EX-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

 



AMENDED AND RESTATED CREDIT AGREEMENT


dated as of


January 12, 2009,


among


LIZ CLAIBORNE, INC.,


MEXX EUROPE B.V.,


and


LIZ CLAIBORNE CANADA INC.,

as Borrowers,


The SUBSIDIARY GUARANTORS Party Hereto,


The LENDERS Party Hereto


JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and U.S. 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.

and

SUNTRUST BANK,

as Syndication Agents,


and


WACHOVIA BANK, NATIONAL ASSOCIATION,

as Documentation Agent


 




J.P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES LLC

as Joint Lead Arrangers


J.P. MORGAN SECURITIES INC.,

BANC OF AMERICA SECURITIES LLC and WACHOVIA CAPITAL MARKETS, LLC,

as Joint Bookrunners


 










 



 


TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I Definitions
	 	 	1	 
	SECTION 1.01 Defined Terms
	 	 	1	 
	SECTION 1.02 Classification of Loans and Borrowings
	 	 	61	 
	SECTION 1.03 Terms Generally
	 	 	61	 
	SECTION 1.04 Accounting Terms; GAAP
	 	 	63	 
	SECTION 1.05 Currency Translations
	 	 	63	 
	 
	 	 	 	 
	ARTICLE II The Credits
	 	 	64	 
	SECTION 2.01 Commitments
	 	 	64	 
	SECTION 2.02 Loans and Borrowings
	 	 	65	 
	SECTION 2.03 Requests for Borrowing of Revolving Loans
	 	 	66	 
	SECTION 2.04 Protective Advances
	 	 	67	 
	SECTION 2.05 Swingline Loans
	 	 	69	 
	SECTION 2.06 Letters of Credit
	 	 	73	 
	SECTION 2.07 Funding of Borrowings
	 	 	79	 
	SECTION 2.08 Interest Elections
	 	 	80	 
	SECTION 2.09 Termination and Reduction of Commitments
	 	 	82	 
	SECTION 2.10 Repayment of Loans; Evidence of Debt
	 	 	83	 
	SECTION 2.11 Prepayment of Loans
	 	 	85	 
	SECTION 2.12 Fees
	 	 	87	 
	SECTION 2.13 Interest
	 	 	88	 
	SECTION 2.14 Alternate Rate of Interest
	 	 	89	 
	SECTION 2.15 Increased Costs
	 	 	90	 
	SECTION 2.16 Break Funding Payments
	 	 	92	 
	SECTION 2.17 Taxes
	 	 	92	 
	SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs
	 	 	96	 
	SECTION 2.19 Mitigation Obligations; Replacement of Lenders
	 	 	100	 
	SECTION 2.20 Returned Payments
	 	 	100	 
	SECTION 2.21 Bankers’ Acceptances
	 	 	101	 
	SECTION 2.22 Circumstances Making Bankers’ Acceptances Unavailable
	 	 	104	 
	SECTION 2.23 Defaulting Lenders
	 	 	105	 
	 
	 	 	 	 
	ARTICLE III Representations and Warranties
	 	 	107	 
	SECTION 3.01 Organization; Powers
	 	 	107	 
	SECTION 3.02 Authorization; Enforceability
	 	 	108	 
	SECTION 3.03 Governmental Approvals; No Conflicts
	 	 	108	 
	SECTION 3.04 Financial Condition; No Material Adverse Change
	 	 	109	 
	SECTION 3.05 Properties
	 	 	109	 
	SECTION 3.06 Litigation and Environmental Matters
	 	 	109	 
	SECTION 3.07 Compliance with Laws and Agreements
	 	 	110	 
	SECTION 3.08 Investment Company Status
	 	 	110	 
	SECTION 3.09 Taxes
	 	 	110	 




- i -








 



 


	 	 	 	 	 
	 	 	Page
	SECTION 3.10 ERISA; Benefit Plans
	 	 	110	 
	SECTION 3.11 Disclosure
	 	 	112	 
	SECTION 3.12 No Default
	 	 	112	 
	SECTION 3.13 Solvency
	 	 	112	 
	SECTION 3.14 Insurance
	 	 	113	 
	SECTION 3.15 Capitalization and Subsidiaries
	 	 	113	 
	SECTION 3.16 Security Interest in Collateral
	 	 	113	 
	SECTION 3.17 Employment Matters
	 	 	114	 
	SECTION 3.18 Common Enterprise
	 	 	114	 
	SECTION 3.19 Centre of Main Interests
	 	 	114	 
	SECTION 3.20 Regulation H
	 	 	114	 
	SECTION 3.21 Certain Documents
	 	 	115	 
	 
	 	 	 	 
	ARTICLE IV Conditions
	 	 	115	 
	SECTION 4.01 Effective Date
	 	 	115	 
	SECTION 4.02 Each Credit Event
	 	 	119	 
	 
	 	 	 	 
	ARTICLE V Affirmative Covenants
	 	 	120	 
	SECTION 5.01 Financial Statements; Borrowing Base and Other Information
	 	 	120	 
	SECTION 5.02 Notices of Material Events
	 	 	124	 
	SECTION 5.03 Existence; Conduct of Business
	 	 	125	 
	SECTION 5.04 Payment of Obligations
	 	 	126	 
	SECTION 5.05 Maintenance of Properties
	 	 	126	 
	SECTION 5.06 Books and Records; Inspection Rights
	 	 	126	 
	SECTION 5.07 Compliance with Laws
	 	 	126	 
	SECTION 5.08 Use of Proceeds
	 	 	128	 
	SECTION 5.09 Insurance
	 	 	128	 
	SECTION 5.10 Casualty and Condemnation
	 	 	129	 
	SECTION 5.11 Appraisals
	 	 	129	 
	SECTION 5.12 Field Examinations
	 	 	129	 
	SECTION 5.13 [Reserved]
	 	 	129	 
	SECTION 5.14 Additional Collateral; Further Assurances
	 	 	130	 
	SECTION 5.15 Financial Assistance
	 	 	131	 
	SECTION 5.16 Collateral Access Agreements and Deposit Account Control Agreements
	 	 	131	 
	SECTION 5.17 Transfer of Accounts of European Loan Parties
	 	 	132	 
	SECTION 5.18 European Cash Management
	 	 	132	 
	SECTION 5.19 Post-Closing Items
	 	 	132	 
	 
	 	 	 	 
	ARTICLE VI Negative Covenants
	 	 	132	 
	SECTION 6.01 Indebtedness
	 	 	132	 
	SECTION 6.02 Liens
	 	 	135	 
	SECTION 6.03 Fundamental Changes
	 	 	137	 
	SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	137	 
	SECTION 6.05 Asset Sales
	 	 	140	 
	SECTION 6.06 [Reserved]
	 	 	141	 
	SECTION 6.07 [Reserved]
	 	 	141	 




- ii -








 



 


	 	 	 	 	 
	 	 	Page
	SECTION 6.08 Swap Agreements
	 	 	141	 
	SECTION 6.09 Restricted Payments; Certain Payments of Indebtedness
	 	 	141	 
	SECTION 6.10 Transactions with Affiliates
	 	 	143	 
	SECTION 6.11 Restrictive Agreements
	 	 	143	 
	SECTION 6.12 Amendment of Material Documents
	 	 	144	 
	SECTION 6.13 Capital Expenditures
	 	 	144	 
	SECTION 6.14 Sale and Leaseback Transaction
	 	 	144	 
	SECTION 6.15 Changes in Fiscal Periods
	 	 	144	 
	SECTION 6.16 Fixed Charge Coverage Ratio
	 	 	144	 
	 
	 	 	 	 
	ARTICLE VII Events of Default
	 	 	145	 
	 
	 	 	 	 
	ARTICLE VIII The Administrative Agent, the European Administrative Agent, the Canadian Administrative Agent and the
Collateral Agents
	 	 	149	 
	 
	 	 	 	 
	ARTICLE IX Miscellaneous
	 	 	156	 
	SECTION 9.01 Notices
	 	 	156	 
	SECTION 9.02 Waivers; Amendments
	 	 	159	 
	SECTION 9.03 Expenses; Indemnity; Damage Waiver
	 	 	161	 
	SECTION 9.04 Successors and Assigns
	 	 	163	 
	SECTION 9.05 Survival
	 	 	167	 
	SECTION 9.06 Counterparts; Integration; Effectiveness
	 	 	167	 
	SECTION 9.07 Severability
	 	 	167	 
	SECTION 9.08 Right of Setoff
	 	 	167	 
	SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process
	 	 	168	 
	SECTION 9.10 WAIVER OF JURY TRIAL
	 	 	168	 
	SECTION 9.11 Headings
	 	 	169	 
	SECTION 9.12 Confidentiality
	 	 	169	 
	SECTION 9.13 Several Obligations; Nonreliance; Violation of Law
	 	 	170	 
	SECTION 9.14 USA PATRIOT Act
	 	 	170	 
	SECTION 9.15 Disclosure
	 	 	170	 
	SECTION 9.16 Appointment for Perfection
	 	 	170	 
	SECTION 9.17 Interest Rate Limitation
	 	 	171	 
	SECTION 9.18 Waiver of Immunity
	 	 	171	 
	SECTION 9.19 Currency of Payment
	 	 	172	 
	SECTION 9.20 Conflicts
	 	 	172	 
	SECTION 9.21 Parallel Debt
	 	 	172	 
	SECTION 9.22 Canadian Anti-Money Laundering Legislation
	 	 	174	 
	SECTION 9.23 Subordination
	 	 	174	 
	SECTION 9.24 Process Agent
	 	 	175	 
	SECTION 9.25 No Novation
	 	 	175	 
	SECTION 9.26 French Loan Guarantor
	 	 	175	 
	SECTION 9.27 Effectiveness of Article VIII
	 	 	176	 
	 
	 	 	 	 
	ARTICLE X Loan Guaranty
	 	 	176	 
	SECTION 10.01 Guaranty
	 	 	176	 
	SECTION 10.02 Guaranty of Payment
	 	 	180	 




- iii -








 



 


	 	 	 	 	 
	 	 	Page
	SECTION 10.03 No Discharge or Diminishment of Loan Guaranty
	 	 	181	 
	SECTION 10.04 Defenses Waived
	 	 	182	 
	SECTION 10.05 Rights of Subrogation
	 	 	182	 
	SECTION 10.06 Reinstatement; Stay of Acceleration
	 	 	182	 
	SECTION 10.07 Information
	 	 	183	 
	SECTION 10.08 [Reserved]
	 	 	183	 
	SECTION 10.09 Maximum Liability
	 	 	183	 
	SECTION 10.10 Limitations on Enforcement in respect of German Loan Parties
	 	 	183	 
	SECTION 10.11 Contribution
	 	 	186	 
	SECTION 10.12 Liability Cumulative
	 	 	186	 
	SECTION 10.13 Place of Performance
	 	 	186	 
	 
	 	 	 	 
	ARTICLE XI The Borrower Representative
	 	 	187	 
	SECTION 11.01 Appointment; Nature of Relationship
	 	 	187	 
	SECTION 11.02 Powers
	 	 	187	 
	SECTION 11.03 Employment of Agents
	 	 	188	 
	SECTION 11.04 Notices
	 	 	188	 
	SECTION 11.05 Successor Borrower Representative
	 	 	188	 
	SECTION 11.06 Execution of Loan Documents; Borrowing Base Certificate
	 	 	188	 
	SECTION 11.07 Reporting
	 	 	188	 






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 2.02 – Allocation of Loans

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




EXHIBITS:




Exhibit A – Form of Assignment and Assumption

Exhibit B-1 – Form of Aggregate Borrowing Base Certificate


- iv -








 



 


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 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



- v -








 



 


     This AMENDED AND RESTATED CREDIT AGREEMENT dated as January 12, 2009 (as it may be amended or
modified from time to time, this “Agreement”), among LIZ CLAIBORNE, INC., MEXX EUROPE B.V.,
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. and SUNTRUST BANK, as Syndication Agents, and WACHOVIA BANK, NATIONAL ASSOCIATION, as
Documentation Agent amends and restates in full the Five Year Credit Agreement, dated October 13,
2004 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the
“Existing Credit Agreement”), among Liz Claiborne, Inc., the lenders party thereto and
JPMorgan Chase Bank, N.A. as administrative agent.



     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” means a fee payable in Canadian Dollars by the Canadian Borrower with
respect to the acceptance of a Bankers’ Acceptance by a Facility B Lender under this Agreement, as
set forth 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 indorsement 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.



     “Account” means, individually and collectively, any “Account” referred to in any
Security Agreement.









 



 


 2 




     “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 or German Loan Party.



     “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 Agents and the Documentation
Agent.



     “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.



     “Aggregate Borrowing Base” means the aggregate amount of the US Borrowing Base, the
Canadian 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 and (b) 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.









 



3


     “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.



     “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, 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.



     “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; provided that until the completion of two full fiscal
quarters after the Effective Date, the Applicable Commitment Fee Rate shall be the applicable rate
per annum set forth below in Category 3:



	 	 	 	 	 	 
	 	 	 	Applicable
	Commitment Utilization	 	 	Commitment
	Percentage	 	 	Fee Rate
	Category 1 > 67%
	 	 	 	0.50	%
	Category 2
 3 33% but £ 67%
	 	 	 	0.75	%
	Category 3
< 33%
	 	 	 	1.00	%






     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 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) 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









 




4

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 two full
fiscal quarters after the Effective Date, the Applicable Spread shall be the applicable rate per
annum set forth below in Category 3:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Canadian	 	 	 	 	 	Overnight
	Average Aggregate	 	ABR	 	Eurocurrency	 	Prime	 	Acceptance	 	LIBO
	Availability	 	Spread	 	Spread	 	Spread	 	Fee	 	Spread
	Category 1
> $450,000,000
	 	 	4.50	%	 	 	4.50	%	 	 	4.50	%	 	 	4.50	%	 	 	4.50	%
	Category 2
£ $450,000,000 but
>$300,000,000
	 	 	4.75	%	 	 	4.75	%	 	 	4.75	%	 	 	4.75	%	 	 	4.75	%
	Category 3
£ $300,000,000 but
>$150,000,000
	 	 	5.00	%	 	 	5.00	%	 	 	5.00	%	 	 	5.00	%	 	 	5.00	%
	Category 4
£ $150,000,000
	 	 	5.25	%	 	 	5.25	%	 	 	5.25	%	 	 	5.25	%	 	 	5.25	%






     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









 



5

the first month following delivery of such Aggregate Borrowing Base Certificate;
provided that the Average Aggregate Availability shall be deemed to be in Category 4 (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(b).



     “Approved Pension Scheme” means any voluntary pension scheme entered into on or about
July 1, 2009 by Mexx Europe International B.V., Mexx Europe B.V., Mexx Europroduction B.V. and/or
Mexx Nederland B.V. for its employees as a replacement or continuation of the voluntary pension
scheme operated or maintained by it at the date of this Agreement.



     “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.



     “Auditor’s Determination” has the meaning set forth in Section 10.10(c).



     “Austrian Collateral Document” has the meaning set forth in Article VIII.



     “Availability Period” means the period from and including the Effective Date to but
excluding Maturity Date.



     “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.









 



6


     “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.



     “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 and Wachovia Capital Markets, LLC, in their respective capacities as
joint bookrunners hereunder.



     “Borrower” or “Borrowers” means, individually or collectively, the Company,
the Canadian 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 and the European Borrowing Base.









 



7


     “Borrowing Base Certificate” means, individually and collectively, each of the
Aggregate Borrowing Base Certificate, the US Borrowing Base Certificate, the Canadian 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.



     “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 in which commercial banks in the country where the European Borrower is
organized are authorized or required by law to remain closed, (d) 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 in which commercial banks in Toronto,
Canada are authorized or required by law to remain closed, (e) when used in connection with any
Loan denominated in Sterling, the term “Business Day” shall also exclude any day in which
commercial banks in London, England are authorized or required by law to remain closed and (f) when
used in connection with any Loan denominated in Yen, the term “Business Day” shall also exclude any
day in which commercial banks in Tokyo, Japan 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.









 



8


     “Canadian Borrowing Base” means, at any time, with respect to the Canadian Loan
Parties, the sum of:




     (a) 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




     (b) 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




     (c) 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




     (d) 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




     (e) 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




     (d) without duplication, Reserves established by the Administrative Agent in its
Permitted Discretion.



     The Administrative Agent may, in its Permitted Discretion, adjust Reserves 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 Canadian Borrower, in substantially the form of
Exhibit B-3.









 



9


     “Canadian Collateral Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, in its
capacity as collateral agent, security trustee and fonde 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.



     “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 Revolving Loan” means a Revolving Loan made to the Canadian Borrower.



     “Canadian Security Agreement” means that certain Canadian Pledge and Security
Agreement dated as of the date hereof, between the Loan Parties party thereto and the Canadian
Collateral Agent for the benefit of the Agents, the Lenders and the Issuing Banks, as the same









 



10



may be amended, restated or otherwise modified from time to time, 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 $50,000,000, as such sublimit may be reduced or terminated
in accordance with Section 2.09.



     “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” means a Swingline Loan made to the Canadian Borrower.



     “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.









 



11


     “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 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.









 



12


     “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).



     “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 November 2008 relating to the Borrowers and the Transactions.



     “Consolidated EBITDA” means, for any period, Consolidated Net Income 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 $60,000,000, 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; provided that for purposes of calculating the Fixed Charge
Coverage Ratio, Consolidated EBITDA for the fiscal months ending February 2,









 



13

2008, March 8, 2008, April 5, 2008, May 3, 2008 June 7, 2008, July 5, 2008, August 2, 2008,
September 6, 2008, October 4, 2008, November 1, 2008 and December 6, 2008 shall be deemed to be
$(8,481,000), $17,885,000, $66,021,000, $1,314,000, $4,719,000, $52,561,000, $(14,832,000),
$64,230,000, $43,351,000, $(3,106,000) and $20,130,000, respectively.




     “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
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.









 



14


     “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.



     “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 9.26(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.
















 





15




     “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 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).



     “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 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
appropriate term and (b) for a Revolving Lender which is not a Schedule I Lender, the arithmetic









 



16

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 Wachovia Bank, National Association, in its capacity as
Documentation Agent.



     “Dollar Equivalent” means, on any date of determination, (a) with respect to any
amount expressed in Euros, Sterling, Canadian Dollars or Yen, 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 Lenders and the 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 Lenders, the Issuing Banks and any
other holder of Secured Obligations), (ii) a Permitted Encumbrance pursuant to clause (a) of
the definition of “Permitted Encumbrance” which does not have priority over the Lien









 



17



in favor of the applicable Collateral Agent (for the benefit of the Agents, the Lenders
and the Issuing Banks) and (iii) Prior Claims that are unregistered and that secure amounts
that are not yet due and payable;




     (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) 90 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 90 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;




     (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 no Accounts
owing by Macy’s, Kohl’s and JCPenney’s 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) 15%, in the case of Kohl’s and JCPenney’s and (y)
25%, in the case of Macy’s of the aggregate amount of Eligible Accounts of such Loan Party;




     (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 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









 



18



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, the
Netherlands, 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, the
Netherlands, 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 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 (i) other than dollars or Canadian Dollars with
respect to the US Loan Parties and the Canadian Loan Parties or (ii) other than dollars,
Euros, Sterling, Danish Kroner or Swedish Kronor with respect to the European Loan Parties;
provided that the aggregate amount of Eligible Accounts of the European Loan Parties
denominated in Danish Kroner and Swedish Kronor at any time shall not exceed 5.0% of all
Eligible Accounts of the European Loan Parties 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;









 



19



     (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 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) or the
Netherlands (with respect to an Account Debtor of the European Borrower);




     (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









 



20



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; or




     (cc) which the Administrative Agent in its Permitted Discretion determines may not be
paid by reason of the Account Debtor’s inability to pay.



     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 three 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;









 



21



     (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, or is subject to any
Lien whatsoever other than any Lien created pursuant to the Loan Documents and any Permitted
Encumbrances contemplated by the processor agreements and for which appropriate Reserves (as
determined by the Administrative Agent in its Permitted Discretion) have been established;




     (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 Lenders and the Issuing Banks);









 



22



     (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 Lenders, the Issuing Banks and any
other holder of 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
Lenders and the Issuing Banks) and (iii) Prior Claims that are unregistered and that secure
amounts that are not yet due and payable;




     (c) which, in the Administrative Agent’s Permitted Discretion, is determined to be slow
moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable 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;




     (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,
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), 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 with a common carrier from vendors and suppliers; 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 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









 



23



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 (x) in the US Borrowing Base shall not exceed
$35,000,000, (y) in the European Borrowing Base shall not exceed $15,000,000 and (z) in the
Canadian Borrowing Base shall not exceed $5,000,000, 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 Lenders and the 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;




     (l) which is the subject of a consignment by any Loan Party as consignor;




     (m) which is distressed Inventory, as determined by the Administrative Agent in its
Permitted Discretion;




     (n) 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 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 (n);









 



24



     (o) 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);




     (p) for which reclamation rights have been asserted by the seller;




     (q) (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 (q) 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




     (r) 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 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;









 



25

provided that the Aggregate Availability represented by the Eligible LC Inventory in
(x) the US Borrowing Base shall not exceed $60,000,000, (y) the Canadian Borrowing Base shall not
exceed $15,000,000 and (z) the European Borrowing Base shall not exceed $25,000,000, 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 Real Property” means, the real property listed on Schedule 1.01(b)
owned by any US Loan Party (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 and under Section 6.02(k)), (iii)
in respect of which an environmental assessment report has been completed and delivered to the
Administrative Agent in form and substance 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, together with evidence that all other actions that the









 



26

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.



     “Eligible Tax Refund” means any tax refund, payable to the Company pursuant to or in
connection with the Federal income tax return for the Company and its Subsidiaries for its fiscal
year 2008 or any amendment thereto (including as a result of the carryback of any losses to any
prior fiscal year or realization of any other tax attributes or assets from any prior fiscal year);
provided that (i) the Company has filed all tax returns required to receive such refund,
(ii) such tax returns direct any payments of any such tax refund to be made to a deposit account of
the Company subject to a Deposit Account Control Agreement and (iii) such tax returns have been
delivered, and are reasonably acceptable, to the Administrative Agent.



     “Eligible Tax Refund Amount” means the amount reasonably expected to be received by
the Company in connection with the Eligible Tax Refund and agreed by the Administrative Agent in
its Permitted Discretion.



     “Eligible Trademark Amount” means $30,000,000.



     “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.



     “English Security Agreement” means any Collateral Document governed by English law.



     “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.









 



27


     “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 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 Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (d) the filing pursuant to Section 412 of the Code or Section 303(d)
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 412(m) 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 Title IV 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 or Title IV 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.









 



28


     “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 Specified European Availability is less than an amount equal to the greater of (a)
20% of the European Sublimit then in effect and (b) $30,000,000.



     “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.



     “European Borrowing Base” means, at any time, with respect to the Netherlands Loan
Parties, the sum of:




     (a) 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




     (b) 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




     (c) 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




     (d) 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,
minus









 



29



     (e) 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




     (d) without duplication, Reserves established by the Administrative Agent in its
Permitted Discretion.



     The Administrative Agent may, in its Permitted Discretion, adjust Reserves 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 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 European Borrower, 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 and each German
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 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 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









 



30

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 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.




     “European Sublimit” means, $150,000,000, as such sublimit may be reduced or terminated
in accordance with Section 2.09.



     “European Swingline Lender” means J.P. Morgan Chase Bank, N.A., 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) or Netherlands withholding tax (with
respect to payments made by the European 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 or the European 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) or (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.



     “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, as licensor and LC LIBRA, LLC, as licensee, as amended, restated,
supplemented or otherwise modified on or prior to the date hereof.









 



31


     “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 Mexx Indebtedness” means the bilateral operating facility of the European
Borrower provided by ING Bank N.V. immediately prior to the Effective Date.



     “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
$300,000,000.



     “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 for the purpose of providing credit
support for the Company. For the avoidance of doubt, unless the context otherwise requires,
references









 



32



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 $20,000,000.



     “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 and the Canadian 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
$300,000,000.



     “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









 



33



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 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.



     “Facility B Swingline Loans” means, collectively, the European Swingline Loans, the
Canadian Swingline Loans and the Facility B US Swingline Loans.









 



34


     “Facility B Swingline Sublimit” means (x) prior to the Trigger Date, $125,000,000 and
(y) on and after the Trigger Date, $30,000,000.



     “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).



     “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 Senior Vice President – Chief Financial Officer, chief
financial officer, principal accounting officer, treasurer or controller or similar officer of a
Borrower.



     “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, plus
scheduled principal payments on Indebtedness made during such period (including Capital Lease
Obligation payments), plus dividends or distributions paid in cash (it being understood
that the amount of such dividends shall be deemed to be zero for the fiscal months ending February
2, 2008, March 8, 2008, April 5, 2008, May 3, 2008, June 7, 2008, July 5, 2008, August 2, 2008,
September 6, 2008, October 4, 2008, November 1, 2008, December 6, 2008 and January 3, 2009),
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;
provided that for purposes of calculating the Fixed Charge Coverage Ratio, the unfinanced
portion of Capital Expenditures of the Company for the fiscal months ending February 2, 2008, March
8, 2008, April 5, 2008, May 3, 2008, June 7, 2008, July 5, 2008, August 2, 2008, September 6, 2008,
October 4, 2008, November 1, 2008 and December 6, 2008 shall be deemed to be $8,219,000,
$2,385,000, $19,619,000, $8,114,000, $7,992,000, $2,442,000, $8,160,000, $6,615,000, $7,490,000,
$2,686,000 and $6,011,000, respectively.



     “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.









 



35


     “Foreign Borrowing Base” means the aggregate amount of the Canadian 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 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 Sublimit” means the sum of the European Sublimit and the Canadian Sublimit.



     “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.



     “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 France 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 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.









 



36


     “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 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 Loan Party” means any Loan Party organized under the laws of Germany.



     “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









 



37



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 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.



     “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









 



38

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 the date hereof, among Liz Claiborne International Limited and the Loan Parties, in form and
substance reasonably acceptable to the Administrative Agent.



     “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









 



39

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 9.26(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 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, trademarks, service
marks, tradenames, copyrights, patents, trade secrets, industrial designs, internet domain names
and other intellectual property, 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.



     “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the
date hereof, 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









 



40



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.



     “Inventory” means, individually and collectively, “Inventory”, as referred to in any
Security Agreement.



     “Issuing Bank” means, individually and collectively, JPMorgan Chase Bank, N.A., Bank
of America, N.A. and Wachovia 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, in which case the term “Issuing Bank” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.



     “ITA” means the Income Tax Act (Canada), as amended.



     “Italian Collateral Document” has the meaning set forth in Article VIII.



     “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.



     “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.




 











 





41




     “LC Sublimit” $200,000,000; provided that the aggregate LC Exposure in respect
of standby Letters of Credit shall not exceed $50,000,000.



     “Lead Arrangers” means, individually or collectively, J.P. Morgan Securities Inc. and
Banc of America Securities LLC, 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 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.



     “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 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,









 



42



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.



     “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, (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, in each case with respect to clauses (i) through (iv) above, to the extent such entity
is a party to any Loan Guaranty, and (v) 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









 



43



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 January 1 of each year and ending August 31 of
such year and (ii) with respect to Wholesale Inventory, the period commencing November 1 of each
year and ending July 31 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 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).



     “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 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 Lenders and the 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.









 



44


     “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 $25,000,000 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.



     “Maturity Date” means the earliest to occur of (i) May 31, 2011 or (ii) any earlier
date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.



     “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.



     “Minimum Aggregate Availability Period” means (including by reference to the Levels
described below), any period (a) commencing when Aggregate Availability is on any date less than
the greater of:



	 	 	 
	Level 1:

	 	(i) $120,000,000 and (ii) an amount equal to 20% of the
Commitments then in effect; and
	 
	 	 
	Level 2:

	 	(i) $150,000,000 and (ii) an amount equal to 25% of the
Commitments then in effect, but more than Level 1;





and (b) ending after Aggregate Availability is greater than the amounts set forth above (with
respect to the applicable Level) for 45 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 above,
Aggregate Availability shall also be deemed to be greater than Level 1 and each Minimum Aggregate
Availability Period Level shall include any lesser Level.




     “Moody’s” means Moody’s Investors Service, Inc.



     “Mortgage” means any mortgage, hypothec, deed of trust or other agreement which
conveys or evidences a Lien in favor of the applicable Collateral Agent, for the benefit of the
Agents, the Lenders and the 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
Lenders and the 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.









 



45


     “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) 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 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).



     “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.



     “Netherlands Security Agreement” means (a) each Netherlands law (undisclosed) pledge
over receivables existing on the Effective Date, (b) each Netherlands law (disclosed) pledge over
receivables arising after the Effective Date, (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
the date hereof, 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.









 



46


     “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.



     “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).



     “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.









 



47


     “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 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.



     “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









 



48



Borrower in connection with such acquisition shall be directly and beneficially owned
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 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 similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do not









 



49



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, 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) or Germany (with respect to investments made by any German 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;




     (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;









 



50



     (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) 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.



     “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, 65% of
the fair market value of the Eligible Real Property on the Effective Date, which amount is equal to
$25,155,000 (such amount to amortize monthly on a straight-line basis to zero over five years
commencing on the first day of the sixth full month following the Effective Date).



     “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.









 



51


     “Prepayment Event” means any termination or voluntary reduction of the Commitments
pursuant to Section 2.09(b) or (c).



     “Prepayment Fee” means a fee payable to the Administrative Agent for the ratable
benefit of the Lenders upon a Prepayment Event, in an amount equal to the aggregate amount of the
Commitments subject to such reduction or termination multiplied by (x) 1.0%, if such Prepayment
Event occurs prior to the first anniversary of the Effective Date and (y) 0% thereafter.



     “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 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.



     “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.









 



52


     “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.



     “Rent Reserve” means 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 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.



     “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.



     “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 Fixed Charge Coverage Ratio” means, for any Test Period ending during any
period set forth below, the Fixed Charge Coverage Ratio set forth opposite such period:



	 	 	 
	 	 	Fixed Charge Coverage
	Period	 	Ratio
	The Effective Date through but not
including January 2, 2010

	 	1.50 to 1.00
	 
	 	 
	January 2, 2010 and thereafter

	 	1.75 to 1.00












 



53


     “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
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 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 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.



     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.









 



54


     “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 Canadian Borrower.



     “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 and/or any German 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).



     “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 Availability” means an amount equal to (a) the lesser of (i) the
European Sublimit and (ii) the European Borrowing Base minus (b) the total Revolving
Exposure relating to the European Borrower.



     “Specified Fixed Charge Coverage Ratio” means, for any Test Period ending during any
period set forth below, the Fixed Charge Coverage Ratio set forth opposite such period:









 



55


	 	 	 
	 	 	Fixed Charge Coverage
	Period	 	Ratio
	The Effective Date through but not
including January 2, 2010

	 	1.35 to 1.00
	 
	 	 
	January 2, 2010 and thereafter

	 	1.60 to 1.00






     “Specified German Guarantor” has the meaning set forth in Section 10.10.



     “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 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, 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)









 



56



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.



     “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 75% 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
(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.



     “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 and the Canadian Swingline Lender, as the context may require.



     “Swingline Loan” means, individually and collectively, each US Swingline Loan, each
European Swingline Loan and each Canadian Swingline Loans, 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).



     “Syndication Agents” means, individually and collectively, Bank of America, N.A. and
SunTrust Bank, in their respective capacities as Syndication Agent.



     “Synthetic Lease Amendment” means the Fourth Amendment to Master Agreement and First
Amendment to Lease, dated January 12, 2009, among the Company, Liz Claiborne Accessories, Inc.
SunTrust Bank, as lessor, the lenders party thereto and SunTrust Equity Funding, LLC, as agent.









 



57


     “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.



     “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.



     “Transactions” means the execution, delivery and performance by the Loan Parties of
this Agreement, the other Loan Documents and the Intercreditor Agreement, 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.



     “Trigger Date” means the date that is five Business Days following the Effective Date.



     “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









 



58



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.



     “United States” and “US” means the United States of America.



     “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.



     “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; 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) 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




     (b) 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 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




     (c) 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




     (d) 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









 



59



     (e) 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




     (f) the PP&E Component, plus




     (g) on or prior to the earlier of (i) the date of receipt of any Eligible Tax Refund
and (ii) April 30, 2009, the Eligible Tax Refund Amount in an aggregate amount not to exceed
$25,000,000, plus




     (h) on or prior to October 31, 2009, the Eligible Trademark Amount, minus




     (i) the Synthetic Lease Reserves, minus




     (j) without duplication, Reserves established by the Administrative Agent in its
Permitted Discretion.


The Administrative Agent may, in its Permitted Discretion, adjust Reserves 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 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.









 



60


     “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 Revolving Loan” means a Revolving Loan made to the Company.



     “US Security Agreement” means that certain US Pledge and Security Agreement, dated as
of the date hereof, between the US Loan Parties party thereto and the US Collateral Agent (for the
benefit of the Agents, the Lenders and the Issuing Banks), and any other pledge or security
agreement entered into, after the date of this Agreement by any other 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” means a Swingline Loan made to the Company.



     “U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section
2.17(g)(iii).



     “Utilized Excess US Availability” means (a) the total Facility B Revolving Exposure
relating to the Canadian Borrower and the European Borrower minus (b) the sum of (i) the Canadian
Borrowing Base and (ii) the European Borrowing Base; provided that if (b) is greater than
(a), the “Utilized Excess US Availability” shall be deemed to be zero.



     “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.



     “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.









 



61


     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 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);









 



62



     (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 surseance 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);




     (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, Hypotheek), 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.









 



63


     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 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.










 



64




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 (x) the Company in dollars, Canadian dollars, Euros, Sterling and Yen,
(y) the Canadian Borrower in dollars and Canadian dollars and (z) to the European Borrower in
dollars, Euros and Sterling, if, in each case after giving effect thereto:




     (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) the total Facility B Revolving Exposure relating to the European Borrower
would not exceed the European Sublimit;




     (viii) the total Facility B Revolving Exposure relating to the Canadian
Borrower would not exceed the Canadian Sublimit; and




     (ix) the total Revolving Exposure relating to the Company denominated in
Canadian dollars, Euros, Sterling and Yen shall not exceed the Dollar Equivalent of
$100,000,000;




subject, in the case of each of clauses (iv), (v) and (vi) 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 (ix), 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









 



65



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.




     (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 and (v) each Borrowing of European
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 or (iv) 3 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.









 



66



     (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.




     (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 shall be made in dollars, Euros or Sterling.




     (g) On the Effective Date, each loan outstanding under the Existing Credit Agreement
shall be automatically and without further action by the parties hereto deemed converted
into a Facility A Revolving Loan or Facilty B Swingline Loan under this Agreement as set
forth on Schedule 2.02 and shall be included in the calculation of “Revolving
Exposure” and “Facility A Revolving Exposure” or “Facility B Revolving Exposure”, as
applicable. All liabilities of the Company and the other Loan Parties with respect to such
Loans shall constitute Obligations.



     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, 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;









 



67

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;




     (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









 



68



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 or Euros on behalf of the Facility
B Lenders (each such Loan, a “European Protective Advance”), or (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”), 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 $15,000,000 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 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 and the Facility B US Protective Advances,
exceed the aggregate amount of the Facility B Commitments, and (D) 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 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 Lenders and the 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









 



69

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 request the Lenders to make a Revolving 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) 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









 



70



addition, no Facility A Swingline Loan shall be made if, after giving effect
thereto:




     (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 (x) prior to the Trigger Date, $100,000,000 and
(y) on and after the Trigger Date, $5,000,000.




     (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









 



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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 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 $20,000,000.




     (iv) 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)(iv), 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)(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 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









 



72



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 unconditionally and irrevocably 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 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 (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









 



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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) or 2.05(a)(iii) shall constitute
Eurocurrency Revolving Loans with an Interest Period of one week. If any such amount
referred to in this clause (c) is not transferred to the applicable Agent by any applicable
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 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










 



74

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 or Euros, in the case of each Facility B Letter of Credit
issued on behalf of the European 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 $50,000,000 and (iii) the Borrowers
shall be in compliance with the Revolving Exposure Limitations.




          (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










 



75

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 Letters 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 11:00 a.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 11:00 a.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
11:00 a.m., Local Time, on the day of receipt, or (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










 



76

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, interruption, loss or delay in transmission or 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










 



77

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) of this Section to reimburse
such Issuing Bank shall be for the account of such Lender to the extent of such payment.




          (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 to issue additional Letters of Credit.




          (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 Lenders and the 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










 



78

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 Lenders and the 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 applied, shall be held for the satisfaction of the
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.










 



79




     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 be retained by the Administrative 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.

















 





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     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.



          (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



 









 





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     (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 Administrative Agent, the
Canadian Administrative Agent or the European Administrative 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



 









 







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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. (a) Unless previously
terminated, all Commitments shall terminate on the Maturity Date.



          (b) The Borrowers may at any time terminate in full the Commitments and/or may at any time
terminate in full the European Sublimit and/or the Canadian Sublimit upon (i) the payment in full
in cash of all outstanding Loans, European Loans or Canadian Loans, as applicable, together with
accrued and unpaid interest thereon and on any Letters of Credit, European 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, including the Prepayment Fee, if applicable, and (iv)
the payment in full in cash of all reimbursable expenses and other Obligations, Obligations of the
European 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 and any Loan Guaranties of the European Borrower 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 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 and any Loan Guaranties of the Canadian Borrower 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



 









 







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Facility B Commitments. For the avoidance of doubt, all 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, (iii) each such reduction prior to the first anniversary of the Effective Date shall be
accompanied by a payment to the Administrative Agent for the benefit of the Facility A Lenders
(with respect to any reduction of the Facility A Commitments) or the European Administrative Agent
for the benefit of the Facility B Lenders (with respect to any reduction in the Facility B
Commitments), of a Prepayment Fee 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 or the European 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.




     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 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



 









 





84



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 the extent such payment is made in connection with a Canadian Revolving
Loan, a BA Drawing or a Canadian Protective Advance.




          (b) On each Business Day, 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); provided that other than during any Full Cash Dominion Period, the foregoing
shall apply exclusively to the European Borrower (including any Collection Account thereof) and the
prepayment of European Protective Advances, European Revolving Loans and Revolving Exposure
relating to the European Borrower in respect of its Facility B Loans. 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 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 and the Canadian Borrower, as directed by the Administrative Agent) and (ii) from
Collection Accounts of the European Loan Parties or the Canadian Loan Parties, solely in respect of
Obligations of the European 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 and the Canadian 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 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



 









 







85



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 amounts to the applicable Loan Party upon such Loan Party’s
request.




          (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 (other than any applicable Prepayment Fee
owing in connection with a Prepayment Event), 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



 









 







86



Revolving Loans and Swingline Loans prior to any cash collateralization of LC Exposure
hereunder).




          (c) (i) 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), the Borrowers shall, immediately after such Net Proceeds are received by the Company or
any Subsidiary, prepay the Revolving Loans and Swingline Loans and, to the extent that such Net
Proceeds exceed the amount of the Revolving Loans and Swingline Loans outstanding, cash
collateralize outstanding LC Exposure in an aggregate amount equal to 100% of such Net Proceeds.




               (ii) In the event and on each occasion that the Company or any Subsidiary receives an
Eligible Tax Refund, the Borrowers shall, immediately after such amounts are received by the
Company or any Subsidiary, prepay the Revolving Loans and Swingline Loans and, to the extent that
the amount of such Eligible Tax Refund exceeds the amount of the Revolving Loans and Swingline
Loans outstanding, cash collateralize outstanding LC Exposure in an aggregate amount equal to 100%
of such Eligible Tax Refund.



          (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



 









 







87



the extent such payment is made in connection with a Canadian Letter of Credit or a Canadian
Loan.




     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, and (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 (ii) 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 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.




 









 








88




          (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 payable on demand, (ii) in the event of 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



 









 







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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 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 denominated in Canadian Dollars.




          (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 absent manifest error) that adequate and reasonable 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 (or
Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;



 









 





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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, 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 (or Lender) of making or maintaining their Loans (or its Loan)
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 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 the 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;



 









 





91





     (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 of 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 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



 









 







92



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 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



 









 





93



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.




          (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, 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. A certificate as to the 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



 









 







94



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,




     (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,



 









 





95





     (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.



Each Lender agrees that if any form or certification it 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 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



 









 







96



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 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, in each 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



 









 





97



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.




          (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,



 









 







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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 Banking Services
Obligations, Acceptance Obligations and Secured Swap Obligations owing or guaranteed by such Loan
Party, ratably, ninth, 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 tenth, 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
Administrative Agent, the Canadian Administrative Agent 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, respectively.




          (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,



 









 







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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 Loans or participations in LC 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.




 









 








100




          (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
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;




     (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



 









 





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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 and sixty-five 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



 









 







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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.




          (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



 









 







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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 Agent
the amount of Discount Proceeds of such BA Equivalent 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



 









 







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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
Revolving Lender, Bankers’ Acceptances under this Agreement to be accepted by such 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”) 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



 









 





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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 (or Lender) 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.




     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 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;




     (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



 









 





106





     (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 collateralizes 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
non-Specified Defaulting Lenders’ Applicable Percentages;




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 any Administrative
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 or
Letter of Credit, (iv)



 









 





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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
reimbursement 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 and LC 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.




 











 





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     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, 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 through
service or notice, attachment 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. 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,









 



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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 (reported on a monthly basis) (i) as of and for the fiscal years
ended December 30, 2006 and December 29, 2007, reported on by Deloitte & Touche LLP, a registered
public accounting firm, and (ii) as of and for the fiscal quarters and the portion of the fiscal
year ended April, 5, 2008, July 5, 2008 and October 4, 2008, certified by its chief financial
officer. 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, subject to year end audit
adjustments in the case of the statements referred to in clause (ii) above. 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 referred to in this paragraph.



          (b) Except for the Disclosed Matters, since December 29, 2007, 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. 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, 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.




     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) as to which there is a reasonable possibility of an adverse determination and
that, if adversely determined, 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.









 



110


          (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.



     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.



     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









 



111



statements reflecting such amounts, exceed the fair market value of the assets of such Plan
allocable to such accrued benefits.



          (b) 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 by applicable law or by the terms of any Foreign Benefit Arrangement
or Foreign 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.




          (c) (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 reasonably be
expected to result, individually or in the aggregate, in a Material Adverse Effect.




          (d) 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;









 



112



     (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
withdrawals, or applications of, the assets of any Canadian Pension Plans;




     (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 each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the









 



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present fair saleable value of the property of each Loan 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 Loan 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 Loan 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 Loan Party has ceased paying its current obligations in the
ordinary course of business as they generally become due, (vi) the property of each Loan Party, at
a fair valuation, is greater than the total amount of its debts and liabilities, subordinated,
contingent or otherwise; (vii) each Loan Party’s property is sufficient, if disposed of at a fairly
conducted sale under legal process, to enable payment of all its obligations, due and accruing due;
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).



          (b) 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 Indebtedness of any such Subsidiary.




     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 Lenders and the Issuing Banks, and
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









 



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Collateral Documents, as necessary (including but not limited to the filing of financing
statements under the PPSA), 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 claim may be made against any Loan Party or 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.









 



115


     SECTION 3.21 Certain Documents. The Borrower Representative has delivered to the
Administrative Agent a complete and correct copy of any agreements governing the Euro Notes
Documentation and the Synthetic Lease Documentation, including any material amendments, supplements
or modifications with respect to any of the foregoing.



ARTICLE IV




Conditions




     SECTION 4.01 Effective Date. Subject to Section 9.27, 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 (other than clause (e) below) is satisfied (or waived in accordance with
Section 9.02) (it being understood that clause (e) shall be satisfied on the first day following
the Effective Date (with no grace period applicable thereto)):




     (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 transmission of a signed 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 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 2006
and 2007 fiscal years, (ii) unaudited interim consolidated financial statements of the
Company and its Subsidiaries for each fiscal quarter 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) quarterly projections for each fiscal
quarter ending January 3, 2009 through December 31, 2009 and (iv) annual projections for
fiscal year 2010 through 2011.




     (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 the Financial Officers and any other officers or
managers of such Loan Party authorized to sign the Loan Documents to which









 



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it is a party, and (C) 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 and (with respect to any European 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 initial Borrowing date (i) stating that no Default has occurred and is continuing, (ii)
stating 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 expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), 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 assets of the Loan Parties (other
than the European Loan Parties) are located, 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,
which shall provide a representation as to solvency in a director’s certificate).









 



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     (j) Borrowing Base Certificate. The Administrative Agent shall have received
(a) an Aggregate Borrowing Base Certificate which calculates the Aggregate Borrowing Base as
of December 6, 2008 and (b) a US Borrowing Base Certificate, Canadian Borrowing Base
Certificate and European Borrowing Base Certificate which calculates each such Borrowing
Base as of December 6, 2008.




     (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 $125,000,000.




     (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 Lenders and the 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) Environmental Reports. The Administrative Agent shall have received
environmental reports with respect to the real properties of the Company and its
Subsidiaries specified by the Administrative Agent from firm(s) satisfactory to the
Administrative Agent, which reports shall be in form and substance reasonably satisfactory
to the Administrative Agent. Any environmental hazards or liabilities









 



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identified in any such environmental reports shall indicate the Loan Parties’ plans
with respect thereto.




     (p) Mortgages, etc. The US Collateral Agent shall have received, with respect
to each Mortgaged Property, each of the following, in form and substance reasonably
satisfactory to the Administrative Agent:




     (i) a Mortgage on such property;




     (ii) evidence that a counterpart of the 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;




     (iii) ALTA or other mortgagee’s title insurance policy, together with such
endorsements thereto as may be required by the applicable Collateral Agent;




     (iv) an ALTA survey prepared and certified to the US Collateral Agent by a
surveyor acceptable to the Administrative Agent; and




     (v) 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 such other information, documentation, and certifications
as may be reasonably required by the Administrative Agent.




     (q) 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).




     (r) 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.




     (s) 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.




     (t) 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.




     (u) [Reserved].




     (v) 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









 



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the extent required for compliance with the Patriot Act or other “know your customer”
and anti-money laundering rules and regulations.




     (w) 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, in form and substance reasonably acceptable to the Administrative
Agent.




     (x) 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.




     (y) Subordination Agreement. The Administrative Agent shall have received a
duly executed copy of the Hong Kong Subordination Agreement.




     (z) Global Note. The Administrative Agent shall have received a duly executed
copy of an intercompany global note, in form and substance reasonably acceptable to it,
among all of the Loan Parties existing on the Effective Date.




     (aa) Repayment of Existing Mexx Indebtedness. On the Effective Date, the
Administrative Agent shall have received satisfactory evidence that the Existing Mexx
Indebtedness shall have been repaid and/or cancelled and all documentation representing such
indebtedness shall have been terminated or that adequate measures shall have been taken to
terminate such documentation, except as otherwise agreed by the Administrative Agent.  




     (bb) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent, the European Administrative Agent, the Canadian
Administrative Agent, any Collateral Agent, any Issuing Bank, any Lender or their respective
counsel may have reasonably requested.


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 (other than clause (e) as set forth above) is satisfied (or waived pursuant to
Section 9.02) at or prior to 2:00 p.m., New York time, on January 15, 2009, (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, 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









 



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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.




     (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, 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,
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









 



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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 audit) to the effect that such 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, 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) setting forth reasonably detailed
calculations 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;









 



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     (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 of their 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 and
consolidating balance sheet, income statement and funds flow statement in form acceptable to
the Administrative Agent) 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 of the end of each fiscal
month (or, following the date that is three months after the Effective Date, within three
Business Days of the end of each week at any time during a Level 1 Minimum Aggregate
Availability Period), an Aggregate Borrowing Base Certificate, a US Borrowing Base
Certificate, a Canadian 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 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 or European Borrowing
Base Certificate or additional reports with respect thereto shall be required if the
European Sublimit or Canadian Sublimit, as applicable, shall have been terminated;




     (h) as soon as available but in any event within 20 days of the end of each fiscal
month (or, following the date that is three months after the Effective Date, within three
Business Days of the end of each week at any time during a Level 1 Minimum Aggregate
Availability 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









 



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indicated to the Loan Parties are deemed by the Administrative Agent to be
appropriate, (2) including a report of any variances or other results of Inventory
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 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;









 



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     (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) filed by any 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, or (v) alleges the









 



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violation of any law regarding, or seeks remedies in connection with, any Environmental
Laws, (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;




     (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.


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
dissolution 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.









 



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     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 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 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.




     (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









 



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     (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) 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 unless
it constitutes an Approved Pension Scheme.




     (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









 



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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 applied 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.



          (d) 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 (d) 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 promptly develop and diligently implement
a 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 in the ordinary course of business, including
refinancing certain existing Indebtedness, acquisitions and repurchasing capital stock. 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 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 and (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









 



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Administrative Agent in its Permitted Discretion. 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 no more than two occasions (or, with respect to
appraisals of real property, no more than one occasion) per calendar year, at the request of 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 or real
property, as applicable, from an appraiser selected and 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 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 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 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].









 



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     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 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 grant to such Collateral Agent (for the benefit of the Agents, the Lenders and the
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 applicable Collateral Agent (in
each case for the benefit of the Agents, the Lenders and the 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 any 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) 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, 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










 



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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 existing deposit accounts of any Subsidiary 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, Lenders and 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 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(p), all at the expense of the Loan Parties.




     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
and German Loan Party shall comply in all respects with applicable legislation governing financial
assistance.



          (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 its commercially reasonable efforts to deliver to the




 











 





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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.




     SECTION 5.17 Transfer of Accounts of European Loan Parties. Upon the occurrence of a
European Account Transfer Trigger Event, the 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 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, the Company and each 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 European Loan Parties in substantially the same
manner as in effect on the date hereof.



     (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 Items(a) . The Company and its Subsidiaries, as applicable,
shall take or cause to be taken each action set forth on Schedule 5.19 and such action is
to be completed within the time period set forth on Schedule 5.19 for such action, it being
understood that the Administrative Agent may, in its sole discretion, grant extensions to the time
period set forth thereon.



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:



     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;









 



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     (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 $75,000,000 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), (l) and (m) 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, (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









 



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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, 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 Company
shall be in compliance with Section 6.16 (determined on a Pro Forma Basis in respect of the
Test Period in effect at such time, to the extent applicable); provided
further 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) Indebtedness in respect of 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 $40,000,000;




     (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









 



135



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; and




     (s) other unsecured Indebtedness not otherwise permitted by this Section 6.01;
provided the aggregate principal amount of all Indebtedness permitted by this
paragraph (s) shall not exceed $100,000,000 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:




     (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, (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 and (iii) for the
avoidance of doubt, no such Lien securing any bilateral operating facility shall be
permitted;




     (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









 



136



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;




     (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 date hereof (prior to giving effect
to this amendment and restatement) 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; and




     (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.


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 clause (a) above, (ii) Inventory, other than those
permitted under clauses (a) and (b) of the definition of Permitted Encumbrance and clause (a) above
or (iii) real property, other than those permitted under clauses (a), (b), (f) and (g) of the








 



137


definition of Permitted Encumbrance and clause (a) and (g) 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 is the surviving entity, (ii) any Loan Party
(other than a Borrower) may merge or amalgamate into or with any Loan Party in a transaction in
which the surviving entity is a Loan Party, (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
the assets of such Loan Party are transferred to another Loan Party, and (v) any non-Loan Party 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









 



138



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 the Required Fixed Charge Coverage Ratio
(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 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 the Required Fixed Charge Coverage Ratio
(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 the Required Fixed Charge
Coverage Ratio (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.









 



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     (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 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;




     (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, (ii) the Fixed Charge Coverage Ratio for
the Test Period in effect at the time such Permitted Acquisition is to occur shall be at
least the Specified Fixed Charge Coverage Ratio (determined on a Pro Forma Basis in respect
of the Test Period in effect at such time) and (iii) no Level 1 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









 



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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
$15,000,000;




     (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 $25,000,000; and




     (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 the Required Fixed Charge Coverage Ratio (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 (q) shall not
exceed $50,000,000 in any fiscal year of the Company;


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, lease or otherwise dispose of any asset, 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;









 



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     (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 or cash
collateralize Letters of Credit hereunder in accordance with Section 2.11(c);




     (h) licenses of Intellectual Property that are in furtherance of, or integral to, other
business transactions entered into by the Company or a Subsidiary in the ordinary course of
business;




     (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; and




     (k) dispositions of cash and property permitted by Section 6.04(g),


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) and (j) above shall be made for fair value and for at least 75% cash
consideration.




     SECTION 6.06 [Reserved].



     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; and (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).









 



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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, 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, 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 the 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 (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 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) payment in respect of one or more bilateral operating facilities
provided by financing entities outside of the United States in an aggregate
amount not to exceed $25,000,000;




     (H) payments to Liz Claiborne International Limited in respect of the
Hong Kong Intercompany Receivable the proceeds of which shall be used to pay
(i) its 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 its
corporate existence, (iii) customary salary, bonus









 



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and other benefits payable to officers and employees, consistent with
past practice or (iv) taxes that are due and payable by Liz Claiborne
International Limited; and




     (I) 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 Charge Coverage Ratio for the Test
Period in effect at the time such payment is to occur shall be at least the
Required Fixed Charge Coverage Ratio (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 or Canadian Loans
hereunder.



     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









 



144



relating to the sale of a Subsidiary or assets pending such sale, provided such restrictions
and conditions apply only to the Subsidiary or assets that is to be sold and such sale is permitted
hereunder, and (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.



     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 Synthetic Lease Documentation, 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 each case to the extent any such amendment, modification or waiver would be
materially adverse to the Lenders.



     SECTION 6.13 Capital Expenditures. The Loan Parties will not, nor will it permit any
Subsidiary to, incur or make any Capital Expenditures during any fiscal year of the Company set
forth below in an amount exceeding the amount set forth opposite such period:



	 	 	 	 	 
	 	 	Maximum
	Period	 	Capital Expenditures
	2009
	 	$	85,000,000	 
	2010 and thereafter
	 	4% of the total sales of the Company and its
	 
	 	Subsidiaries for the fiscal year most recently ended






     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 the Global
Headquarters on terms reasonably satisfactory to the Administrative Agent.



     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 the Saturday
closest to January 1 or change the Company’s method of determining fiscal quarters or fiscal
months.



     SECTION 6.16 Fixed Charge Coverage Ratio. The Loan Parties will not permit the Fixed
Charge Coverage Ratio, as of the last day of any fiscal month, for any Test Period ending during
any period set forth below to be less than the ratio set forth below opposite such period:









 



145


	 	 	 	 	 
	Period
	 	Fixed Charge Coverage 
Ratio
	The
Effective Date through but not including January 2, 2010 
	 	 	1.25 to 1.00	 
	 
	 	 	 	 
	January 2, 2010 and thereafter
	 	 	1.50 to 1.00	 






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) or
5.08 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









 



146



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 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 reorganisation (by
way of voluntary arrangement, scheme of arrangement or otherwise) of any
member of the European Group;









 



147



     (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;




     (a) (i) any Loan Party or any 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 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); 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 not
cure any Event of Default caused by that moratorium).









 



148



     (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
$25,000,000 (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









 



149



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 any Subsidiary of a Loan
Party or other Affiliate thereof as if it were not









 



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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, document or other writing or communication believed









 



151



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









 



152



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,









 



153



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 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.



          (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 English Security Agreement on the terms and conditions set
forth on Schedule 8.



          (k) The Syndication Agents and Documentation Agent 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 provisions hereof with respect to the Canadian Collateral Agent
mutatis mutandis, including, without limitation, all such provisions with respect to the liability
or









 



154



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 Collateral Document governed by Austrian law (each an “Austrian
Collateral Document”), each Lender, each Issuing Bank 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 in their favor; 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 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) 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; and




          (iii) authorizes the European Collateral Agent to authorize any other Person with
substitute powers to act for and on behalf of them.



          (o) 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:









 



155
 


                    (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).


          (p) 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 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).


          (q) In relation to any Collateral Document governed 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
 






 



156



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. 




          (r) 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 authorizes and directs
JPMorgan Chase Bank, N.A. to enter into the Intercreditor Agreement on behalf of such Lender and
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.



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










 



157



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: Donna DiForio

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 or the European 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, Floor 18

Toronto M57 2J2 Canada










 



158



Attention: Dan Howat

Telecopy: (416) 981-2375





     (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, Floor 18

Toronto M57 2J2 Canada

Attention: Dan Howat

Telecopy: (416) 981-2375





     (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.




 











 



159


          (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 the 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).




     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 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 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









 



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the Effective Date (including adding new categories of eligible assets or eliminating any
category of the reserves), in any manner that has the effect of weakening or eliminating any
applicable eligibility criteria or increasing the amounts available to be borrowed hereunder
without the written consent of the Supermajority Lenders, (vii) reduce or eliminate reserves
related to the Synthetic Lease Obligations without the consent of each Lender, (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 from its obligation under its Loan Guaranty (except as otherwise
permitted herein or in the other Loan Documents), without the written consent of each Lender, (x)
except as provided in paragraph (c) 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) change Section 2.11(c) without the written consent of the Supermajority
Lenders or (xiii) 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 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.




          (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 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.










 



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          (e) If, in connection with any proposed amendment, waiver or consent requiring the consent of
“each Lender” or “each Lender affected thereby,” 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
out-of-pocket expenses incurred by the Administrative Agent, the European Administrative Agent, the
Canadian Administrative Agent, each Collateral Agent, 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;









 



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     (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) background checks regarding senior management, as deemed necessary or
appropriate in the sole discretion of the Administrative Agent;




     (v) 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;




     (vi) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take; and




     (vii) 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









 



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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.




     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 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









 



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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 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 Section
9.04(c)(ii) at any time shall include an outstanding portion 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(b), the term “Approved Fund” has the following
meaning:









 



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     “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 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









 



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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 each Participant’s interest in the Loans or other 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.









 



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     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 Loan Documents and any separate letter agreements with 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









 



168



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) 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 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. 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









 



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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 Agreement, (e) in connection with the 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









 



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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 not relieve any other Lender 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.









 



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     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 terms are construed under the Criminal Code (Canada)) then, 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









 



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obligations hereunder and under any promissory notes evidencing the Loans hereunder and any
other Loan Document to the fullest extent permitted by applicable Requirements of 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 any adjudication expressed in a currency other than the
Currency of Payment, be 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”).









 



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          (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.




     (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









 



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     (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 assignee 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. 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









 



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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 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.



     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 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;










 



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          (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 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 9.27 Effectiveness of Article VIII. Notwithstanding anything to the contrary contained
herein, and notwithstanding the fact that the Effective Date shall not have occurred, each party
hereto hereby acknowledges and agrees that the provisions of Article VIII shall become effective
upon execution of this Agreement by all of the parties hereto; provided that, prior to the
Effective Date, any references in Article VIII to (a) the “Loan Documents” shall be deemed to refer
to the Existing Loan Documents, the Existing Security Agreements and any document related thereto,
(b) “Section 9.02” shall be deemed to refer to Section 10.02 of the Existing Credit Agreement, (c)
“Section 9.03” shall be deemed to refer to Section 10.03 in the Existing Credit Agreement, (d)
“Section 9.12” shall be deemed to refer to Section 10.13 in the Existing Credit Agreement, (e)
“Netherlands Security Agreement” or “English Security Agreement” shall be deemed to refer to each
Existing Security Agreement granting a Lien upon the property or assets of any Subsidiary organized
in the Netherlands or under the laws of England, as applicable, (f) “Collateral Document” shall be
deemed to refer to each document granting a Lien upon any of the property or assets of any
Subsidiary as security for payment of the obligations owing by the Company or any Subsidiary under
the Existing Loan Documents (any such agreement an “Existing Security Agreement”) and (g)
“German Security Trust Agreement” shall be deemed to refer to each document governed by the laws of
Germany appointing the European Collateral Agent as security trustee with respect to any security
interest created under any German Law Security Agreement and creating parallel debt obligations in
favor of the European Collateral Agent. The execution by the Administrative Agent and/or the
European Collateral Agent of any Existing Security Agreement and any related security trust
agreement is hereby ratified to the fullest extent permitted by applicable law by each Lender and
Issuing Bank.



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









 



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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 the foregoing to the contrary, in no event shall the Guaranteed 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) 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









 



178


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.




          (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 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










 



179



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% mulitipled 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) below and (ii) an amount equal to 1.50
multipled 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 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 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 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 fulfilment
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).

















 



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          (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 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 fulfilment 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 endeavours 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 endeavours 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).




     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









 



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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 Guarantor shall:




     (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-









 



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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 or
that 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









 



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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 neither any Agent, any Issuing Bank nor any Lender shall have 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









 



184

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:





     (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)









 



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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 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









 



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     (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.



     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









 



187

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 European Collateral Agent or the European Administrative Agent from time to 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,









 



188

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.



     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.
















 





     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/ Andrew C. Warren	 	 
	 

	 	Name:
	 	 

Andrew C. Warren
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	LIZ CLAIBORNE CANADA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Andrew C. Warren	 	 
	 

	 	Name:
	 	 

Andrew C. Warren
	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX EUROPE B.V.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	Managing Director	 	 





Signature Page to the Amended and Restated Credit Agreement



 









 








LOAN PARTIES:



C&C CALIFORNIA, INC.

JUICY COUTURE, INC.

SKYLARK SPORT MARKETING CORPORATION

DB NEWCO CORP.

ENYCE HOLDING LLC

ENYCE, L.L.C.

HAVANA LLC

KATE SPADE LLC

L. C. AUGUSTA, INC.

L.C. CARIBBEAN HOLDINGS, INC.

LC LIBRA, LLC

L.C. LICENSING, INC.

L.C. SERVICE COMPANY, INC.

L.C. SPECIAL MARKETS, INC.

LCI ACQUISITION U.S., INC.

LCI HOLDINGS, INC.

LCI INVESTMENTS, INC.

LCI LAUNDRY, 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.

SEGRETS, INC.

WESTCOAST CONTEMPO PROMENADE, INC.

WESTCOAST CONTEMPO RETAIL, INC.

WESTCOAST CONTEMPO (U.S.A.) INC.




	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Andrew C. Warren	 	 
	 

	 	Name:
	 	 

Andrew C. Warren
	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 





Signature
Page to the Amended and Restated Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	WESTCOAST CONTEMPO FASHIONS LIMITED	 	 
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ Nicholas Rubino	 	 
	 
	 	Name:	 	 
Nicholas Rubino	 	 
	 
	 	Title:	 	Director	 	 






	 	 	 	 	 	 	 
	 	 	LOAN PARTIES:	 	 
	 
	 	 	 	 	 	 
	 	 	LIZ CLAIBORNE, INC	 	 
	 
	 	 	 	 	 	 
	 
	 	By	 	/s/ Nicholas Rubino	 	 
	 

	 	Narne:
	 	 

Nicholas Rubino
	 	 
	 

	 	Title:
	 	Senior Vice President, Chief 

Legal Officer, General Counsel and Secretary	 	 







	 	 	 	 	 	 	 
	 	 	LOAN PARTIES:	 	 
	 
	 	 	 	 	 	 
	 	 	LIZ CLAIBORNE CANADA INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Nicholas Rubino	 	 
	 
	 	Name:	 	 
Nicholas Rubino	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX EUROPE B.V.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Gerard Johannes Berghuis	 	 
	 
	 	Name:	 	 
Gerard Johannes Berghuis	 	 
	 
	 	Title:	 	Managing Director	 	 






Signature Page to  Amended and Restated Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	MEXX AUSTRIA GMBH	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis
/s/ Anurup Singh Pruthi	 	 
	 

	 	Name:
	 	 

Gerard Johannes Berghuis and Anurup Singh Pruthi
	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX BELGIUM NV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX SCANDINAVIA FINLAND OY	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	RETRAIN NV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX BOUTIQUES SARL	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director	 	 





Signature Page to  Amended and Restated Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	MEXX DEUTSCHLAND GMBH	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis
/s/ Anurup Singh Pruthi	 	 
	 

	 	Name:
	 	 

Gerard Johannes Berghuis and Anurup Singh Pruthi
	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX DIRECT GMBH & CO KG	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis
/s/ Anurup Singh Pruthi	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis and Anurup Singh Pruthi	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX HOLDING GMBH	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis
/s/ Anurup Singh Pruthi	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis and
Anurup Singh Pruthi	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX MODEHANDELS GMBH	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis
/s/ Anurup Singh Pruthi	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis and
Anurup Singh Pruthi	 	 
	 

	 	Title:
	 	directors	 	 
	 
	 	 	 	 	 	 
	 	 	VERWALTUNGSGESELLSCHAFT MEXX DIRECT GMBH	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis
/s/ Anurup Singh Pruthi	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis and
Anurup Singh Pruthi	 	 
	 

	 	Title:
	 	directors	 	 





Signature Page to Amended and Restated Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	MEXX HELLAS EPE	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	Name:
	 	 

Gerard Johannes Berghuis
	 	 
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 	 	GIVEN UNDER THE COMMON SEAL OF MEXX IRELAND LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Anurup S. Pruthi & /s/ G. J. Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Anurup S. Pruthi & G. J. Berghuis	 	 
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director/secretary	 	 






	 	 	 	 	 	 	 
	 	 	MEXX ITALY S.R.L.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	Name:
	 	 

Gerard Johannes Berghuis
	 	  
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX LUXEMBOURG S.A.R.L.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director	 	 





Signature Page to Amended and Restated Credit Agreement



 









 








	 	 	 	 	 	 	 
	 	 	LIZ CLAIBORNE 3 BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	LIZ CLAIBORNE 2 BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX EUROPE BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX EUROPE HOLDING BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX EUROPE INTERNATIONAL BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 





Signature Page to Amended and Restated Credit Agreement




 











 





	 	 	 	 	 	 	 
	 	 	MEXX GROUP BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Gerard Johannes Berghuis
 

Gerard Johannes Berghuis
	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX HOLDING INTERNATIONAL BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX HOLDING NETHERLANDS BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX NEDERLAND BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX NEDERLAND RETAIL BV	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	managing director	 	 
	 
	 	 	 	 	 	 





Signature Page to Amended and Restated Credit Agreement




 









 








	 	 	 	 	 	 	 
	 	 	MEXX SCANDINAVIA AS	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Gerard Johannes Berghuis
 

Gerard Johannes Berghuis
	 	 
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX SOUTHERN EUROPE, S.L.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX SCANDINAVIA AKTIEBOLAG	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX MODEHANDELS AG	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director	 	 
	 
	 	 	 	 	 	 
	 	 	MEXX SWITZERLAND GMBH	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Gerard Johannes Berghuis	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Gerard Johannes Berghuis	 	 
	 

	 	Title:
	 	director	 	 






Signature Page to  Amended and Restated Credit Agreement




 









 









	 	 	 	 	 	 	 
	 	 	MEXX LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Gerard Johannes Berghuis /s/ Anurup Singh Pruthi
 

Gerard Johannes Berghuis and Anurup Singh Pruthi
	 	 
	 

	 	Title:
	 	directors	 	 






	 	 	 	 	 	 	 
	 	 	MEXX DIRECT HOLDING B.V.	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Gerard Johannes Berghuis
 

Gerard Johannes Berghuis
	 	 
	 

	 	Title:
	 	Managing Director	 	 






Signature Page to  Amended and Restated Credit Agreement




 









 








	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., individually,

as Administrative Agent, US Collateral Agent and

Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Kathleen C. Maggi
 

Kathleen C. Maggi
	 	 
	 

	 	Title:
	 	SVP	 	 







	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., TORONTO

BRANCH, individually, as Canadian

Administrative Agent and Canadian Collateral

Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Dan Howat
 

Dan Howat
	 	 
	 

	 	Title:
	 	SVP	 	 






	 	 	 	 	 	 	 
	 	 	J.P. MORGAN EUROPE LIMITED, individually,

as European Administrative Agent and European

Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Tim Jacob
 

Tim Jacob
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 







Signature Page to the Amended and Restated Credit Agreement




 









 








	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., individually, as

Syndication Agent and Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Christine Hutchinson
 

Christine Hutchinson
	 	 
	 

	 	Title:
	 	Principal	 	 






	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Bernisi Morrin
 

Bernisi Morrin
	 	 
	 

	 	Title:
	 	Operations Manager	 	 
	 

	 	 	 	GCIB Credit Services supporting	 	 
	 

	 	 	 	Business Capital Europe	 	 
	 

	 	 	 	Assistant Vice-President	 	 






	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., CANADA BRANCH, 

as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Clara McGobbon
 

Clara McGobbon
	 	 
	 

	 	Title:
	 	A.V.P; Credit Services Consultant	 	 






	 	 	 	 	 	 	 
	 	 	SUNTRUST BANK, individually, as Syndication

Agent and Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Patrick Wiggins
 

Patrick Wiggins
	 	 
	 

	 	Title:
	 	Vice President	 	 







Signature Page to the Amended and Restated Credit Agreement




 









 








	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL

ASSOCIATION, individually, as Documentation

Agent and Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Irene Rosen Marks
 

Irene Rosen Marks
	 	 
	 

	 	Title:
	 	Managing Director	 	 






	 	 	 	 	 	 	 
	 	 	HSBC BANK USA, N.A., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Elizabeth R. Peck
 

	 	 
	 

	 	Name:
	 	Elizabeth R. Peck	 	 
	 

	 	Title:
	 	Senior Vice President	 	 






	 	 	 	 	 	 	 
	 	 	FORTIS CAPITAL CORPORATION, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Douglas Riahi
 

Douglas Riahi
	 	 
	 

	 	Title:
	 	Managing Director	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Steven D. Silverstein
 

Steven D. Silverstein
	 	 
	 

	 	Title:
	 	Director	 	 






	 	 	 	 	 	 	 
	 	 	ING BANK N.V., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ A.M.W. Essex
 

A.M.W. Essex
	 	 
	 

	 	Title:
	 	Managing Director	 	 







Signature Page to the Amended and Restated Credit Agreement




 









 








	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK MELLON, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ David B. Wirl
 

David B. Wirl
	 	 
	 

	 	Title:
	 	Vice President	 	 






	 	 	 	 	 	 	 
	 	 	CITIBANK, N.A., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Thomas Halsch
 

Thomas Halsch
	 	 
	 

	 	Title:
	 	Director & Vice President	 	 






	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Frances W. Josephic
 

Frances W. Josephic
	 	 
	 

	 	Title:
	 	Vice President	 	 







Signature Page to the Amended and Restated Credit Agreement






 









 








	 	 	 	 	 	 
	 	 	COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
	 	 	as Lender	 
	 
	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Claudia Rost    /s/ G. Rod McWalters
 

Claudia Rost          G. Rod McWalters
	 
	 

	 	Title:
	 	Vice President       Senior Vice President	 






Signature Page to the Amended and Restated Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	COMERICA BANK, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Liesl Eckhardt
 

Liesl Eckhardt
	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 






	 	 	 	 	 	 	 
	 	 	THE HUNTINGTON NATIONAL BANK, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Jeff D. Blendick
 

Jeff D. Blendick
	 	 
	 

	 	Title:
	 	V.P. Loan Syndications	 	 







	 	 	 	 	 	 	 
	 	 	UNION BANK OF CALIFORNIA, N.A., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Ching Lim
 

Ching Lim
	 	 
	 

	 	Title:
	 	Vice President	 	 





Signature Page to the Amended and Restated Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	BANQUE ARTESIA NEDERLAND N.V., as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ A.J.J. Jacobs
 

A.J.J. Jacobs
	 	 
	 

	 	Title:
	 	Sr. Account Manager Corporate Banking	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ mr. W. Hulstein
 

mr. W. Hulstein
	 	 
	 

	 	Title:
	 	Branch Manager The Hague	 	 







	 	 	 	 	 	 	 
	 	 	ISRAEL DISCOUNT BANK OF NEW YORK, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Jeffrey Ackerman
 

Jeffrey Ackerman
	 	 
	 

	 	Title:
	 	SVP	 	 
	 
	 	 	 	 	 	 
	 	 	ISRAEL DISCOUNT BANK OF NEW YORK, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ Edward Behnen
 

Edward Behnen
	 	 
	 

	 	Title:
	 	AVP	 	 






	 	 	 	 	 	 	 
	 	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
BRANCH, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By

Name:
	 	/s/ LILLIANKIM
 

LILLIANKIM
	 	 
	 

	 	Title:
	 	AUTHORIZED SIGNATORY	 	 






Signature Page to the Amended and Restated Credit Agreement