Exhibit 10.4

 

PROMISSORY NOTE

 

THE LIENS AND SECURITY INTERESTS GRANTED BY THE BORROWER TO THE NOTEHOLDER UNDER
THE SECURITY AGREEMENT (AS DEFINED BELOW) TO SECURE THE OBLIGATIONS AND THE
INDEBTEDNESS EVIDENCED BY THIS NOTE AND THE EXERCISE OF ANY RIGHTS, REMEDIES,
DUTIES AND OBLIGATIONS PROVIDED FOR IN THIS NOTE AND IN THE SECURITY AGREEMENT
ARE SUBJECT TO THE PROVISIONS SET FORTH IN THAT CERTAIN SELLER NOTE
SUBORDINATION AGREEMENT, DATED AS OF THE DATE HEREOF (THE “INTERCREDITOR
AGREEMENT”), AMONG THE NOTEHOLDER, BARCLAYS BANK PLC, JPMORGAN CHASE BANK, N.A.
AND THE BORROWER, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL
BE BOUND BY THE PROVISIONS OF SUCH INTERCREDITOR AGREEMENT AND IN THE EVENT OF
ANY CONFLICT BETWEEN THE TERMS OF THIS NOTE OR THE TERMS OF THE SECURITY
AGREEMENT AND THE TERMS OF THE INTERCREDITOR AGREEMENT, THE TERMS OF THE
INTERCREDITOR AGREEMENT SHALL GOVERN.

 

JUNIOR LIEN SECURED PROMISSORY NOTE

 

$125,000,000.00 December 1, 2016

 

FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein,
G-III Leather Fashions, Inc., a New York corporation, and G-III Apparel Group,
Ltd., a Delaware corporation (individually and collectively, and jointly and
severally, the “Borrower”), hereby unconditionally promise to pay to the order
of LVMH Moet Hennessy Louis Vuitton Inc., a Delaware corporation, or its assigns
(the “Noteholder,” and together with the Borrower, the “Parties”), the principal
amount of One Hundred Twenty-Five Million and No/100 Dollars ($125,000,000.00)
(the “Loan”), together with all accrued interest thereon, as provided in this
Junior Lien Secured Promissory Note (this “Note”). For purposes of this Note,
the Loan shall be apportioned as follows: Seventy-Five Million and No/100
Dollars of the Loan shall be referred to as (the “First Loan Portion”) and Fifty
Million and No/100 Dollars of the Loan shall be referred to as (the “Second Loan
Portion”)

 

1.         Reference to Purchase Agreement. This Note is executed and delivered
pursuant to that certain Stock Purchase Agreement, dated as of July 22, 2016, by
and among Borrower and the Noteholder, as amended by the certain Amendment No. 1
dated as of November 30, 2016 (as so amended, the “Purchase Agreement”).
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Purchase Agreement.

 

2.         Repayment; Prepayment.

 

2.1          The aggregate unpaid principal amount of the Loan, all accrued and
unpaid interest and all other amounts payable under this Note shall be due and
payable on the earlier of (i) with respect to the First Loan Portion, June 1,
2023 (ii) with respect to the Second Loan Portion, December 1, 2023, and (iii)
the date on which all amounts under this Note shall become due and payable
pursuant to Section 7.

 

   

 

  

2.2          The Borrower may prepay the Loan in whole or in part (and, if in
part, the Borrower shall specify how much of such prepayment relates to the
First Loan Portion and the Second Loan Portion, respectively) at any time or
from time to time without penalty or premium by paying the principal amount to
be prepaid together with accrued interest and all other amounts due thereon to
the date of prepayment. No prepaid amount may be reborrowed.

 

3.         Interest.

 

3.1          Interest Rate. Except as otherwise provided herein, the outstanding
principal amount of the Loan made hereunder shall bear interest at the simple
interest rate equal to two percent (2%) per annum (the “Applicable Rate”) from
the date hereof until, but not including, the day that the Loan is paid in full,
whether at maturity, upon acceleration, by prepayment or otherwise.

 

3.2          Interest Payment Dates. The Borrower shall pay interest on the Loan
quarterly in arrears to the Noteholder on the last Business Day of each March,
June, September and December commencing on the first such date to occur after
the execution of this Note.

 

3.3          Default Interest. If any amount payable hereunder is not paid when
due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such overdue amount shall bear interest
at the Applicable Rate plus two percent (2%) per annum (the “Default Rate”) from
the date of such non-payment until such amount is paid in full.

 

3.4          Computation of Interest. All computations of interest shall be made
on the basis of a year of 365 days (or 366 days, in the event of a leap year)
and the actual number of days elapsed. Interest shall accrue on the Loan from
the original date of issuance of this Note, and shall not accrue on the Loan for
the day on which it is paid.

 

3.5          Interest Rate Limitation. If at any time and for any reason
whatsoever, the interest rate payable on the Loan shall exceed the maximum rate
of interest permitted to be charged by the Noteholder to the Borrower under
applicable law, that portion of each sum paid attributable to that portion of
such interest rate that exceeds the maximum rate of interest permitted by
applicable law shall be deemed a voluntary prepayment of principal.

 

4.         Payment Mechanics.

 

4.1          Manner of Payments. All payments of interest and principal shall be
made in lawful money of the United States of America no later than 12:00 PM
(Eastern time) on the date on which such payment is due by cashier’s check,
certified check or by wire transfer of immediately available funds to the
Noteholder’s account at a bank specified by the Noteholder in writing to the
Borrower from time to time.

 

4.2          Application of Payments. All payments made hereunder shall be
applied first to the payment of any fees or charges outstanding hereunder,
second to accrued interest, and third to the payment of the principal amount
outstanding under the Note.

 

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4.3          Business Day Convention. Whenever any payment to be made hereunder
shall be due on a day that is not a Business Day, such payment shall be made on
the next succeeding Business Day and such extension will be taken into account
in calculating the amount of interest payable under this Note.

 

4.4          Rescission of Payments. If at any time any payment made by the
Borrower under this Note is rescinded or must otherwise be restored or returned
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
the Borrower’s obligation to make such payment shall be reinstated as though
such payment had not been made.

 

5.         Security Agreement. The Borrower’s performance of its obligations
hereunder is secured by a security interest in the collateral specified in the
Security Agreement, dated as of the date hereof (the “Security Agreement”), by
and among Borrower and the Noteholder.

 

6.         Events of Default. The occurrence and continuance of any of the
following shall constitute an Event of Default hereunder:

 

6.1          Failure to Pay. The Borrower fails to pay (a) any principal amount
of the Loan when due or (b) interest or any other amount when due and such
failure continues for five (5) Business Days after the due date thereof.

 

6.2          Breach of Representations and Warranties. Any representation or
warranty made or deemed made by the Borrower to the Noteholder in the Security
Agreement is incorrect in any material respect on the date as of which such
representation or warranty was made or deemed made.

 

6.3          Breach of Covenants. The Borrower fails to observe or perform in
any material respect any covenant, obligation, condition or agreement contained
in this Note or the Security Agreement that is not qualified as to materiality,
or fails to observe or perform in any respect any other covenant, obligation,
condition or agreement contained in this Note, the Purchase Agreement or the
Security Agreement that is qualified as to materiality, in each case, other than
those specified in Section 6.1 hereof and such failure continues for thirty (30)
days after written notice by the Noteholder to the Borrower.

 

6.4          Cross-Acceleration. The Borrower shall default under any mortgage,
indenture or instrument under which there is issued or by which there is secured
or evidenced any Indebtedness for money borrowed by the Borrower or the payment
of which is guaranteed by the Borrower (other than Indebtedness owed to any
subsidiary of the Borrower), whether such Indebtedness or guarantee now exists
or is created after the date hereof, if both:

 

(a) such default either results from the failure to pay any principal of such
Indebtedness at its stated final maturity (after giving effect to any applicable
grace periods) or relates to an obligation other than the obligation to pay
principal of any such Indebtedness at its stated final maturity and results in
the holder or holders of such Indebtedness causing such Indebtedness to become
due prior to its stated final maturity; and

 

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(b) the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default for failure to pay principal at
its stated final maturity (after giving effect to any applicable grace periods),
or the maturity of which has been so accelerated, aggregates $35.0 million or
more at any one time outstanding.

 

For purpose of this Section 6.4:

 

“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, (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
accounts and other trade payables not overdue more than 90 days 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 Capital Lease Obligations of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (i) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances, (j) all obligations of such Person
under any earn-out or similar arrangement, to the extent such obligations would
appear as a liability on a balance sheet (excluding the footnotes) of such
person in accordance with GAAP, (k) any other Off-Balance Sheet Liability of
such Person; and (l) all guarantees by such Person of Indebtedness (described in
the other clauses of this definition) of others, provided that for the avoidance
of doubt, any guarantee by the Borrower of obligations of another Person that do
not constitute Indebtedness of such Person shall not constitute Indebtedness of
the Borrower. The Indebtedness of any Person shall include 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.

 

“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.         

 

“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

 

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accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

 

“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).

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, governmental authority
or other entity.

 

6.5          Bankruptcy

 

(a)          an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization, arrangement or
other relief in respect of the Borrower or its debts, or of a substantial part
of its assets, under any federal, state, provincial, territorial or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, interim receiver, receiver and manager,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or for a substantial part of its assets, 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;

 

(b)          the Borrower shall (i) voluntarily commence any plan of
arrangement, proposal or proceeding, or make an assignment into bankruptcy or
file any petition seeking liquidation, reorganization or other relief under any
federal, state, provincial, territorial or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (a) of this Section 6.5, (iii) apply
for or consent to the appointment of a receiver, interim receiver, receiver and
manager, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing.

 

7.         Remedies.   Upon the occurrence of any Event of Default and at any
time thereafter during the continuance of such Event of Default, the Noteholder
may at its option, by written notice to the Borrower (a) declare the entire
principal amount of this Note, together with all accrued interest thereon and
all other amounts payable hereunder, immediately due and payable; and/or (b)
exercise any or all of its rights, powers or remedies under the Security
Agreement or applicable law, subject to any applicable limitations set forth in
the Intercreditor

 

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Agreement; provided, however, that, if an Event of Default described in Section
6.5 shall occur, the principal of and accrued interest on the Loan shall become
immediately due and payable without any notice, declaration or other act on the
part of the Noteholder.

 

8.         Indemnification.  The Borrower shall and hereby does indemnify the
Noteholder against any and all losses and expenses (including attorneys’
reasonable fees and costs), and shall pay to the Holder on demand the amount of
all such losses and expenses, that the Noteholder sustains or incurs, whether
directly or indirectly, as a consequence of the occurrence of any event or
condition that entitles or would, with the passage of time, giving of notice, or
both, entitle the Noteholder to accelerate the indebtedness of the Borrower due
under this Note. Any loss or expense due and owing to the Noteholder pursuant to
the terms and provisions of this Section 8 shall bear interest at the Default
Rate from and after the date that is ten (10) Business Days after demand is made
to the indemnifying party for payment of such loss or expense and continuing
through the date on which all such losses, expenses and interest are paid in
full.

 

9.         Miscellaneous.

 

9.1          Successors and Assigns.  This Note may be assigned or transferred
by the Noteholder to any direct or indirect wholly-owned subsidiary of LVMH Moet
Hennessy Louis Vuitton SE without the prior written consent of the Noteholder
and to any other Person only after receipt of the prior consent of the
Noteholder. The Borrower may not assign or transfer this Note or any of its
rights hereunder without the prior written consent of the Noteholder. This Note
shall inure to the benefit of, and be binding upon, the Parties and their
permitted assigns.

 

9.2          Legal Tender of United States.  All payments hereunder shall be
made in coin or currency which at the time of payment is legal tender in the
United States of America for public and private debts.

 

9.3          Time of Essence.  Time is of the essence of this Note.

 

9.4          Notices.  All notices, requests, demands, claims and other
communications required or permitted hereunder shall be in writing and shall be
sent by nationally recognized overnight courier. Any notice, request, demand,
claim or other communication required or permitted hereunder will be deemed duly
delivered one (1) Business Day (or five (5) Business Days of being sent
internationally) after being sent by nationally recognized commercial overnight
courier service, with confirmation of receipt, to the Borrower or the Noteholder
at the following addresses (or at such other addresses for the Borrower or the
Noteholder as shall be specified upon like notice):

 

(a)          if to the Noteholder:

 

LVMH Moet Hennessy Louis Vuitton Inc.

19 East 57th Street

New York, New York 10022

 

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Attention: Anish Melwani

 

with a copy to:

 

LVMH Moët Hennessy Louis Vuitton SE

22, avenue Montaigne

75008 Paris

France

Attention: M. Bernard Kuhn

 

and a copy to:

 

LVMH Moet Hennessy Louis Vuitton Inc.

19 East 57th Street

New York, New York 10022

Attention: Louise Firestone, Esq.

 

Barack Ferrazzano Kirschbaum & Nagelberg LLP

200 W. Madison Street

Suite 3900

Chicago, Illinois 60606

Attention: Peter J. Barack, Esq.

 

(b)          if to the Borrower:

 

G-III Apparel Group, Ltd.

512 Seventh Avenue

New York, New York 10018

Attention: Wayne S. Miller

 

with a copy to:

 

Norton Rose Fulbright US LLP

1301 Avenue of the Americas

New York, New York 10019

Attention:   Neil Gold, Esq.

       Manuel G. Rivera, Esq.

 

Notwithstanding the foregoing, any Party may send any notice, request, demand,
claim, or other communication required or permitted hereunder to the intended
recipient at the address set forth above using any other means (including
personal delivery, messenger service, facsimile

 

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transmission, ordinary mail or electronic mail); provided, however, that no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications required or permitted hereunder are to be
delivered by giving the other Parties notice in the manner herein set forth.

 

9.5          Expenses.  The Borrower shall reimburse the Noteholder on demand
after receipt of a reasonably detailed invoice from the Noteholder for all
reasonable and documented out-of-pocket costs, expenses and fees (including
reasonable expenses and fees of one firm of legal counsel) incurred by the
Noteholder in connection with the enforcement of the Noteholder’s rights under
this Note and the Security Agreement.

 

9.6          Confidential Arbitration.

 

(a)          Any claims or disputes arising out of, relating to, or in
connection with this Note will be finally settled by arbitration under the Rules
of Arbitration of the International Chamber of Commerce in force at the date of
the request for arbitration (the “ICC Rules”), including the rules thereof
pertaining to the production of documents and other information, except as they
may be modified herein (including in Section 9.6(a) below) or by mutual
agreement of the Parties. The seat of the arbitration will be New York, New
York, and it will be conducted in the English language. To the extent feasible,
multiple claims shall be consolidated in a single proceeding. It is the
intention of the Parties that all proceedings initiated pursuant to this Section
9.6 be conducted as expeditiously as reasonably possible. Each Party understands
that by making or accepting this Note, it is waiving any right it may have to
file a lawsuit or other civil action or proceeding relating to this Note, and
that it is waiving any right that it may have to resolve disputes through trial
by jury.

 

(b)          A Party seeking arbitration (the “Claimant”) will nominate an
arbitrator in the request for arbitration and statement of claim (the “Request
for Arbitration”), subject to confirmation by the International Court of
Arbitration of the International Chamber of Commerce (the “ICC Court”) or
Secretary General of the International Chamber of Commerce (the “Secretary
General”), as provided in the ICC Rules. After filing the Request for
Arbitration is complete pursuant to the ICC Rules, the Claimant will serve the
Request for Arbitration upon the other Party. Within ten (10) Business Days of
receipt of the filed Request for Arbitration, the Party against whom the claim
is made (the “Respondent”) will file and serve the Answer to the Request for
Arbitration and notify the Claimant and the ICC Court of an arbitrator that it
nominates, subject to confirmation as provided in the ICC Rules. Upon
confirmation by the ICC Court or the Secretary General of the two arbitrators
nominated by the Parties, such two arbitrators will select a third arbitrator,
who, once confirmed, shall serve as chairman of the arbitral panel; the
nomination of the third arbitrator shall be made within ten (10) Business Days
of the confirmation of the arbitrators nominated by the Parties. If the
arbitrators nominated by the Claimant and the Respondent cannot agree on a third
arbitrator within such time period, then the ICC Court will appoint the third
arbitrator, who shall serve as chairman of the arbitral panel. By whomever
appointed, the three arbitrators will act as the sole arbitrators in the
arbitral proceeding. The Parties specifically agree that, as to any

 

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proceeding initiated pursuant to this Section 9.6: (i) the arbitrators will be
empowered to award and order equitable or injunctive relief with respect to
matters brought before them; (ii) any taking of evidence that may be required
shall be handled expeditiously, and all disputes regarding the taking of
evidence shall be resolved by the arbitrators within ten (10) Business Days, or
as soon thereafter as practicable. It is the intent of the Parties that barring
extraordinary circumstances or unavailability of members of the arbitral panel,
(i) a hearing on the merits of all claims for which arbitration is sought by
either Party shall be commenced not later than ninety (90) days from the date
the ICC arbitration panel conducts the initial case management conference,
following issuance of the arbitral panel’s “Terms of Reference,” in accordance
with the ICC Rules, and (ii) the arbitral panel will submit a written draft
award to the ICC Court for its review, which shall reveal the essential findings
and conclusions on which the award is based, within thirty (30) days after the
conclusion of such hearing. Failure to adhere to these time limits shall not be
a basis for challenging the award or challenging the arbitral tribunal’s
jurisdiction. With respect to any arbitration proceeding arising under this
Note, the Parties further agree that with respect to any discovery in such
proceeding: (i) the arbitrators will not be empowered to provide for any
requests for documents beyond one (1) set of requests by each Party for the
production of documents by the other Party, which requests shall be submitted
within five (5) Business Days of Respondent’s submission of its Answer to the
Request for Arbitration; and (ii) each Party will be limited to one deposition,
with the Noteholder entitled to take a single deposition of one (1) corporate
representative of the Borrower and the Borrower entitled to take a single
deposition of one (1) corporate representative of the Noteholder, such corporate
representative depositions to be consistent with Federal Rule of Civil Procedure
30(b)(6). The award will be final and binding and non-appealable, and judgment
thereon may be entered by any Court of Competent Jurisdiction.

 

(c)          The Parties agree that each of them shall bear all of their own
fees, costs and expenses in connection with any arbitral proceeding initiated
pursuant to this Section 9.6, including but not limited to attorneys’ fees. The
cost of the three arbitrators shall be shared equally by the Claimant and the
Respondent.

 

(d)          Arbitration pursuant to this Section 9.6 shall be the exclusive
method available for resolution of claims, disputes and controversies described
in this Section 9.6, and the Parties stipulate that the provisions hereof shall
be a complete defense to any suit, action, or proceeding in any court or before
any administrative or arbitration tribunal with respect to any such claim,
controversy or dispute.

 

(e)          Notwithstanding the terms of this Section 9.6, each Party
acknowledges and agrees that the other Parties may be damaged irreparably if
this Note is not performed in accordance with its terms or otherwise is
breached, and that, at any time before and after a demand notice is presented,
the Parties shall be free to apply to any Court of Competent Jurisdiction for
interim or conservatory measures (including temporary conservatory injunctions),
in each case to prevent breaches of this Note, and to enforce specifically this
Note and its terms. The Parties acknowledge and agree that any such action by a
Party shall not be deemed to be a breach of such Party’s obligation to arbitrate
all disputes under this Section 9.6 or infringe upon the powers of any arbitral
panel.

 

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(f)           The Parties shall keep confidential, and not disclose the fact
that there is a dispute between the Parties, the details of the dispute, the
fact of the arbitration and all details relating to the proceeding, except as
required by Legal Requirement and consistent with the Parties’ right to limited
judicial review of the arbitrator’s award. All statements, documents, claims,
demands, transcripts, evidence, discovery materials or communications, whether
oral, written, electronic or in any other form, that are submitted or prepared
by any Party in connection with an arbitration proceeding initiated pursuant to
this Section 9.6 shall be Confidential Information for the purposes of the
Purchase Agreement.

 

9.7          Governing Law; Court of Competent Jurisdiction.   This Note shall
be governed by and construed in accordance with the laws of the State of New
York. Any proceeding initiated pursuant to Section 9.6 above shall incorporate
the substantive laws of the State of New York, except as modified by the terms
of Section 9.6. The Parties agree that any permissible action arising out of or
relating to this Note, including but not limited to an action for injunctive or
provisional relief or in connection with an arbitral award or proceeding, shall
be brought exclusively in a state or federal court of competent subject matter
jurisdiction located in the State of New York, New York County (a “Court of
Competent Jurisdiction”), irrevocably submit to the personal jurisdiction of any
such court, and waive any objection to the venue of such court and any argument
that such court is an inconvenient forum.

 

9.8          No Third Party Beneficiary.  This Note is made for the sole benefit
of the Parties, and no other Person shall be deemed to have any privity of
contract hereunder nor any right to rely hereon to any extent or for any purpose
whatsoever, nor shall any other Person have any right of action of any kind
hereon or be deemed to be a third party beneficiary hereunder.

 

9.9          Interpretation.   For purposes of this Note (a) the words
“include,” “includes” and “including” shall be deemed to be followed by the
words “without limitation”; (b) the word “or” is not exclusive; and (c) the
words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Note
as a whole. The definitions given for any defined terms in this Note shall apply
equally to both 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. Unless the context otherwise requires, references
herein: (x) to Sections mean the Sections of this Note; (y) to an agreement,
instrument or other document means such agreement, instrument or other document
as amended, supplemented and modified from time to time to the extent permitted
by the provisions thereof; and (z) to a statute means such statute as amended
from time to time and includes any successor legislation thereto and any
regulations promulgated thereunder. This Note shall be construed without regard
to any presumption or rule requiring construction or interpretation against the
party drafting an instrument or causing any instrument to be drafted.

 

9.10        Headings.  The headings of the various Sections and subsections
herein are for reference only and shall not define, modify, expand or limit any
of the terms or provisions hereof.

 

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9.11        Waiver of Notice.  The Borrower hereby waives demand for payment,
presentment for payment, protest, notice of payment, notice of dishonor, notice
of nonpayment, notice of acceleration of maturity and diligence in taking any
action to collect sums owing hereunder.

 

9.12        Amendments and Waivers.   No term of this Note may be waived,
modified or amended except by an instrument in writing signed by the Parties.
Any waiver of the terms hereof shall be effective only in the specific instance
and for the specific purpose given.

 

9.13        No Waiver; Cumulative Remedies.  No failure to exercise and no delay
in exercising on the part of the Noteholder, of any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law or under the Security Agreement.

 

9.14        Severability.   If any term or provision of this Note or the
Security Agreement is invalid, illegal or unenforceable in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other term
or provision of this Note or the Security Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction. Upon such
determination that any term or other provision is invalid, illegal or
unenforceable, the Parties hereto shall negotiate in good faith to modify this
Note so as to effect the original intent of the Parties as closely as possible
in a mutually acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the greatest extent
possible.

 

[SIGNATURE PAGE FOLLOWS]

 

 11 

 

 

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER
AND TO THE EXTENT SET FORTH IN THAT CERTAIN SELLER NOTE SUBORDINATION AGREEMENT,
DATED AS OF DECEMBER 1, 2016, BY AND BETWEEN LVMH MOET HENNESSY LOUIS VUITTON
INC., BARCLAYS BANK PLC AND JPMORGAN CHASE BANK, N.A., AND EACH HOLDER OF THIS
NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF SUCH SELLER
NOTE SUBORDINATION AGREEMENT.

 

IN WITNESS WHEREOF, the Borrower has executed this Note as of the date first
written above.

 

G-III LEATHER FASHIONS, INC.         By:  /s/ Wayne S. Miller   Name:  Wayne S.
Miller   Title: Sr. VP, Secretary & Treasurer         G-III APPAREL GROUP, LTD.
        By:  /s/ Wayne S. Miller   Name:  Wayne S. Miller   Title: Chief
Operating Officer