2     “Additional 2011 Notes Debt” means that portion of the 2011 Notes, in anaggregate principal amount not to exceed $35,000,000, that does not constitute Euro NotesRefinancing Debt.     “Additional Notes” means any “Additional Notes” issued under (and as definedin) the indenture governing the 2011 Notes after the First Amendment Effective Date.     “Additional Pari Passu Note Obligations” has the meaning set forth in the NotesIntercreditor Agreement.     “Additional Pari Passu Note Obligations Documentation” means any instruments,agreements or other documents evidencing or governing any Additional Pari Passu NoteObligations or providing for any other right in respect thereof.     “Consent Solicitation” means one or more consent solicitations of holders ofExisting Euro Notes to permit any Euro Notes Refinancing Debt.     “First Amendment” means the First Amendment and Consent to this Agreement andSecond Amendment to the US Pledge and Security Agreement, dated as of March 25, 2011.     “License” means any “License”, as defined in the US Security Agreement.     “Kohl PrimeRevenue Program” means the accounts receivable purchase arrangementsevidenced by (i) the accounts receivable purchase agreement between the Company and Bank ofAmerica, N.A., dated as of December 20, 2010, and (ii) the related supplier agreementbetween the Company and PrimeRevenue, Inc., dated as of December 20, 2010, in each case inrespect of account payable obligations of Kohl’s Department Stores, Inc. and its Affiliates.     “Notes Documentation” means the 2011 Notes Documentation, the Additional PariPassu Note Obligations Documentation and any other instruments, agreements or otherdocuments evidencing or governing any other Trademark Secured Debt or providing for anyother right in respect thereof.     “Notes Intercreditor Agreement” means the Intercreditor Agreement, to beexecuted and delivered by the US Collateral Agent, the trustee in respect of the 2011 Notes,in its capacity as trustee under the 2011 Notes Documentation and collateral agent for theholders of the 2011 Notes, any Additional Notes and the holders of Additional Pari PassuNote Obligations and other Trademark Secured Debt, as applicable, and as acknowledged andagreed to by the Loan Parties, substantially in the form of Exhibit A to the FirstAmendment.     “Notes Priority Collateral” means the Trademarks of the US Loan Parties and theMexx Trademark (and, in each case, any License granting a right to use such Trademark).     “Tender Offer” means one or more cash tender offers for the Existing Euro Noteswith proceeds of the 2011 Notes, any Additional Notes or any Additional Pari Passu NoteObligations.          (b) The definition of “Consolidated EBITDA” in Section 1.01 of the Credit Agreement is herebyamended by (i) deleting the word “and” at the end of clause (vi) thereof, (ii) inserting the word“and” at the end of clause (vii) thereof and inserting the following new clause (viii) immediatelyfollowing clause (vii) thereof:

 

3     “(viii) any expenses or charges incurred in connection with (a) the offering of the2011 Notes or any Additional Notes or any Additional Pari Passu Note Obligations that, ineach case, constitute Euro Notes Refinancing Debt, (b) any Tender Offer, (c) any ConsentSolicitation, and (d) any legal expenses or charges incurred in connection with the FirstAmendment in an aggregate amount with respect to clauses (a) through (d) above not to exceed$20,000,000 during the term of this Agreement”     3. Amendment to Section 2.11 (Prepayment of Loans). Section 2.11(f) of the Credit Agreement is hereby amended by inserting the words “(in eachcase, other than (so long as no Default or Event of Default shall have occurred and be continuingor would result from the issuance thereof) any Trademark Secured Debt that constitutes Euro NotesRefinancing Debt)” immediately following the words “Section 6.02(p)”.     4. Amendment to Section 3.16 (Security Interest in Collateral). Section 3.16 of the Credit Agreement is hereby amended by (i) deleting the “(a)” set forththerein and (ii) inserting the words “or (solely in the case of any Notes Priority Collateral) theterms of the Notes Intercreditor Agreement” at the end of the first sentence thereof.     5. Amendment to Section 6.01 (Indebtedness). (a) Section 6.01 of the Credit Agreement is hereby amended by deleting clause (l) thereofin its entirety and substituting in lieu thereof the following new clause (l):     “(l) (x) Indebtedness in respect of the Existing Euro Notes and (y) any Indebtedness(including, without limitation, subject to the terms hereof, any 2011 Notes, any AdditionalNotes and any Additional Pari Passu Note Obligations) which represents an extension,refinancing, replacement or renewal thereof from time to time (whether in whole or in part)and including one or more successive extensions, refinancing, replacements or renewalsthereof from time to time (whether in whole or in part) (including any Guarantees thereof tothe extent permitted pursuant to the following proviso) (the “Euro Notes RefinancingDebt”); provided that, (i) the principal amount (or accreted value, ifapplicable) of the Euro Notes Refinancing Debt does not exceed the principal amount (oraccreted value, if applicable) of the Existing Euro Notes so extended, refinanced, replacedor renewed (plus any unpaid, accrued interest, fees or premiums in connection with theExisting Euro Notes and any reasonable costs associated with such extension, refinancing,replacement or renewal (including, for the avoidance of doubt, tender premiums and anyConsent Solicitation payments)), (ii) such Euro Notes Refinancing Debt shall be either (A)unsecured or (B) secured by Liens on assets that do not constitute Collateral (other thanTrademarks (and any License granting a right to use any such Trademark) (to the extentpermitted pursuant to Section 6.02(p)) and/or Permitted Second Priority Liens (to the extentpermitted pursuant to Section 6.02(s))) and are otherwise permitted pursuant to Section6.02, and (iii) such Euro Notes Refinancing Debt does not have a shorter average weightedmaturity than the Existing Euro Notes;”     (b) Section 6.01 of the Credit Agreement is hereby further amended by (i) deleting the“and” at the end of clause (u) thereof, (ii) inserting “; and” at the end of clause (v)thereof and (iii) inserting the following new clause (w) immediately following clause (v)thereof:     “(w) Indebtedness constituting Additional 2011 Notes Debt.”     6. Amendments to Section 6.02 (Liens).

 

4          (a) Section 6.02(p) is hereby amended by deleting the first sentence thereof in its entiretyand substituting in lieu thereof the following new sentence:          “Liens on Trademarks of the US Loan Parties and Liens on the Mexx Trademark (and, ineach case, Liens on any License granting a right to use such Trademark), in each casesecuring Indebtedness of the Company or any other US Loan Party permitted pursuant toSection 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 itsSubsidiaries in connection with such Indebtedness (other than (so long as no Default orEvent of Default shall have occurred and be continuing or would result from the issuancethereof) any Trademark Secured Debt that constitutes Euro Notes Refinancing Debt) shall beused to prepay the Loans in accordance with Section 2.11(f), (y) such Liens may be firstpriority Liens so long as such Trademarks and/or the Mexx Trademark, as applicable, and anysuch License, shall be subject to a second priority perfected security interest in favor ofthe applicable Collateral Agent (for the benefit of the Agents, the applicable Lenders andthe applicable Issuing Banks) and such Liens shall be subject to an intercreditor agreementreasonably satisfactory to the Administrative Agent and (z) the Administrative Agent and theapplicable Collateral Agents shall have been granted a non-exclusive royalty free licensewith respect to such Trademarks and/or the Mexx Trademark, as applicable, to the extent anysuch Trademarks and/or the Mexx Trademark, as applicable, are used in connection with anyCollateral;”          (b) Section 6.02(s) of the Credit Agreement is hereby amended by deleting the first sentencethereof in its entirety and substituting in lieu thereof the following new sentence:     “Liens on the Collateral (the “Permitted Second Priority Liens”) securing theTrademark Secured Debt; provided that (w) the Net Proceeds received by the Companyand its Subsidiaries in connection with such Indebtedness (other than (so long as no Defaultor Event of Default shall have occurred and be continuing or would result from the issuancethereof) any Trademark Secured Debt that constitutes Euro Notes Refinancing Debt) shall beused to prepay the Loans in accordance with Section 2.11(f), (x) such Trademark Secured Debtshall not have a final maturity date that is earlier than the Maturity Date, (y) such Liens(other than the Liens upon Trademarks and Liens on any License granting a right to use suchTrademarks referred to in clause (p) above) shall be junior to the liens granted pursuant tothe Loan Documents to the applicable Collateral Agent, for the benefit of the Agents, theapplicable Lenders and the applicable Issuing Banks, and shall be subject to anintercreditor agreement reasonably satisfactory to the Required Lenders and (z) theapplicable Collateral Agent(s) shall have been granted a second priority perfected Lien, forthe benefit of the Agents, the applicable Lenders and the applicable Issuing Banks, in anycollateral securing the Trademark Secured Debt that does not otherwise constituteCollateral.”     7. Amendments to Section 6.05 (Asset Sales).          (a) Section 6.05(c) of the Credit Agreement is hereby amended by deleting clause (c) thereofin its entirety and substituting in lieu thereof the following new clause (c):     “(c) sales, transfers and dispositions of accounts receivable (i) in connection withthe compromise, settlement or collection thereof or (ii) pursuant to the Kohl PrimeRevenueProgram and other similar arrangements reasonably acceptable to the Administrative Agent.”          (b) Section 6.05 of the Credit Agreement is hereby amended by (i) deleting the word “and” atthe end of clause (p) thereof, (ii) inserting the word “and” at the end of clause (q) thereof and(iii) inserting the following new clause (r) immediately following clause (q) thereof:

 

5     “(r) sales, transfers, licenses and other dispositions of assets that constitute NotesPriority Collateral as permitted by and in accordance with any Notes Documentation governingIndebtedness intended or purported to be secured by a first priority lien on such NotesPriority Collateral, so long as the applicable purchaser has acknowledged and consented tothe non-exclusive, royalty-free license granted to the US Collateral Agent with respect toany Trademarks and/or the Mexx Trademark, as applicable, constituting Notes PriorityCollateral to the extent any such Trademarks and/or the Mexx Trademark, as applicable, areused in connection with any Collateral;”     8. Amendment to Section 6.09 (Restricted Payments; Certain Payments of Indebtedness). Section 6.09 of the Credit Agreement is hereby amended by deleting subclause (b)(I) thereofin its entirety and substituting in lieu thereof the following new subclause (b)(I):     “(I) prepayments or repurchases of the Existing Euro Notes, any Euro Notes RefinancingDebt and/or the Existing Convertible Notes with the Net Proceeds of (i) any capitalcontributions 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 assetsale permitted pursuant to Section 6.05(g), (v) any asset sale permitted by Section 6.05(r),and (vi) any incurrence of Indebtedness described in Section 6.02(p) (including withoutlimitation pursuant to any Tender Offer to be consummated with the Net Proceeds of suchIndebtedness); provided that (x) both immediately before and immediately aftergiving proforma effect thereto, (1) no Default or Event of Default shallhave occurred and be continuing and (2) except in the case of any prepayment or repurchaseof Existing Euro Notes with the Net Proceeds of any Indebtedness incurred pursuant to anyNotes Documentation that constitutes Euro Notes Refinancing Debt, Aggregate Availabilityshall not have been less than the greater of (A) $109,375,000 and (B) an amount equal to31.25% of the Commitments then in effect at any time during the three-month periodimmediately preceding such prepayment or repurchase, and (y) any Net Proceeds received bythe Company and its Subsidiaries (other than in respect of asset sales described in clause(v) above) in connection with (1) such Subordinated Indebtedness, issuance of common stockor capital contribution are first applied to prepay the Loans in full in accordance withSection 2.11(a), (2) asset sales described in clause (iv) above are first applied to prepaythe Loans in full in accordance with Section 2.11(c) and (3) such Indebtedness described inclause (vi) above (other than Trademark Secured Debt that constitutes Euro Notes RefinancingDebt) are first applied to prepay the Loans in full in accordance with Section 2.11(f);”     9. Amendment to Section 6.11 (Restrictive Agreements). Section 6.11 of the Credit Agreement is hereby amended by (i) deleting the word “and” atthe end of clause (v) thereof, (ii) inserting the word “and” at the end of clause (vi) thereof andinserting the following new clause (vii) immediately following clause (vi) thereof:     “(vii) the foregoing shall not apply to the restrictions and conditions imposed by theNotes Documentation (or any extension, amendment, modification, refinancing, replacement orrenewal thereof that does not expand the scope of any such restriction or condition) so longas such provisions do not prohibit, restrict or impose any condition upon (x) the ability ofany Loan Party to create, incur or permit to exist Liens upon its property or assets infavor of any Agent, for the benefit of the applicable Lenders and Issuing Banks under theLoan Documents, (y) the ability of any Subsidiary to (A) make dividends or distributions tothe Company or any Guarantor or to otherwise transfer property to or invest in the Companyor any Guarantor or (B) Guarantee the Obligations or Secured Obligations hereunder.”

 

6     10. Amendment to Article VII (Events of Default). Article VII of the Credit Agreement is hereby amended by (i) deleting the word “or” at theend of clause (o) thereof, (ii) inserting the word “or” at the end of clause (p) thereof and (iii)inserting the following new clause (q) immediately following clause (p) thereof:     “(q) (i) the Notes Intercreditor Agreement shall cease to be in full force and effect(other than in accordance with its terms) or (ii) the Liens on the Collateral (other thanthe Notes Priority Collateral intended or purporting to secure any Trademark Secured Debt ona first priority basis) securing any obligations under the Notes Documentation shall cease,for any reason, to be validly subordinated to the Liens on the Collateral (other than suchNotes Priority Collateral) securing the Secured Obligations, or any Loan Party or anyAffiliate of any Loan Party shall assert any of the foregoing;”     11. Amendment to Section 8 (The Administrative Agent, the European Administrative Agent,the Canadian Administrative Agent and the Collateral Agents). Section 8 of the Credit Agreement is hereby amended by deleting clause (u) thereof in itsentirety and substituting in lieu thereof the following new clause (u):     “Each of the Lenders hereby acknowledges that is has received and reviewed theIntercreditor Agreement and the Notes Intercreditor Agreement and agrees to be bound by theterms thereof. Each Lender (and each Person that becomes a Lender hereunder pursuant toSection 9.04) hereby (i) acknowledges that JPMorgan Chase Bank, N.A. is acting under theIntercreditor Agreement and the Notes Intercreditor Agreement (as applicable) in multiplecapacities including, without limitation, as the Administrative Agent, the US CollateralAgent, the Initial ABL Agent (as defined in the Notes Intercreditor Agreement) and/or theCredit Agreement Representative (as defined in the Intercreditor Agreement), as applicable,and (ii) waives any conflict of interest, now contemplated or arising hereafter, inconnection therewith and agrees not to assert against JPMorgan Chase Bank, N.A. or any ofits Affiliates any claims, causes of action, damages or liabilities of whatever kind ornature relating thereto. Each Lender (and each Person that becomes a Lender hereunderpursuant to Section 9.04) hereby authorizes and directs JPMorgan Chase Bank, N.A. to enterinto the Intercreditor Agreement on behalf of such Lender and authorizes and directsJPMorgan Chase Bank, N.A. to enter into the Notes Intercreditor Agreement on behalf of suchLender. Each Lender (and each Person that becomes a Lender hereunder pursuant to Section9.04) 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 IntercreditorAgreement and/or the Notes Intercreditor Agreement, as applicable. Each Lender herebyagrees that, notwithstanding anything herein to the contrary, (x) the Lien and securityinterest granted to the US Collateral Agent on the US Collateral pursuant to this Agreementor any other Loan Document and the exercise of any right or remedy by the US CollateralAgent hereunder or under any other Loan Document are subject to the provisions of theIntercreditor Agreement and (y) the Liens and security interests granted to the USCollateral Agent pursuant to this Agreement or any other Loan Document, and the exercise ofany right or remedy by the US Collateral Agent hereunder or under any other Loan Document,are subject to the provisions of the Notes Intercreditor Agreement. In the event of anyconflict between the terms of the Intercreditor Agreement, this Agreement and any other LoanDocument (other than the Notes Intercreditor Agreement), the terms of the IntercreditorAgreement shall govern and control with respect to any right or remedy. In the event of anyconflict between the terms of the Notes Intercreditor Agreement, this Agreement and anyother Loan Document, the terms of the Notes Intercreditor Agreement shall govern and controlwith respect to any right or remedy.

 

7     In the event that the Borrower or any Subsidiary incurs any additional TrademarkSecured Debt, any Collateral Agent and/or other Agent may (and is hereby authorized anddirected to) enter into one or more intercreditor agreements, in form and substancesubstantially similar to the Notes Intercreditor Agreement or otherwise reasonablyacceptable to such Collateral Agent or other Agent (as applicable), governing any of therelative lien priorities in respect of the Collateral, including in the form of an amendmentto the Notes Intercreditor Agreement, and the terms of the immediate preceding paragraphshall apply mutatismutandis with respect to any such Collateral Agent andany such intercreditor agreement.”     12. Amendment to Article IX (Miscellaneous). Article IX of the Credit Agreement is hereby amended by inserting the following new Section9.31 at the end thereof:     “Section 9.31 Notes Intercreditor Agreement. (a) The Administrative Agent andthe US Collateral Agent are each authorized and directed to enter into the NotesIntercreditor Agreement on behalf of the Lenders and each of the Lenders hereby approves andagrees to be bound by the terms of the Notes Intercreditor Agreement.     (b) Notwithstanding anything herein to the contrary, the Liens and security interestsgranted to the Agents pursuant to this Agreement or any other Loan Document and the exerciseof any right or remedy by any of the Agents hereunder or under any other Loan Document aresubject to the provisions of the Notes Intercreditor Agreement. In the event of anyconflict between the terms of the Notes Intercreditor Agreement, this Agreement and anyother Loan Document, the terms of the Notes Intercreditor Agreement shall govern and controlwith respect to any right or remedy. Without limiting the generality of the foregoing, andnotwithstanding anything herein to the contrary, all rights and remedies of the Agents (andthe Lenders) shall be subject to the terms of the Notes Intercreditor Agreement, and untilthe Discharge of Note Obligations (as defined in the Notes Intercreditor Agreement), (i) noLoan Party shall be required hereunder or under any other Loan Document to take any actionwith respect to the Notes Priority Collateral intended or purporting to secure TrademarkSecured Debt on a first priority basis that is inconsistent with such Loan Party’sobligations under the applicable Notes Documentation and (ii) any obligation of any LoanParty hereunder or under any other Loan Document with respect to the delivery or control ofany of the Notes Priority Collateral, the novation of any Lien on any certificate of title,bill of lading or other document, the giving of any notice to any bailee or other Person,the provision of voting rights or the obtaining of any consent of any Person, in each case,with respect to the Notes Priority Collateral, shall be deemed to be satisfied if the LoanParty complies with the requirements of the similar provision of the applicable NotesDocumentation. Until the Discharge of Note Obligations, the Agents may not require any LoanParty to take any action with respect to the creation, perfection or priority of itssecurity interest in any of the Notes Priority Collateral intended or purporting to secureany Trademark Secured Debt on a first priority basis, whether pursuant to the express termshereof or of any other Loan Document or pursuant to the further assurances provisions hereofor any other Loan Document, unless the applicable agent under the applicable NotesDocumentation shall have required such Loan Party to take similar action, and delivery ofany such Notes Priority Collateral to the applicable agent pursuant to the applicable NotesDocumentation and the Notes Intercreditor Agreement or other applicable intercreditoragreement shall satisfy any delivery requirement hereunder or under any other Loan Document.     (c) In the event that the Borrower or any Subsidiary incurs any additional TrademarkSecured Debt, any Collateral Agent and/or other Agent may (and is hereby authorized anddirected to) enter into one or more intercreditor agreements in form and substancesubstantially similar to the Notes Intercreditor Agreement or otherwise reasonablyacceptable to such

 

8Collateral Agent or other Agent (as applicable), governing any of the relative lienpriorities in respect of the Collateral, including in the form of an amendment to the NotesIntercreditor Agreement, and the terms of the immediate preceding paragraph shall applymutatismutandis with respect to any such Collateral Agent or other Agent(as applicable), any such Collateral and any such intercreditor agreement.”     13. Consent. The Required Lenders hereby consent to the terms of the intercreditor agreement attachedhereto as Exhibit A and authorize the Administrative Agent and/or the US Collateral Agent toexecute an intercreditor agreement (the “Notes Intercreditor Agreement”), substantially onthe terms thereof, and to exercise such powers as are delegated to such Agent by the terms thereof,together with such actions and powers as are reasonably incidental thereto.     14. Amendment to Section 5.6 of the Security Agreement (Proceeds to be Turned Over To USCollateral Agent). Section 5.6 of the Security Agreement is hereby amended by inserting the words “and the NotesIntercreditor Agreement” immediately following the words “Intercreditor Agreement” at the end ofthe last sentence thereof.     15. Amendment to Section 7.3 of the Security Agreement (Application of Proceeds;Deficiency). Section 7.3 of the Security Agreement is hereby amended by inserting the words “and the NotesIntercreditor Agreement” immediately following the words “Intercreditor Agreement” in each placethey appear therein.     16. Amendments to the Security Agreement.          (a) The Security Agreement is hereby amended by inserting the following new language at thetop of the first page thereof:     “Notwithstanding anything herein to the contrary, the liens and security interestsgranted to the US Collateral Agent pursuant to this Agreement and the exercise of any rightor remedy by the US Collateral Agent hereunder, are subject to the provisions of theIntercreditor Agreement dated as of the First Amendment Effective Date (as amended,restated, supplemented or otherwise modified from time to time, the “Notes IntercreditorAgreement”), among JPMorgan Chase Bank, N.A., as Initial ABL Agent, US Bank NationalAssociation, as Trustee and as Notes Agent and the Grantors (as defined in the NotesIntercreditor Agreement) from time to time party thereto. In the event of any conflictbetween the terms of the Notes Intercreditor Agreement and the terms of this Agreement, theterms of the Notes Intercreditor Agreement shall govern and control.”          (b) The Security Agreement is hereby amended by inserting the following new Article XI at theend thereof:“**ARTICLE XI**