is agreed with the relevant shareholder, partner or
affiliated entity referred to above;
(iii) for so long as the Specified German Guarantor or its general partner fail
to deliver the Management Notification and/or the Auditor’s Determination
pursuant to Section 10.10(c), unless the Specified German Guarantor or its
general partner, as applicable, prove in a court proceeding that the disputed
amount is necessary for maintaining its registered share capital;
(iv) to any amounts borrowed under the Loan Documents to the extent the proceeds
of such borrowing are on-lent to the Specified German Guarantor or its general
partner or its subsidiaries to the extent that any amounts so on-lent are still
outstanding at the time the relevant demand is made against the Specified German
Guarantor or its general partner and the repayment of such loans as a result of
such on-lending is not prohibited by operation of law; or
(v) (for the avoidance of doubt) to any amounts borrowed under the Loan
Documents by the Specified German Guarantor or its general partner to the extent
that any amounts so borrowed are still outstanding at the time the relevant
demand for repayment is made against the Specified German Guarantor or its
general partner.

 

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SECTION 10.11 Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Loan Guaranty, each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such
payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage”
with respect to any such payment or loss by a Paying Guarantor shall be
determined as of the date on which such payment or loss was made by reference to
the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has
not been determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Loan Guarantors hereunder (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Guarantor, the aggregate amount of all monies received
by such Loan Guarantors from the Borrowers after the date hereof (whether by
loan, capital infusion or by other means). Nothing in this provision shall
affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of
the Loan Guarantors covenants and agrees that its right to receive any
contribution under this Loan Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations. This provision is for the benefit of the Administrative
Agent, the Collateral Agents, the Issuing Banks, the Lenders and the Loan
Guarantors and may be enforced by any one, or more, or all of them in accordance
with the terms hereof.
SECTION 10.12 Liability Cumulative. The liability of each Loan Party as a Loan
Guarantor under this Article X is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Agents, the Issuing Banks and the
Lenders under this Agreement and the other Loan Documents to which such Loan
Party is a party or in respect of any obligations or liabilities of the other
Loan Parties, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
SECTION 10.13 Place of Performance. (a) At all times, the exclusive place of
performance (Erfüllungsort) of all rights and obligations under this Agreement
and the other Loan Documents shall be at place where the Administrative Agent
has its office in New York, New York or any other place reasonably designated by
the Administrative Agent from time to time. The performance of any rights and
obligations under this Agreement and any other Loan Document shall in no case be
deemed to be in the Republic of Austria. For the avoidance of doubt, all
payments made hereunder by any European Loan Party shall be deemed to be made at
the place where the applicable Collection Account from which such payment is
made is held and, with respect to any Collection Account held in the Republic of
Austria, payments made from such account hereunder shall be deemed to have been
made at the place where the head office of the European Collateral Agent in the
Netherlands is domiciled or at any other place reasonably designated by the
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time. Payments hereunder are to be made only in bank accounts maintained outside
of the Republic of Austria.
(b) No original or certified copy of this Agreement or any other Loan Document
shall be brought into the Republic of Austria. Notwithstanding anything
aforesaid, nothing herein shall prevent the parties hereto from bringing an
original or certified copy of this Agreement or any other Loan Document into the
Republic of Austria if this is required to enforce or defend their rights
arising out of, or in connection with, this Agreement or any other Loan
Document.
(c) In case of any dispute in an Austrian court the parties hereto agree that
the original text of this Agreement and any other Loan Document shall be
explicitly accepted without further evidence (außer Streit gestellt) in such
proceedings. If any party hereto should not explicitly accept (außer Streit
stellen) the original wording of these documents in proceedings in an Austrian
court, such party shall solely bear all stamp duties and other related charges,
fees, interest and costs levied by Austrian tax authorities if consequently a
copy of any or all of such documents need to be submitted to the Austrian court.
ARTICLE XI
The Borrower Representative
SECTION 11.01 Appointment; Nature of Relationship. The Company is hereby
appointed by each of the Borrowers as its contractual representative (herein
referred to as the “Borrower Representative”) hereunder and under each other
Loan Document, and each of the Borrowers irrevocably authorizes the Borrower
Representative to act as the contractual representative of such Borrower with
the rights and duties expressly set forth herein and in the other Loan
Documents. The Borrower Representative agrees to act as such contractual
representative upon the express conditions contained in this Article XI.
Additionally, each Borrower hereby appoints, to the extent the Borrower
Representative requests any Loan on behalf of such Borrower, the Borrower
Representative as its agent to receive all of the proceeds of such Loan in the
Funding Account(s), at which time the Borrower Representative shall promptly
disburse such Loan to such Borrower. Neither the Agents, the Lenders nor the
Issuing Banks and their respective officers, directors, agents or employees,
shall be liable to the Borrower Representative or any Borrower for any action
taken or omitted to be taken by the Borrower Representative or the Borrowers
pursuant to this Section 11.01.
SECTION 11.02 Powers. The Borrower Representative shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Borrower Representative by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Borrower Representative shall have no
implied duties to the Borrowers, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Borrower Representative.
SECTION 11.03 Employment of Agents. The Borrower Representative may execute any
of its duties as the Borrower Representative hereunder and under any other Loan
Document by or through authorized officers.

 

211

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SECTION 11.04 Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default hereunder, each such notice to
refer to this Agreement describing such Default and stating that such notice is
a “notice of default.” In the event that the Borrower Representative receives
such a notice, the Borrower Representative shall give prompt notice thereof to
the Administrative Agent, the Collateral Agents and the Lenders. Any notice
provided to the Borrower Representative hereunder shall constitute notice to
each Borrower on the date received by the Borrower Representative.
SECTION 11.05 Successor Borrower Representative. Upon the prior written consent
of the Administrative Agent, the Borrower Representative may resign at any time,
such resignation to be effective upon the appointment of a successor Borrower
Representative acceptable to the Administrative Agent. The Administrative Agent
shall give prompt written notice of such resignation to the Lenders.
SECTION 11.06 Execution of Loan Documents; Borrowing Base Certificate. The
Borrowers hereby empower and authorize the Borrower Representative, on behalf of
the Borrowers, to execute and deliver to the Agents and the Lenders the Loan
Documents and all related agreements, certificates, documents, or instruments as
shall be necessary or appropriate to effect the purposes of the Loan Documents,
including without limitation, any Borrowing Base Certificate and any
certificates required pursuant to Article V. Each Borrower agrees that any
action taken by the Borrower Representative or the Borrowers in accordance with
the terms of this Agreement or the other Loan Documents, and the exercise by the
Borrower Representative of its powers set forth therein or herein, together with
such other powers that are reasonably incidental thereto, shall be binding upon
all of the Borrowers.
SECTION 11.07 Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each fiscal month to the Borrower Representative a copy
of its Borrowing Base Certificate and any other certificate or report required
hereunder or requested by the Borrower Representative on which the Borrower
Representative shall rely to prepare the Aggregate Borrowing Base Certificate
and the Borrowing Base Certificate of each Borrower and Compliance Certificates
required pursuant to the provisions of this Agreement. For the purpose of this
Section 11, the Borrower Representative of each German Loan Party is hereby
released from the restrictions of section 181 German Civil Code (BGB). Each
German Loan Party represents to each of the Lenders that the release hereby
granted is effective under the term of its constitutional documents.

 

212

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

                      BORROWERS:    
 
                    LIZ CLAIBORNE, INC.    
 
               
 
  By:   /s/ Nicholas Rubino                  
 
      Name:   Nicholas Rubino    
 
      Title:   SVP, Chief Legal Officer, General Counsel and Corporate Secretary
   
 
                    LIZ CLAIBORNE CANADA INC.    
 
               
 
  By:   /s/ Nicholas Rubino                   
 
      Name:   Nicholas Rubino     
 
      Title:   Director    
 
                    MEXX EUROPE B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    JUICY COUTURE EUROPE LIMITED    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis     
 
      Title:   Attorney in fact     

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                  LOAN PARTIES (OTHER THAN BORROWERS):    
 
                BOODLE, INC.         DB NEWCO CORP.         HAVANA LLC        
JERG, INC.         JUICY COUTURE, INC.         KATE SPADE LLC         L. C.
AUGUSTA, INC.         L.C. CARIBBEAN HOLDINGS, INC.         L.C. LICENSING, INC.
        L.C. SERVICE COMPANY, INC.         L.C. SPECIAL MARKETS, INC.         LC
LIBRA, LLC         LCI ACQUISITION U.S., INC.         LCI HOLDINGS, INC.        
LCI INVESTMENTS, INC.         LIZ CLAIBORNE ACCESSORIES, INC.         LIZ
CLAIBORNE ACCESSORIES-SALES, INC.         LIZ CLAIBORNE COSMETICS, INC.        
LIZ CLAIBORNE EXPORT, INC.         LIZ CLAIBORNE FOREIGN HOLDINGS, INC.        
LIZ CLAIBORNE JAPAN, INC.         LIZ CLAIBORNE PUERTO RICO, INC.         LIZ
CLAIBORNE SALES, INC.         LIZ CLAIBORNE SHOES, INC.         LUCKY BRAND
DUNGAREES, INC.         LUCKY BRAND DUNGAREES STORES, INC.         MONET
INTERNATIONAL, INC.         MONET PUERTO RICO, INC.         NONEE I HOLDING, LLC
        NONEE I, LLC         SEGRETS, INC.         SKYLARK SPORT MARKETING
CORPORATION         WESTCOAST CONTEMPO PROMENADE, INC.         WESTCOAST
CONTEMPO RETAIL, INC.         WESTCOAST CONTEMPO (U.S.A.) INC.    
 
           
 
  By:   /s/ Nicholas Rubino
 
     
 
Name: Nicholas Rubino    
 
      Title:   SVP, Chief Legal Officer, General Counsel
            and Corporate Secretary     

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                      JUICY COUTURE CANADA INC.    
 
               
 
  By:   /s/ Mark Weisz                  
 
      Name:   Mark Weisz    
 
      Title:   Director    
 
                    JUICY COUTURE IRELAND LIMITED    
 
               
 
  By:   /s/ G. J. Berghuis                  
 
      Name:   G. J. Berghuis    
 
      Title:   Attorney in fact    
 
                    LIZ CLAIBORNE EUROPE    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX AUSTRIA GMBH    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX BELGIUM NV    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                      RETRAIN NV    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX SCANDINAVIA FINLAND OY    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX BOUTIQUES SARL    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX DEUTSCHLAND GMBH    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX DIRECT GMBH & CO KG    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                      MEXX HOLDING GMBH    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX MODEHANDELS GMBH    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    VERWALTUNGSGESELLSCHAFT MEXX DIRECT MBH    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX HELLAS EPE    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Administrator    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                      MEXX IRELAND LIMITED    
 
               
 
      /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
               
 
      /s/ I.J.S. Vhegen                  
 
      Name:   I.J.S. Vhegen    
 
      Title:   Director/Secretary    
 
                    MEXX ITALY S.R.L.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX LUXEMBOURG S.À.R.L.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    LIZ CLAIBORNE 3 B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    LIZ CLAIBORNE 2 B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                      MEXX DIRECT HOLDING B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX EUROPE HOLDING B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX EUROPE INTERNATIONAL B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX GROUP B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX HOLDING INTERNATIONAL B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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                      MEXX HOLDING NETHERLANDS B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX NEDERLAND B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX NEDERLAND RETAIL B.V.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX SCANDINAVIA AS    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    
 
                    MEXX SOUTHERN EUROPE, S.L.    
 
               
 
  By:   /s/ G.J. Berghuis                  
 
      Name:   G.J. Berghuis    
 
      Title:   Director    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            MEXX MODEHANDELS AG
      By:   /s/ G.J. Berghuis       Name:   G.J. Berghuis       Title:  
Director       MEXX SWITZERLAND GMBH
      By:   /s/ G.J. Berghuis       Name:   G.J. Berghuis       Title:  
Director       MEXX LIMITED
      By:   /s/ G.J. Berghuis       Name:   G.J. Berghuis       Title:  
Director       WESTCOAST CONTEMPO FASHIONS LIMITED
      By:   /s/ Nicholas Rubino       Name:   Nicholas Rubino       Title:  
Director       MEXX SCANDINAVIA AB
      By:   /s/ G.J. Berghuis       Name:   G.J. Berghuis       Title:  
Director    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            MEXX EUROPRODUCTION B.V.
      By:   /s/ G.J. Berghuis       Name:   G.J. Berghuis       Title:  
Managing Director    

            MEXX SPORT BENELUX B.V.
      By:   /s/ G.J. Berghuis       Name:   G.J. Berghuis       Title:  
Director  

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            JPMORGAN CHASE BANK, N.A., individually, as
Administrative Agent, US Collateral Agent and Lender
      By:   /s/ Scott Troy       Name:   Scott Troy       Title:   Vice
President  

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            J.P. MORGAN EUROPE LIMITED, individually, as European
Administrative Agent and European Collateral Agent
      By:   T.J. Jacob       Name:   Tim Jacob       Title:   Senior Vice
President  

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
individually, as Canadian Administrative Agent and
Canadian Collateral Agent
      By:   /s/ A. Marchetti       Name:   Auggie Marchetti       Title:   SVP  

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            BANK OF AMERICA, N.A., individually, as Lender
      By:   /s/ Christine Hutchinson       Name:   Christine Hutchinson      
Title:   Principal    

Signature Page to the Second Amended and Restated Credit Agreement

         

 

 

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            GENERAL ELECTRIC CAPITAL CORPORATION,
individually, as Lender
      By:   /s/ Peter F. Crispino       Name:   Peter F. Crispino       Title:  
Duly Authorized Signatory  

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND),
individually, as a Lender
      By:   /s/ Justin Button       Name:   Justin Button       Title:   VP    

Signature Page to the Second Amended and Restated Credit Agreement

 

 

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            SUNTRUST BANK,
individually, as a Lender
      By:   /s/ Angela Leake       Name:   Angela Leake       Title:   Vice
President  

Signature Page to the Second Amended and Restated Credit Agreement