Exhibit 10.4





Exhibit 10.4




EXECUTION COPY




INTERCREDITOR AGREEMENT




between




BANK OF AMERICA, N.A.,




as ABL Agent,




and




JPMORGAN CHASE BANK, N.A.,




as Term Agent




Dated as of June 17, 2011




 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page No.	 
	 
	 	 	 	 
	ARTICLE 1 DEFINITIONS
	 	 	2	 
	Section 1.1 UCC Definitions
	 	 	2	 
	Section 1.2 Other Definitions
	 	 	3	 
	Section 1.3 Rules of Construction
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 2 LIEN PRIORITY
	 	 	18	 
	Section 2.1 Priority of Liens
	 	 	18	 
	Section 2.2 Waiver of Right to Contest Liens
	 	 	20	 
	Section 2.3 Remedies Standstill
	 	 	20	 
	Section 2.4 Exercise of Rights
	 	 	22	 
	Section 2.5 No New Liens
	 	 	24	 
	Section 2.6 Waiver of Marshalling
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 3 ACTIONS OF THE PARTIES
	 	 	25	 
	Section 3.1 Certain Actions Permitted
	 	 	25	 
	Section 3.2 Agent for Perfection
	 	 	26	 
	Section 3.3 Sharing of Information and Access
	 	 	27	 
	Section 3.4 Insurance
	 	 	27	 
	Section 3.5 No Additional Rights For the Credit Parties Hereunder
	 	 	27	 
	Section 3.6 Inspection and Access Rights
	 	 	28	 
	Section 3.7 Tracing of and Priorities in Proceeds
	 	 	30	 
	Section 3.8 Purchase Right
	 	 	31	 
	Section 3.9 Payments Over
	 	 	34	 
	 
	 	 	 	 
	ARTICLE 4 APPLICATION OF PROCEEDS
	 	 	34	 
	Section 4.1 Application of Proceeds
	 	 	34	 
	Section 4.2 Specific Performance
	 	 	36	 
	 
	 	 	 	 
	ARTICLE 5 INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS
	 	 	37	 
	Section 5.1 Notice of Acceptance and Other Waivers
	 	 	37	 
	Section 5.2 Modifications to ABL Documents, Term Documents and ABL Canadian Documents
	 	 	38	 
	Section 5.3 Reinstatement and Continuation of Agreement
	 	 	41	 
	 
	 	 	 	 
	ARTICLE 6 INSOLVENCY PROCEEDINGS
	 	 	42	 
	Section 6.1 DIP Financing
	 	 	42	 
	Section 6.2 Relief From Stay
	 	 	43	 
	Section 6.3 No Contest; Adequate Protection
	 	 	43	 
	Section 6.4 Asset Sales
	 	 	45	 
	Section 6.5 Separate Grants of Security and Separate Classification
	 	 	45	 
	Section 6.6 Enforceability
	 	 	46	 
	Section 6.7 ABL Obligations Unconditional
	 	 	46	 
	Section 6.8 Term Obligations Unconditional
	 	 	47	 





 


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	 	 	Page No.	 
	 
	 	 	 	 
	ARTICLE 7 MISCELLANEOUS
	 	 	47	 
	Section 7.1 Rights of Subrogation
	 	 	47	 
	Section 7.2 Further Assurances
	 	 	48	 
	Section 7.3 Representations
	 	 	48	 
	Section 7.4 Amendments
	 	 	48	 
	Section 7.5 Addresses for Notices
	 	 	49	 
	Section 7.6 No Waiver; Remedies
	 	 	49	 
	Section 7.7 Continuing Agreement, Transfer of Secured Obligations
	 	 	49	 
	Section 7.8 GOVERNING LAW; ENTIRE AGREEMENT
	 	 	50	 
	Section 7.9 Counterparts
	 	 	50	 
	Section 7.10 No Third Party Beneficiaries
	 	 	50	 
	Section 7.11 Headings
	 	 	50	 
	Section 7.12 Severability
	 	 	50	 
	Section 7.13 Attorneys’ Fees
	 	 	51	 
	Section 7.14 VENUE; JURY TRIAL WAIVER
	 	 	51	 
	Section 7.15 Intercreditor Agreement
	 	 	52	 
	Section 7.16 No Warranties or Liability
	 	 	52	 
	Section 7.17 Conflicts
	 	 	52	 
	Section 7.18 Costs and Expenses
	 	 	52	 
	Section 7.19 Information Concerning Financial Condition of the Credit Parties
	 	 	53	 






 


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INTERCREDITOR AGREEMENT




THIS INTERCREDITOR AGREEMENT (as amended, supplemented, restated, amended and restated or
otherwise modified from time to time pursuant to the terms hereof, this “Agreement”) is
entered into as of June 17, 2011 between BANK OF AMERICA, N.A. (“Bank of America”), in its
capacities as administrative agent and collateral agent (together with its successors and assigns
in such capacities, the “ABL Agent”) for (i) the financial institutions, lenders and
issuers party from time to time to the ABL Credit Agreement referred to below (such financial
institutions, lenders and issuers together with their respective successors, assigns and
transferees, including any letter of credit issuers under the ABL Credit Agreement, the “ABL
Lenders”), (ii) any ABL Cash Management Affiliates (as defined below) and (iii) any ABL Hedging
Affiliates (as defined below) (such ABL Cash Management Affiliates and ABL Hedging Affiliates,
together with the ABL Agent and the ABL Lenders and any other secured parties under any ABL Credit
Agreement or any other ABL Document (as defined below), the “ABL Secured Parties”), and
JPMORGAN CHASE BANK, N.A., in its capacities as administrative agent and collateral agent (together
with its successors and assigns in such capacities, the “Term Agent”) for (i) the financial
institutions, lenders and investors party from time to time to the Term Credit Agreement referred
to below (such financial institutions, lenders and investors, together with their respective
successors, assigns and transferees, the “Term Lenders”), (ii) any Term Cash Management
Affiliates (as defined below) and (iii) any Term Hedging Affiliates (as defined below) (such Term
Cash Management Affiliates and Term Hedging Affiliates, together with the Term Agent and the Term
Lenders and any other secured parties under any Term Credit Agreement or any other Term Document
(as defined below), the “Term Secured Parties”).



RECITALS




A. Pursuant to that certain Credit Agreement dated as of August 26, 2008 among Warnaco Inc., a
Delaware corporation (“Warnaco” or the “ABL US Borrower”), The Warnaco Group, Inc.,
a Delaware corporation (“Holdings”), the ABL Lenders, the ABL Agent and certain other
Persons (as defined below) (as such agreement may be amended, supplemented, restated, amended and
restated, extended, renewed, replaced, refinanced and/or otherwise modified from time to time, the
“ABL Credit Agreement”), the ABL Lenders have agreed to make certain loans and other
financial accommodations to or for the benefit of the ABL US Borrower.



B. Pursuant to that certain Guaranty dated as of August 26, 2008 (as the same may be amended,
amended and restated, supplemented, restated, replaced and/or otherwise modified from time to time,
the “ABL US Credit Agreement Guaranty”) by the ABL Guarantors (as hereinafter defined) in
favor of certain of the ABL Secured Parties, the ABL Guarantors have agreed to guarantee the
payment of certain of the ABL US Borrower’s obligations under the ABL Documents.



C. Pursuant to that certain U.S. Loan Party Canadian Facility Guaranty dated as of August 26,
2008 (as the same may be amended, amended and restated, supplemented, restated, replaced and/or
otherwise modified from time to time, the “ABL Canadian Credit Agreement Guaranty”) by the
ABL Guarantors and the ABL US Borrower in favor of certain lenders,
issuers and other Persons, the ABL Guarantors and the ABL US Borrower have agreed to guarantee
the payment of certain of the ABL Canadian Secured Obligations (as defined below).


 


 









 





D. As a condition to the effectiveness of the ABL Credit Agreement and to secure the
obligations of the ABL US Borrower and the ABL Guarantors (the ABL US Borrower, the ABL Guarantors
and each other direct or indirect subsidiary or parent of the ABL US Borrower or any of their
affiliates that is now or hereafter becomes a party to any ABL Document, collectively, the “ABL
Credit Parties”) under and in connection with the ABL Documents, the ABL Credit Parties have
granted to the ABL Agent (for the benefit of the ABL Secured Parties) Liens (as hereinafter
defined) on the Collateral (as hereinafter defined).



E. Pursuant to that certain Credit Agreement dated as of the date hereof among Warnaco,
certain subsidiaries of Warnaco (together with Warnaco, the “Term Borrowers”),
Holdings, the Term Lenders and the Term Agent (as such agreement may be amended, supplemented,
restated, amended and restated, extended, renewed, replaced, refinanced and/or otherwise modified
from time to time, the “Term Credit Agreement”), the Term Lenders have agreed to make a
term loan to the Term Borrowers.



F. Pursuant to that certain Guaranty dated as of the date hereof (as the same may be amended,
amended and restated, supplemented, restated, replaced and/or otherwise modified from time to time,
the “Term Guaranty”) by the Term Guarantors (as hereinafter defined) in favor of certain of
the Term Secured Parties, the Term Guarantors have agreed to guarantee the payment of certain of
the Term Borrowers’ obligations under the Term Documents (as hereinafter defined).



G. As a condition to the effectiveness of the Term Credit Agreement and to secure the
obligations of the Term Borrowers and the Term Guarantors (the Term Borrowers, the Term Guarantors
and each other direct or indirect subsidiary or parent of any of the Term Borrowers or any of its
affiliates that is now or hereafter becomes a party to any Term Document, collectively, the
“Term Credit Parties”) under and in connection with the Term Documents, the Term Credit
Parties have granted to the Term Agent (for the benefit of the Term Secured Parties) Liens on the
Collateral.



H. Each of the ABL Agent (on behalf of the ABL Secured Parties) and the Term Agent (on behalf
of the Term Secured Parties) and, by their acknowledgment hereof, the ABL Credit Parties and the
Term Credit Parties, desire to agree to the relative priority of Liens on the Collateral and
certain other rights, priorities and interests as provided herein.



NOW THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:



ARTICLE 1

DEFINITIONS




Section 1.1 UCC Definitions. The following terms which are defined in the Uniform Commercial Code are used herein as so
defined: Account, Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity Contract,
Deposit Account, Document, Electronic Chattel Paper, Equipment, Financial Asset, Fixtures, General
Intangible, Instrument, Inventory,
Investment Property, Letter-of-Credit Right, Money, Payment Intangible, Promissory Note, Records,
Security, Securities Account, Security Entitlement, Supporting Obligation and Tangible Chattel
Paper.


 


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Section 1.2 Other Definitions. Subject to Section 1.1, as used in this Agreement, the following terms shall have the meanings
set forth below:



“ABL Agent” shall have the meaning assigned to that term in the introduction to this
Agreement and shall include any successor or successors thereto as well as any Person designated as
the “Agent”, “Administrative Agent”, “Collateral Agent”, or similar term under any ABL Credit
Agreement.



“ABL Canadian Credit Agreement” shall mean that certain Credit Agreement dated as of
August 26, 2008 among Warnaco of Canada Company, Holdings, the lenders and letter of credit issuers
party thereto from time to time, Bank of America, as administrative agent and as collateral agent,
and certain other Persons, as such agreement may be amended, supplemented, amended and restated,
extended, renewed, replaced, refinanced and/or otherwise modified from time to time and shall
include any one or more other agreements, indentures or facilities extending the maturity of,
consolidating, restructuring, refunding, replacing or refinancing all or any portion of the ABL
Canadian Secured Obligations, whether by the same or any other agent, trustee, lender, group of
lenders, creditor or group of creditors and whether or not increasing the amount of any
Indebtedness that may be incurred thereunder.



“ABL Canadian Credit Agreement Guaranty” shall have the meaning assigned to that term
in the recitals to this Agreement and shall also include any other guaranty made by an ABL
Guarantor or the ABL US Borrower guaranteeing the payment of any ABL Canadian Secured Obligations.



“ABL Canadian Secured Obligations” shall mean the Secured Obligations (as defined in
the ABL Canadian Credit Agreement). 



“ABL Cash Management Affiliate” shall mean any ABL Cash Management Bank that is owed
ABL Cash Management Obligations by an ABL Credit Party and which ABL Cash Management Obligations
are secured by one or more ABL Collateral Documents, together with their respective successors,
assigns and transferees (even if such ABL Cash Management Bank ceases to be an Agent (as defined in
the ABL Credit Agreement), an ABL Lender or an Affiliate of an Agent (as defined in the ABL Credit
Agreement) or of an ABL Lender under the ABL Credit Agreement for any reason).



“ABL Cash Management Bank” shall mean any Person that is or was an Agent (as defined
in the ABL Credit Agreement) or an ABL Lender or an Affiliate of an Agent (as defined in the ABL
Credit Agreement) or of an ABL Lender.



“ABL Cash Management Obligations” shall mean obligations owed by the ABL US Borrower
or any other ABL Credit Party to any ABL Cash Management Bank in respect of or in connection with
any Cash Management Services. The term “ABL Cash Management Obligations” shall include “Cash
Management Obligations” constituting “Secured Obligations” (as such terms are defined in the ABL
Credit Agreement).


 


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“ABL Collateral Documents” shall mean all “Collateral Documents” or similar term as
defined in any ABL Credit Agreement, and all other security agreements, mortgages, deeds of trust,
account control agreements, customs brokers agreements, collateral access agreements, and other
collateral documents executed and delivered in connection with any ABL Credit Agreement, in each
case as the same may be amended, amended and restated, supplemented, restated, replaced or
otherwise modified from time to time.



“ABL Credit Agreement” shall have the meaning assigned to such term in the recitals to
this Agreement and shall include any one or more other agreements, indentures or facilities
extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or
any portion of the ABL Obligations, whether by the same or any other agent, trustee, lender, group
of lenders, creditor or group of creditors and whether or not increasing the amount of any
Indebtedness that may be incurred thereunder.



“ABL Credit Parties” shall have the meaning assigned to that term in the recitals to
this Agreement.



“ABL Deposit and Securities Accounts” shall mean all Deposit Accounts, Securities
Accounts, collection accounts and lockbox accounts (and all related lockboxes) of the Credit
Parties (other than the Term Loan Priority Accounts).



“ABL Documents” shall mean any ABL Credit Agreement, any ABL Canadian Credit Agreement
Guaranty, any ABL US Credit Agreement Guaranty, any ABL Collateral Document, all agreements
regarding Cash Management Services between the ABL US Borrower or any other ABL Credit Party and
any ABL Cash Management Affiliate, any ABL Hedging Agreement between any ABL Credit Party and any
ABL Hedging Affiliate, any other ancillary agreement as to which any ABL Secured Party is a party
or a beneficiary and all other agreements, instruments, documents and certificates, now or
hereafter executed by or on behalf of any ABL Credit Party or any of its respective Subsidiaries or
Affiliates, and delivered to the ABL Agent or any other ABL Secured Party, in connection with any
of the foregoing or any ABL Credit Agreement, in each case as the same may be amended, amended and
restated, supplemented, restated or otherwise modified from time to time.



“ABL Guarantors” shall mean the collective reference to (i) Holdings and each Domestic
Subsidiary (as defined in the ABL Credit Agreement) of Holdings (other than the ABL US Borrower)
and (ii) any other Person (other than, in the case of any ABL Canadian Credit Agreement Guaranty, a
Canadian Subsidiary of Holdings) who becomes a guarantor under any ABL Canadian Credit Agreement
Guaranty or any ABL US Credit Agreement Guaranty. The term “ABL Guarantors” shall include all
“Guarantors” as defined in the ABL Credit Agreement.



“ABL Hedge Bank” shall mean any Person that is or was an Agent (as defined in the ABL
Credit Agreement) or an ABL Lender or an Affiliate of an Agent (as defined in the ABL Credit
Agreement) or of an ABL Lender.



“ABL Hedging Affiliate” shall mean any ABL Hedge Bank that has entered into an ABL
Hedging Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder
being secured by one or more ABL Collateral Documents, together with their
respective successors, assigns and transferees (even if such ABL Hedge Bank ceases to be an
Agent (as defined in the ABL Credit Agreement), an ABL Lender or an Affiliate of an Agent (as
defined in the ABL Credit Agreement) or of an ABL Lender under the ABL Credit Agreement for any
reason).


 


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“ABL Hedging Agreement” shall mean any “Hedging Contract” as defined in the ABL Credit
Agreement.



“ABL Lenders” shall have the meaning assigned to that term in the introduction to this
Agreement, as well as any Person designated as a “Lender” or an “Issuer” or similar term under any
ABL Credit Agreement.



“ABL Obligations” shall mean any and all obligations of every nature of each ABL
Credit Party from time to time owed to the ABL Secured Parties, or any of them, under, in
connection with, or evidenced or secured by any ABL Document, including, without limitation, all
“Obligations”, “Secured Obligations” or similar term as defined in any ABL Credit Agreement and
whether for principal, interest, reimbursement of amounts drawn under letters of credit, payments
for early termination of ABL Hedging Agreements, fees, expenses, indemnification or otherwise, and
all other amounts owing or due under the terms of any ABL Document (including interest, fees,
expenses and indemnifications which, but for the filing of a petition in bankruptcy with respect to
such ABL Credit Party, would have become due or accrued on any ABL Obligation, whether or not a
claim is allowed against such ABL Credit Party for such interest, fees, expenses and
indemnifications in the related bankruptcy proceeding), as amended, restated, amended and restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.



“ABL Priority Collateral” shall mean all Collateral consisting of the following
(including for the avoidance of doubt, any such assets that, but for the application of Section 552
of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws), would be ABL
Priority Collateral):




(1) all Accounts, other than Accounts which constitute identifiable proceeds of Term
Priority Collateral;




(2) cash, Money and cash equivalents (other than identifiable proceeds of Term Priority
Collateral);




(3) all (x) Deposit Accounts (other than Term Loan Priority Accounts), lockbox accounts
and lockboxes (including in any event all Cash Collateral Accounts and Special Cash
Collateral Accounts, as such terms are defined in the ABL Credit Agreement) and Money and
all cash, checks, other negotiable instruments, funds and other evidences of payments held
therein (including funds on account of intercompany indebtedness between or among the Credit
Parties or their Affiliates to the extent owing in respect of ABL Priority Collateral), (y)
Securities Accounts (other than Term Loan Priority Accounts), Security Entitlements and
Securities credited to such a Securities Account (other than Equity Interests) and (z)
Commodity Accounts (other than Term Loan Priority Accounts) and Commodity Contracts credited
thereto, and, in each case, all cash, Money, cash equivalents, checks and other property held therein or
credited thereto (other than Equity Interests); provided, however, that to the extent that
identifiable proceeds of Term Priority Collateral are deposited in any such Deposit Accounts
or Securities Accounts, after the giving in accordance with Section 7.5 of a Term Cash
Proceeds Notice to the ABL Agent with respect to such identifiable proceeds, such
identifiable proceeds shall be treated as Term Priority Collateral;


 


5









 






(4) all Inventory;




(5) to the extent relating to, evidencing or governing any of the items referred to in
the preceding clauses (1) through (4) constituting ABL Priority Collateral, all Documents,
General Intangibles (including all rights under contracts but excluding any Intellectual
Property), Instruments (including Promissory Notes), Chattel Paper (including Tangible
Chattel Paper and Electronic Chattel Paper) and Commercial Tort Claims; provided that to the
extent any of the foregoing also relates to Term Priority Collateral, only that portion
related to the items referred to in the preceding clauses (1) through (4) shall be included
in the ABL Priority Collateral;




(6) to the extent relating to any of the items referred to in the preceding clauses (1)
through (5) constituting ABL Priority Collateral, all Supporting Obligations and
Letter-of-Credit Rights; provided that to the extent any of the foregoing also relates to
Term Priority Collateral only that portion related to the items referred to in the preceding
clauses (1) through (5) shall be included in the ABL Priority Collateral;




(7) all books and Records relating to the items referred to in the preceding clauses
(1) through (6) constituting ABL Priority Collateral (including all books, databases,
customer lists, engineer drawings, and Records, whether tangible or electronic, which
contain any information relating to any of the items referred to in the preceding clauses
(1) through (6) constituting ABL Priority Collateral but, in each case, excluding any
Intellectual Property); and




(8) all collateral security and guarantees with respect to any of the foregoing and all
cash, Money, cash equivalents, insurance proceeds, Instruments, Securities and Financial
Assets received as proceeds of any of the foregoing and any other proceeds of any of the
foregoing (such proceeds, “ABL Priority Proceeds”).




“ABL Recovery” shall have the meaning set forth in Section 5.3(a).



“ABL Secured Parties” shall have the meaning assigned to that term in the introduction
to this Agreement.



“ABL US Borrower” shall have the meaning assigned to that term in the recitals to this
Agreement.



“ABL US Credit Agreement Guaranty” shall have the meaning assigned to that term in the
recitals to this Agreement and shall also include any other guaranty made by an ABL Guarantor
guaranteeing the payment of any ABL Obligations.


 


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“Affiliate” shall mean, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified. “Control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.



“Agent(s)” shall mean individually the ABL Agent or the Term Agent and collectively
shall mean both the ABL Agent and the Term Agent.



“Agreement” shall have the meaning assigned to that term in the introduction to this
Agreement.



“Asset Sale Proceeds Pledged Account” shall mean an account held at, and subject to
the dominion and control of, the Term Agent in which the proceeds from any disposition of Term
Priority Collateral is held pending reinvestment pursuant to the Term Credit Agreement. For
clarity, the amounts on deposit in such Asset Sale Proceeds Pledged Account shall constitute
Collateral.



“Bank of America” shall have the meaning assigned to that term in the introduction to
this Agreement.



“Bankruptcy Code” shall mean Title 11 of the United States Code, as now or hereafter
in effect or any successor thereto.




“Borrowers” shall mean the ABL US Borrower and the Term Borrowers.



“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to remain closed (or are
in fact closed).



“Capitalized Leases” shall mean all leases that have been or are required to be, in
accordance with GAAP, recorded as capitalized leases; provided that for all purposes hereunder the
amount of obligations under any Capitalized Lease shall be the amount thereof accounted for as a
liability in accordance with GAAP.



“Cash Management Services” shall mean any agreement or arrangement to provide cash
management services, including automated clearinghouse transfers, controlled disbursement accounts,
treasury, depository, overdraft, credit card processing, credit or debit card, purchase card,
electronic funds transfer and other cash management arrangements.



“Collateral” shall mean all Property now owned or hereafter acquired by any Borrower
or any Guarantor in or upon which a Lien is granted or purported to be granted to any ABL Agent or
any Term Agent under any of the ABL Collateral Documents or the Term Collateral Documents, together
with all rents, issues, profits, products and Proceeds thereof.



“Control” shall have the meaning specified in the definition of “Affiliate”.


 


7









 





“Control Collateral” shall mean any Collateral consisting of any Certificated Security
(as defined in Section 8-102 of the Uniform Commercial Code), Investment Property, Deposit Account,
Instruments and any other Collateral as to which a Lien may be perfected through possession or
control by the secured party, or any agent therefor.



“Copyright Licenses” shall mean any written agreement, now or hereafter in effect,
granting any right to any third party under any Copyright now or hereafter owned by any Credit
Party or that such Credit Party otherwise has the right to license, or granting any right to any
Credit Party under any Copyright now or hereafter owned by any third party, and all rights of such
Credit Party under any such agreement.



“Copyrights” shall mean all of the following now owned or hereafter acquired by or
assigned to any Credit Party: (a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee, transferee or otherwise,
whether registered or unregistered and whether published or unpublished, (b) all registrations and
applications for registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending applications for
registration in the United States Copyright Office, and all: (i) rights and privileges arising
under applicable law with respect to such Credit Party’s use of such copyrights, (ii) reissues,
renewals and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with respect thereto, including damages and
payments for past, present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present or future infringements thereof.




“Credit Documents” shall mean the ABL Documents and the Term Documents.




“Credit Parties” shall mean the ABL Credit Parties and the Term Credit Parties.



“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the United States or
other applicable jurisdictions from time to time in effect and affecting the rights of creditors
generally.




“DIP Financing” shall have the meaning set forth in Section 6.1(a).



“Discharge of ABL Obligations” shall mean (a) the payment in full in cash of all
outstanding ABL Obligations excluding contingent indemnity obligations with respect to then
unasserted claims but including (i) with respect to amounts available to be drawn under outstanding
letters of credit issued under any ABL Credit Agreement (or indemnities or other undertakings
issued pursuant thereto in respect of outstanding letters of credit), the cancellation of such
letters of credit or the delivery or provision of cash collateral or backstop letters of credit in
respect thereof in compliance with the terms of any ABL Credit Agreement (including in any event in
compliance with the terms of Section 10.7(b)(i) of the ABL Credit Agreement in order to permit the
release by the ABL Agent of its Liens in the Collateral) (which shall not exceed an amount equal to
105% of the aggregate undrawn amount of such letters of credit) and (ii) with respect to ABL
Hedging Agreements and ABL Cash Management Obligations (or
indemnities or other


 


8









 






undertakings issued pursuant thereto in respect of outstanding ABL Hedging Agreements
and ABL Cash Management Obligations) the termination thereof and payment in full in cash of all ABL
Obligations (other than contingent indemnity obligations with respect to then unasserted claims)
with respect thereto or the delivery or provision of cash collateral in respect thereof in
compliance with the terms of any ABL Credit Agreement or other ABL Document, (b) the termination of
all commitments to extend credit under any of the ABL Documents, (c) the payment in full in cash of
all outstanding obligations the payment of which is guaranteed under any ABL Canadian Credit
Agreement Guaranty and of all outstanding ABL Canadian Secured Obligations excluding contingent
indemnity obligations with respect to then unasserted claims but including (i) with respect to
amounts available to be drawn under outstanding letters of credit issued under the ABL Canadian
Credit Agreement (or indemnities or other undertakings issued pursuant thereto in respect of
outstanding letters of credit), the cancellation of such letters of credit or the delivery or
provision of cash collateral or backstop letters of credit in respect thereof in compliance with
the terms of any ABL Credit Agreement (including in any event in compliance with the terms of
Section 10.7(b)(i) of the ABL Credit Agreement in order to permit the release by the ABL Agent of
its Liens in the Collateral) (which shall not exceed an amount equal to 105% of the aggregate
undrawn amount of such letters of credit) and (ii) with respect to Hedging Contracts (as defined in
the ABL Canadian Credit Agreement) and Cash Management Services, in each instance, the obligations
under or in connection with which constitute ABL Canadian Secured Obligations (or indemnities or
other undertakings issued pursuant thereto in respect thereof), the termination thereof and payment
in full in cash of all ABL Canadian Secured Obligations (other than contingent indemnity
obligations with respect to then unasserted claims) with respect thereto or the delivery or
provision of cash collateral in respect thereof in compliance with the terms of any ABL Credit
Agreement or other ABL Document, and (d) the termination of all commitments to extend credit under
the ABL Canadian Credit Agreement.



“Discharge of Term Obligations” shall mean (i) the payment in full in cash of all
outstanding Term Obligations (other than contingent indemnity obligations with respect to then
unasserted claims) and (ii) with respect to Term Hedging Agreements with any Term Hedging Affiliate
and Term Cash Management Obligations (or indemnities or other undertakings issued pursuant thereto
in respect of outstanding Term Hedging Agreements and Term Cash Management Obligations) the
termination thereof and payment in full in cash of all Term Obligations (other than contingent
indemnity obligations with respect to then unasserted claims) with respect thereto or the delivery
or provision of cash collateral in respect thereof in compliance with the terms of any Term Credit
Agreement.



“Domain Names” shall mean all Internet domain names and associated URL addresses in or
to which any Credit Party now or hereafter has any right, title or interest.



“Enforcement Notice” shall mean a written notice delivered by either the ABL Agent or
the Term Agent to the other announcing that an Enforcement Period has commenced.



“Enforcement Period” shall mean the period of time following the receipt by either the
ABL Agent or the Term Agent of an Enforcement Notice from the other and continuing until the
earliest of (a) in the case of an Enforcement Period commenced by the Term Agent, the Discharge of
Term Obligations, (b) in the case of an Enforcement Period commenced by the
ABL Agent, the Discharge of ABL Obligations, or (c) when the ABL Agent or the Term Agent (as
applicable) terminates, or agrees in writing to terminate, the Enforcement Period.


 


9









 





“Equity Interest” shall mean, with respect to any Person, all of the shares,
interests, rights, participations or other equivalents (however designated) of capital stock of (or
other ownership or profit interests or units in) such Person and all of the warrants, options or
other rights for the purchase, acquisition or exchange from such Person of any of the foregoing
(including through convertible securities).



“Event of Default” shall mean an “Event of Default” or similar term under and as
defined in any ABL Credit Agreement or any Term Credit Agreement, as applicable.



“Exercise of Any Secured Creditor Remedies” or “Exercise of Secured Creditor
Remedies” shall mean, except as otherwise provided in the final sentence of this definition,
any of the following:



(a) the taking by any Secured Party of any action to enforce or realize upon any Lien in any
Collateral, including the institution of any foreclosure proceedings or the noticing of any public
or private sale pursuant to Article 9 of the Uniform Commercial Code or other applicable law;



(b) the exercise by any Secured Party of any right or remedy provided to a secured creditor on
account of a Lien in any Collateral under any of the Credit Documents, under applicable law, in an
Insolvency Proceeding or otherwise, including the election to retain any of the Collateral in
satisfaction of a Lien;



(c) the taking of any action by any Secured Party or the exercise of any right or remedy by
any Secured Party in respect of the collection on, set off against, marshaling of, injunction
respecting or foreclosure on any of the Collateral or the Proceeds thereof;



(d) the appointment on the application of a Secured Party of a receiver, receiver and manager
or interim receiver of all or part of the Collateral;



(e) the sale, lease, license or other disposition of all or any portion of the Collateral by
private or public sale conducted by any Secured Party or any other means at the direction of any
Secured Party permissible under applicable law;



(f) the exercise of any other right of a secured creditor under Part 6 of Article 9 of the
Uniform Commercial Code or under provisions of similar effect under other applicable law; or



(g) the exercise by any Secured Party of any voting rights relating to any Equity Interest
included in the Collateral.


 


10









 





For the avoidance of doubt, none of the following shall be deemed to constitute an Exercise of Any
Secured Creditor Remedies or an Exercise of Secured Creditor Remedies: (i) the filing of a proof
of claim in any Insolvency Proceeding or the seeking of adequate protection in accordance with the
provisions of Article VI hereof, (ii) the exercise of rights by the ABL Agent to direct
payment of proceeds of ABL Priority Collateral (including collections on Accounts) to, or as
instructed by, the ABL Agent or to a Deposit Account, Securities Account or Commodity Account
designated by the ABL Agent, including, without limitation, the notification of account debtors,
depository institutions or any other Person to deliver proceeds of ABL Priority Collateral to the
ABL Agent, and applying any such payments received by the ABL Agent to any ABL Obligations, (iii)
the consent by the ABL Agent or any other ABL Secured Parties to a store closing sale, going out of
business sale or other disposition by any Credit Party of any of the ABL Priority Collateral, (iv)
the reduction of advance rates or sub-limits by the ABL Agent and/or any of the ABL Lenders, (v)
the imposition of reserves (including Availability Reserves, Eligibility Reserves and Dilution
Reserves, as defined in the ABL Credit Agreement) by the ABL Agent, (vi) any changes in eligibility
criteria by the ABL Agent and/or any of the ABL Lenders, or (vii) any other changes to the
Borrowing Base, the Available U.S. Credit or the Available Credit (as such terms are defined in the
ABL Credit Agreement) by the ABL Agent and/or any of the ABL Lenders.



“GAAP” shall mean generally accepted accounting principles in the United States, as in
effect from time to time.



“Governmental Authority” shall mean the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European Central
Bank).




“Guarantor” shall mean any of the ABL Guarantors or Term Guarantors.



“Holdings” shall have the meaning assigned to that term in the recitals to this
Agreement.



“Indebtedness” shall mean (i) all obligations of a Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar
instruments; (ii) the maximum amount of all letters of credit, bankers’ acceptances, bank
guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the
account of such Person; (iii) obligations of such Person under any ABL Hedging Agreement or Term
Hedging Agreement; (iv) indebtedness secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or other title retention agreements
and mortgage, industrial revenue bond, industrial development bond and similar financings), whether
or not such indebtedness shall have been assumed by such Person or is limited in recourse, and (v)
any guarantees of the foregoing.



“Insolvency Proceeding” shall mean (a) any case, action or proceeding before any court
or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement
in respect of a Person’s creditors generally or any substantial portion of a Person’s creditors; in
each case covered by clauses (a) and (b) undertaken under any Debtor Relief Laws.


 


11









 





“Intellectual Property” shall mean all intellectual and similar property of every kind
and nature now owned, licensed or hereafter acquired by any Credit Party that is subject to a
security interest under any ABL Documents and any Term Documents, including inventions, designs,
Patents, Copyrights, Licenses, Trademarks, Domain Names, trade secrets, confidential or proprietary
technical and business information, know how, show how or other data or information, software,
databases, all other proprietary information and all embodiments or fixations thereof and related
documentation and registrations and all additions, improvements and accessions to, and books and
records describing or used in connection with, any of the foregoing.



“Intellectual Property Collateral” shall mean Collateral consisting of Intellectual
Property.




“Lenders” shall mean, collectively, all of the ABL Lenders and the Term Lenders.



“License” shall mean any Patent License, Trademark License, Copyright License, or
other license or sublicense agreement granting rights under Intellectual Property to which any
Credit Party is a party.



“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, deposit
arrangement, encumbrance, collateral assignment, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any Capitalized Lease having substantially the
same economic effect as any of the foregoing); provided that in no event shall an operating lease
in and of itself be deemed a Lien.



“Lien Priority” shall mean with respect to any Lien of the ABL Secured Parties or the
Term Secured Parties in the Collateral, the order of priority of such Lien as specified in Section
2.1.



“Party” shall mean the ABL Agent or the Term Agent, and “Parties” shall mean
both the ABL Agent and the Term Agent.



“Patent License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to develop, commercialize, import, make, have made, offer for
sale, use or sell any invention on which a Patent, now or hereafter owned by any Credit Party or
that any Credit Party otherwise has the right to license, is in existence, or granting to any
Credit Party any such right with respect to any invention on which a Patent, now or hereafter owned
by any third party, is in existence, and all rights of any Credit Party under any such agreement.



“Patents” shall mean all of the following now owned or hereafter acquired by any
Credit Party: (a) all letters patent of the United States or the equivalent thereof in any other
country, all registrations and recordings thereof, and all applications for letters patent of the
United States or the equivalent thereof in any other country, including registrations, recordings
and pending applications in the United States Patent and Trademark Office or any similar offices in
any other country, and (b) all (i) rights and privileges arising under applicable law with respect
to such Credit Party’s use of any patents, (ii) inventions and improvements described and claimed
therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees, royalties, damages, claims
and payments now or hereafter due and/or payable in respect of any of the foregoing, including
damages and payments for past, present or future infringements thereof, (v) rights corresponding
thereto throughout the world and (vi) rights to sue for past, present or future infringements
thereof.


 


12









 





“Person” shall mean any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, Governmental Authority or other entity.



“Priority Collateral” shall mean the ABL Priority Collateral or the Term Priority
Collateral, as applicable.



“Proceeds” shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform
Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when
any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.



“Property” shall mean any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.




“Purchase Date” shall have the meaning set forth in Section 3.8(a).




“Purchase Notice” shall have the meaning set forth in Section 3.8(a).




“Purchase Option Event” shall have the meaning set forth in Section 3.8(a).




“Purchasing Creditors” shall have the meaning set forth in Section 3.8(a).



“Real Property” shall mean any right, title or interest in and to real property,
including any fee interest, leasehold interest, easement, or license and any other right to use or
occupy real property.




“Replacement Agent” shall have the meaning set forth in Section 3.8(d).




“Secured Parties” shall mean the ABL Secured Parties and the Term Secured Parties.



“Subsidiary” of a Person shall mean a corporation, partnership, joint venture, limited
liability company or other business entity (excluding, for the avoidance of doubt, charitable
foundations) of which a majority of the shares of securities or other interests having ordinary
voting power for the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by such Person.



“Term Agent” shall have the meaning assigned to that term in the introduction to this
Agreement and shall include any successor thereto as well as any Person designated as the “Agent”,
“Administrative Agent”, “Collateral Agent”, “Trustee”, “Collateral Trustee” or similar term under
any Term Credit Agreement.


 


13









 





“Term Borrowers” shall have the meaning assigned to that term in the recitals to this
Agreement.



“Term Cash Management Affiliate” shall mean any Term Cash Management Bank that is owed
Term Cash Management Obligations by a Term Credit Party and which Term Cash Management Obligations
are secured by one or more Term Collateral Documents, together with their respective successors,
assigns and transferees.



“Term Cash Management Bank” shall mean any Person that is a Term Lender or an
Affiliate of a Term Lender at the time it provides any Cash Management Services, whether or not
such Person subsequently ceases to be a Term Lender or an Affiliate of a Term Lender.



“Term Cash Management Obligations” shall mean obligations owed by any Term Borrower or
any other Term Credit Party to any Term Cash Management Bank in respect of or in connection with
any Cash Management Services.



“Term Cash Proceeds Notice” shall mean a written notice delivered by the Term Agent to
the ABL Agent (a) stating that an Event of Default has occurred and is continuing under any Term
Document and specifying the relevant Event of Default and (b) stating that certain cash proceeds
which may be deposited in an ABL Deposit and Securities Account constitute Term Priority
Collateral, and reasonably identifying the amount of such proceeds and specifying the origin
thereof.



“Term Collateral Documents” shall mean all “Collateral Documents” or similar term as
defined in any Term Credit Agreement, and all other security agreements, mortgages, deeds of trust
and other collateral documents executed and delivered in connection with any Term Credit Agreement,
in each case as the same may be amended, amended and restated, supplemented, restated, replaced or
otherwise modified from time to time.



“Term Credit Agreement” shall have the meaning assigned to that term in the recitals
to this Agreement and shall include any one or more other agreements, indentures or facilities
extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or
any portion of the Term Obligations, whether by the same or any other agent, trustee, lender, group
of lenders, creditor or group of creditors and whether or not increasing the amount of any
Indebtedness that may be incurred thereunder.



“Term Credit Parties” shall have the meaning assigned to that term in the recitals to
this Agreement.



“Term Documents” shall mean any Term Credit Agreement, any Term Guaranty, any Term
Collateral Document, any agreement regarding Cash Management Services between any Term Borrower or
any other Term Credit Party and any Term Cash Management Affiliate, any Term Hedging Agreements
between any Term Credit Party and any Term Hedging Affiliate, any other ancillary agreement as to
which any Term Secured Party is a party or a beneficiary and all other agreements, instruments,
documents and certificates, now or hereafter executed by or on behalf of any Term Credit Party or
any of its respective Subsidiaries or Affiliates, and delivered to the Term Agent or any other Term
Secured Party, in connection with any of the foregoing or
any Term Credit Agreement, in each case as the same may be amended, amended and restated,
supplemented, restated, replaced or otherwise modified from time to time.


 


14









 





“Term Guarantors” shall mean the collective reference to (i) Holdings and each
Domestic Subsidiary (as defined in the Term Credit Agreement) of Holdings (other than the Term
Borrowers) and (ii) any other Person who becomes a guarantor under any Term Guaranty. The term
“Term Guarantors” shall include all “Guarantors” as defined in the Term Credit Agreement.



“Term Guaranty” shall have the meaning assigned to that term in the recitals to this
Agreement and shall also include any other guaranty made by a Term Guarantor guaranteeing the
payment of any Term Obligations.



“Term Hedge Bank” shall mean any Person that is or was an Agent (as defined in the
Term Credit Agreement) or a Term Lender or an Affiliate of an Agent (as defined in the Term Credit
Agreement) or of a Term Lender.



“Term Hedging Affiliate” shall mean any Term Hedge Bank that has entered into a Term
Hedging Agreement with a Term Credit Party with the obligations of such Term Credit Party
thereunder being secured by one or more Term Collateral Documents, together with their respective
successors, assigns and transferees (even if such Term Hedge Bank subsequently ceases to be an
agent or lender, as applicable, under the Term Credit Agreement for any reason).



“Term Hedging Agreement” shall mean any “Hedging Contract” as defined in the Term
Credit Agreement.



“Term Lenders” shall have the meaning assigned to that term in the introduction to
this Agreement, as well as any Person designated as a “Lender” or similar term under any Term
Credit Agreement.



“Term Loan Priority Accounts” shall mean the Asset Sale Proceeds Pledged Account and
any Deposit Accounts, Securities Accounts or Commodity Accounts, in each case that are intended to
solely contain Term Priority Collateral or identifiable proceeds of the Term Priority Collateral
(it being understood that any property in any of such Asset Sale Proceeds Pledged Account, Deposit
Accounts, Securities Accounts or Commodity Accounts which is not Term Priority Collateral or
identifiable proceeds of Term Priority Collateral shall not be Term Priority Collateral solely by
virtue of being on deposit in any such Asset Sale Proceeds Pledged Account, Deposit Account,
Securities Account or Commodity Account).



“Term Obligations” shall mean any and all obligations of every nature of each Term
Credit Party from time to time owed to the Term Secured Parties or any of them, under, in
connection with, or evidenced or secured by any Term Document, including, without limitation, all
“Obligations,” “Secured Obligations” or similar term as defined in any Term Credit Agreement and
whether for principal, interest, payments for early termination of Term Hedging Agreements, fees,
expenses, indemnification or otherwise, and all other amounts owing or due under the terms of any
Term Document (including interest, fees, expenses and indemnifications which, but for the filing of
a petition in bankruptcy with respect to such Term Credit Party, would have become due or accrued
on any Term Obligation, whether or not a claim is allowed
against such Term Credit Party for such interest, fees, expenses and indemnifications in the
related bankruptcy proceeding), as amended, restated, amended and restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.


 


15









 





“Term Priority Collateral” shall mean all Collateral consisting of the following
(including for the avoidance of doubt, any such assets that, but for the application of Section 552
of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws) would be Term
Priority Collateral):




(1) all Equipment, Fixtures, Real Property, Intellectual Property, intercompany
indebtedness between or among the Credit Parties or their Affiliates, except to the extent
constituting ABL Priority Collateral, and Investment Property (other than any Investment
Property described in any of clauses 3(y), 3(z) and 8 of the definition of ABL Priority
Collateral or otherwise constituting ABL Priority Collateral);




(2) except to the extent constituting ABL Priority Collateral, all Instruments,
Commercial Tort Claims, Documents and General Intangibles;




(3) Term Loan Priority Accounts; provided, however, that to the extent that
identifiable ABL Priority Collateral or proceeds of ABL Priority Collateral are deposited in
any such Term Loan Priority Accounts, such identifiable ABL Priority Collateral or proceeds
shall be treated as ABL Priority Collateral;




(4) all other Collateral, other than the ABL Priority Collateral (including ABL
Priority Proceeds); and




(5) all collateral security and guarantees with respect to the foregoing Term Priority
Collateral, and all cash, Money, insurance proceeds, Instruments, Securities and Financial
Assets received as proceeds of any of the foregoing Term Priority Collateral, but, in any
event, excluding the ABL Priority Collateral (including ABL Priority Proceeds) (such
proceeds, “Term Priority Proceeds”).




“Term Recovery” shall have the meaning set forth in Section 5.3(b).



“Term Secured Parties” shall have the meaning assigned to that term in the
introduction to this Agreement.



“Trademark License” shall mean any written agreement, now or hereafter in effect,
granting to any third party any right to use any Trademark now or hereafter owned by any Credit
Party or that any Credit Party otherwise has the right to license, or granting to any Credit Party
any right to use any Trademark now or hereafter owned by any third party, and all rights of any
Credit Party under any such agreement (not including vendor or distribution agreements that allow
incidental use of intellectual property rights in connection with the sale or distribution of such
products or services).


 


16









 





“Trademarks” shall mean all of the following now owned or hereafter acquired by any
Credit Party: (a) all trademarks, service marks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like nature, the goodwill of the
business symbolized thereby or associated therewith, all registrations and recordings thereof, and
all registration and recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office or any similar
offices in any State of the United States or any other country or any political subdivision
thereof, and all extensions or renewals thereof, (b) any and all rights and privileges arising
under applicable law with respect to such Credit Party’s use of any trademarks, (c) all extensions
and renewals thereof and amendments thereto, (d) all income, fees, royalties, damages and payments
now and hereafter due and/or payable with respect to any of the foregoing, including damages,
claims and payments for past, present or future infringements thereof, (e) all rights corresponding
thereto throughout the world and (f) all rights to sue for past, present and future infringements
or dilution thereof or other injuries thereto.



“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York; provided that, if by reason of mandatory provisions of law,
perfection, or the effect of perfection or non perfection or the priority of a security interest in
any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” means the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non perfection or priority or
availability of such remedy, as the case may be.



“Use Period” shall mean the period commencing on the date that the ABL Agent or an
agent acting on its behalf (or an ABL Credit Party acting with the prior written consent of the ABL
Agent) commences the liquidation and sale of the ABL Priority Collateral in a manner as provided in
Section 3.6 (having theretofore furnished the Term Agent with an Enforcement Notice) and ending 180
days thereafter. If any stay or other order that prohibits any of the ABL Agent, any of the other
ABL Secured Parties or any ABL Credit Party (with the prior written consent of the ABL Agent) from
commencing or continuing to Exercise Any Secured Creditor Remedies or from liquidating and selling
ABL Priority Collateral has been entered by a court of competent jurisdiction or any such Person is
otherwise stayed or prohibited under applicable law from taking any such action, such 180-day
period shall be tolled during the pendency of any such stay or other order or any such other stay
or prohibition and the Use Period shall be so extended.



“Warnaco” shall have the meaning assigned to that term in the recitals to this
Agreement.



Section 1.3 Rules of Construction. Unless the context of this Agreement clearly requires otherwise, references to the plural
include the singular, references to the singular include the plural, the term “including” is not
limiting and shall be deemed to be followed by the phrase “without limitation,” and the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement. Article, section,
subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement to any agreement, instrument, or document shall include
all alterations, amendments, changes, restatements, extensions, modifications, renewals,
replacements, substitutions, joinders,
and supplements thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, restatements, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). Any reference herein to any Person
shall be construed to include such Person’s successors and assigns. Any reference herein to the
repayment in full of an obligation shall mean the payment in full in cash of such obligation, or in
such other manner as may be approved in writing by the requisite holders or representatives in
respect of such obligation.


 


17









 





ARTICLE 2

LIEN PRIORITY




Section 2.1 Priority of Liens.



(a) Notwithstanding (i) the date, time, method, manner, or order of grant, attachment or
perfection (including any defect or deficiency or alleged defect or deficiency in any of the
foregoing) of any Liens granted to the ABL Secured Parties in respect of all or any portion of the
Collateral or of any Liens granted to the Term Secured Parties in respect of all or any portion of
the Collateral and regardless of how any such Lien was acquired (whether by grant, statute,
operation of law, subrogation or otherwise), (ii) the order or time of filing or recordation of any
document or instrument for perfecting the Liens in favor of the ABL Agent or the Term Agent (or ABL
Secured Parties or Term Secured Parties) in any Collateral, (iii) any provision of the Uniform
Commercial Code, Debtor Relief Laws or any other applicable law, or of the ABL Documents or the
Term Documents, (iv) whether the ABL Agent or the Term Agent, in each case, either directly or
through agents, holds possession of, or has control over, all or any part of the Collateral, (v)
the date on which the ABL Obligations or the Term Obligations are advanced or made available to the
Credit Parties, (vi) the fact that any such Liens in favor of the ABL Agent or the ABL Lenders or
the Term Agent or the Term Lenders securing any of the ABL Obligations or Term Obligations,
respectively, are (x) subordinated to any Lien securing any obligation of any Credit Party other
than the Term Obligations or the ABL Obligations, respectively, or (y) otherwise subordinated,
voided, avoided, invalidated or lapsed, or (vii) any other circumstance of any kind or nature
whatsoever, the ABL Agent, on behalf of itself and the ABL Secured Parties, and the Term Agent, on
behalf of itself and the Term Secured Parties, hereby agree that:




(1) any Lien in respect of all or any portion of the ABL Priority Collateral now or
hereafter held by or on behalf of the Term Agent or any Term Secured Party that secures all
or any portion of the Term Obligations shall in all respects be junior and subordinate to
all Liens granted to the ABL Agent or any of the ABL Secured Parties in such ABL Priority
Collateral to secure all or any portion of the ABL Obligations;




(2) any Lien in respect of all or any portion of the ABL Priority Collateral now or
hereafter held by or on behalf of the ABL Agent or any ABL Secured Party that secures all or
any portion of the ABL Obligations shall in all respects be senior and prior to all Liens
granted to the Term Agent or any Term Secured Party in such ABL Priority Collateral to
secure all or any portion of the Term Obligations;


 


18









 






(3) any Lien in respect of all or any portion of the Term Priority Collateral now or
hereafter held by or on behalf of the ABL Agent or any ABL Secured Party that secures all or
any portion of the ABL Obligations shall in all respects be junior and subordinate to all
Liens granted to the Term Agent or any of the Term Secured Parties in such Term Priority
Collateral to secure all or any portion of the Term Obligations; and




(4) any Lien in respect of all or any portion of the Term Priority Collateral now or
hereafter held by or on behalf of the Term Agent or any Term Secured Party that secures all
or any portion of the Term Obligations shall in all respects be senior and prior to all
Liens granted to the ABL Agent or any ABL Secured Party in such Term Priority Collateral to
secure all or any portion of the ABL Obligations.



(b) Notwithstanding any failure by the ABL Agent, any ABL Secured Party, the Term Agent or any
Term Secured Party to perfect its security interests in any of the Collateral or any avoidance,
invalidation, priming or subordination by any third party or court of competent jurisdiction of the
security interests in any of the Collateral granted to the ABL Agent, any of the ABL Secured
Parties, the Term Agent or any of the Term Secured Parties, the priority and rights as between the
ABL Agent and the ABL Secured Parties, on the one hand, and the Term Agent and the Term Secured
Parties, on the other hand, with respect to the Collateral shall be as set forth herein.



(c) The Term Agent, for and on behalf of itself and the Term Secured Parties, acknowledges and
agrees that the ABL Agent, for the benefit of itself and the ABL Secured Parties, has been, or may
be, granted Liens upon all of the Collateral in which the Term Agent has been, or may be, granted
Liens and the Term Agent hereby consents thereto. The ABL Agent, for and on behalf of itself and
the ABL Secured Parties, acknowledges and agrees that, concurrently herewith, the Term Agent, for
the benefit of itself and the Term Secured Parties, has been, or may be, granted Liens upon all of
the Collateral in which the ABL Agent has been granted Liens and the ABL Agent hereby consents
thereto. The subordination of Liens by the Term Agent and the ABL Agent in favor of one another as
set forth herein shall not be deemed to subordinate the Term Agent’s Liens or the ABL Agent’s Liens
to the Liens of any other Person, nor shall such subordination be affected by the subordination of
such Liens to any Lien of any other Person.



(d) For the avoidance of doubt, the Term Agent, for and on behalf of itself and the Term
Secured Parties, acknowledges and agrees that, notwithstanding anything herein to the contrary, any
Liens created under, pursuant to or in connection with the ABL Canadian Credit Agreement (including
in any event any Liens securing any ABL Canadian Secured Obligations) and the exercise of any
rights or remedies with respect thereto are not subject to the terms of this Agreement, other than
those Liens granted by Holdings or any of its Domestic Subsidiaries (as defined in the ABL Credit
Agreement) pursuant to any of the ABL Collateral Documents securing any ABL Canadian Secured
Obligations and the exercise of any rights or remedies with respect thereto. Nothing herein shall
constitute a consent by the ABL Agent or any ABL Secured Party to the grant by any Canadian
Subsidiary of Holdings of any Liens in any of its Property to secure any Term Obligations.


 


19









 





Section 2.2 Waiver of Right to Contest Liens.



(a) The Term Agent, for and on behalf of itself and the Term Secured Parties, agrees that it
and they shall not (and hereby waives any right to) take any action to contest or challenge (or
assist or support any other Person in contesting or challenging), directly or indirectly, whether
or not in any proceeding (including in any Insolvency Proceeding), the validity, priority,
enforceability, or perfection of the Liens of the ABL Agent or any of the ABL Secured Parties in
respect of the Collateral or the provisions of this Agreement. The Term Agent, for itself and on
behalf of the Term Secured Parties, agrees that none of the Term Agent or any of the Term Secured
Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies
undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the
ABL Priority Collateral. The Term Agent, for itself and on behalf of the Term Secured Parties,
hereby waives any and all rights it or any of the Term Secured Parties may have as a junior lien
creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL
Agent or any ABL Secured Party seeks to enforce its Liens in any ABL Priority Collateral. The
foregoing shall not be construed to prohibit the Term Agent from enforcing the provisions of this
Agreement or otherwise acting in accordance with this Agreement.



(b) The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it and
they shall not (and hereby waives any right to) take any action to contest or challenge (or assist
or support any other Person in contesting or challenging), directly or indirectly, whether or not
in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability,
or perfection of the Liens of the Term Agent or any of the Term Secured Parties in respect of the
Collateral or the provisions of this Agreement. Except to the extent expressly set forth in
Section 3.6 of this Agreement, the ABL Agent, for itself and on behalf of the ABL Secured Parties,
agrees that none of the ABL Agent or any of the ABL Secured Parties will take any action that would
interfere with any Exercise of Secured Creditor Remedies undertaken by the Term Agent or any Term
Secured Party under the Term Documents with respect to the Term Priority Collateral. The ABL
Agent, for itself and on behalf of the ABL Secured Parties, hereby waives any and all rights it or
any of the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest,
object to, or interfere with the manner in which the Term Agent or any Term Secured Party seeks to
enforce its Liens in any Term Priority Collateral. The foregoing shall not be construed to
prohibit the ABL Agent from enforcing the provisions of this Agreement or otherwise acting in
accordance with this Agreement.



Section 2.3 Remedies Standstill.



(a) The Term Agent, on behalf of itself and the Term Secured Parties, agrees that, from the
date hereof until the date upon which the Discharge of ABL Obligations shall have occurred, neither
the Term Agent nor any Term Secured Party will Exercise Any Secured Creditor Remedies with respect
to any of the ABL Priority Collateral without the written consent of the ABL Agent, and will not
take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed
that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled
by the Term Agent shall not constitute a breach of this Agreement so long as such Proceeds are
promptly (but in no event later than five Business Days after receipt) remitted to the ABL


 


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Agent.
From and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of
the ABL Agent), the Term Agent or any Term Secured Party may Exercise Any Secured Creditor Remedies
under the Term Documents or applicable law as to any ABL Priority Collateral; provided,
however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by
the Term Agent or any of the Term Secured Parties is at all times subject to the provisions of this
Agreement.



(b) The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, from the date
hereof until the date upon which the Discharge of Term Obligations shall have occurred, neither the
ABL Agent nor any ABL Secured Party will Exercise Any Secured Creditor Remedies with respect to the
Term Priority Collateral without the written consent of the Term Agent, and will not take, receive
or accept any Proceeds of the Term Priority Collateral (except as otherwise expressly permitted
hereunder, including under Section 3.7), it being understood and agreed that (i) the temporary
deposit of Proceeds of Term Priority Collateral in a Deposit Account controlled by the ABL Agent
shall not constitute a breach of this Agreement so long as such Proceeds are promptly (but in no
event later than five Business Days after receipt) remitted to the Term Agent and (ii) the
foregoing shall not prohibit or limit the rights of the ABL Agent or any ABL Secured Party under
Section 3.6. From and after the date upon which the Discharge of Term Obligations shall have
occurred (or prior thereto upon obtaining the written consent of the Term Agent), the ABL Agent or
any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or
applicable law as to any Term Priority Collateral; provided, however, that any
Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Agent or any of the
ABL Secured Parties is at all times subject to the provisions of this Agreement.



(c) Notwithstanding the provisions of Sections 2.3(a), 2.3(b) or any other provision of this
Agreement, nothing contained herein shall be construed to prevent any Agent or any Secured Party
from (i) filing a claim or statement of interest with respect to any of the ABL Obligations or Term
Obligations owed to it in any Insolvency Proceeding commenced by or against any Credit Party, (ii)
taking any action (not adverse to the priority status of the Liens of the other Agent or other
Secured Parties on the Collateral in which such other Agent or other Secured Party has a priority
Lien or the rights of the other Agent or any of the other Secured Parties to Exercise Any Secured
Creditor Remedies in respect thereof) in order to create, perfect, preserve or protect (but not
enforce its Lien) on any Collateral, (iii) filing any necessary or responsive pleadings in
opposition to any motion, adversary proceeding or other pleading filed by any Person objecting to
or otherwise seeking disallowance of the claim or Lien of such Agent or Secured Party or (iv)
voting on any plan of reorganization or filing any proof of claim in any Insolvency Proceeding of
any Credit Party, in each case (i) through (iv) above to the extent not inconsistent with the
express terms of this Agreement.


 


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Section 2.4 Exercise of Rights.



(a) No Other Restrictions. Except as expressly set forth in this Agreement, each
Agent, each Term Secured Party and each ABL Secured Party shall have any and all rights and
remedies it may have as a creditor under applicable law, including the right to the Exercise of
Secured Creditor Remedies; provided, however, that the Exercise of Secured Creditor
Remedies with respect to the Collateral shall be subject to the Lien Priority and to the provisions
of this Agreement. The ABL Agent may enforce the provisions of the ABL Documents, the Term
Agent may enforce the provisions of the Term Documents and each may Exercise Any Secured Creditor
Remedies, all in such order and in such manner as each may determine in the exercise of its sole
discretion, consistent with the terms of this Agreement and mandatory provisions of applicable law;
provided, however, that each of the ABL Agent and the Term Agent agrees to provide
to the other (x) an Enforcement Notice prior to the commencement of an Exercise of Any Secured
Creditor Remedies and (y) copies of any notices that it is required under applicable law to deliver
to any Credit Party; provided further, however, that the ABL Agent’s
failure to provide the Enforcement Notice (other than in connection with Section 3.6) or any such
copies to the Term Agent shall not impair any of the ABL Agent’s rights hereunder or under any of
the ABL Documents and the Term Agent’s failure to provide the Enforcement Notice or any such copies
to the ABL Agent shall not impair any of the Term Agent’s rights hereunder or under any of the Term
Documents. Each of the Term Agent, each Term Secured Party, the ABL Agent and each ABL Secured
Party agrees that it will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim, in the case of the Term Agent and each Term
Secured Party, against either the ABL Agent or any other ABL Secured Party, and in the case of the
ABL Agent and each ABL Secured Party, against either the Term Agent or any other Term Secured
Party, seeking damages from or other relief by way of specific performance, instructions or
otherwise, with respect to any action taken or omitted to be taken by such Person with respect to
any of the Collateral which is consistent with the terms of this Agreement, and none of such
Parties shall be liable for any such action taken or omitted to be taken.



(b) Unsecured Creditor Rights; Insolvency Proceedings. None of the ABL Agent, any
other ABL Secured Party, the Term Agent or any other Term Secured Party shall be a petitioning
creditor or otherwise assist in the filing of an involuntary Insolvency Proceeding against any
Credit Party.




(c) Release of Liens.



(i) In the event of (A) any private or public sale of all or any portion of the ABL Priority
Collateral in connection with any Exercise of Secured Creditor Remedies by, or with the consent of,
the ABL Agent, or (B) any sale, transfer or other disposition of all or any portion of the ABL
Priority Collateral, so long as such sale, transfer or other disposition under this clause (B) is
then permitted by the ABL Documents or consented to by the requisite ABL Lenders (and additionally,
with respect to a sale, transfer or other disposition under this clause (B) of ABL Priority
Collateral by a Credit Party not in the ordinary course of business of such Credit Party, to the
extent such sale, transfer or other disposition is then permitted by the Term Documents or
consented to by the requisite Term Lenders), irrespective of whether an Event of Default has
occurred, the Term Agent agrees, on behalf of itself and the Term Secured Parties that, so long as
the Term Agent, for the benefit of the Term Secured Parties, shall retain a Lien on the proceeds of
such sale, transfer or other disposition under clause (A) or (B) above (to the extent that such
proceeds are not applied to any ABL Obligations (as provided in Section 4.1(b) hereof in the case
of a sale under clause (A) above)), such sale, transfer or other disposition will be free and clear
of the Liens on such ABL Priority Collateral (but not the proceeds thereof to the extent that such
proceeds are not applied to any ABL Obligations) securing the Term Obligations, and the Term
Agent’s and the Term Secured Parties’ Liens with


 


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respect
to the ABL Priority Collateral (but not the proceeds thereof to the extent that such proceeds are not
applied to any ABL Obligations) so sold, transferred, or disposed shall terminate and be
automatically released without further action concurrently with, and to the same extent as, the
release of the ABL Secured Parties’ Liens on such ABL Priority Collateral. In furtherance of, and
subject to, the foregoing, the Term Agent agrees that it will promptly execute any and all Lien
releases or other documents reasonably requested by the ABL Agent in connection therewith. The
Term Agent hereby appoints the ABL Agent and any officer or duly authorized person of the ABL
Agent, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power of attorney in the place and stead of the Term Agent and in the name of the Term
Agent or in the ABL Agent’s own name, from time to time, in the ABL Agent’s sole discretion, for
the purposes of carrying out the terms of this paragraph, to take any and all appropriate action
and to execute and deliver any and all documents and instruments as may be necessary or desirable
to accomplish the purposes of this paragraph, including any financing statements, endorsements,
assignments, releases or other documents or instruments of transfer (which appointment, being
coupled with an interest, is irrevocable).



(ii) In the event of (A) any private or public sale of all or any portion of the Term Priority
Collateral in connection with any Exercise of Secured Creditor Remedies by, or with the consent of,
the Term Agent, or (B) any sale, transfer or other disposition of all or any portion of the Term
Priority Collateral, so long as such sale, transfer or other disposition under this clause (B) is
then permitted by the Term Documents or consented to by the requisite Term Lenders (and
additionally, with respect to a sale, transfer or other disposition under this clause (B) of Term
Priority Collateral by a Credit Party not in the ordinary course of business of such Credit Party,
to the extent such sale, transfer or other disposition is then permitted by the ABL Documents or
consented to by the requisite ABL Lenders), irrespective of whether an Event of Default has
occurred, the ABL Agent agrees, on behalf of itself and the ABL Secured Parties that, so long as
the ABL Agent, for the benefit of the ABL Secured Parties, shall retain a Lien on the proceeds of
such sale, transfer or other disposition under clause (A) or (B) above (to the extent that such
proceeds are not applied to any Term Obligations (as provided in Section 4.1(c) hereof in the case
of a sale under clause (A) above)) and such sale, transfer or other disposition is not prohibited
under Section 3.6, such sale, transfer or other disposition will be free and clear of the Liens on
such Term Priority Collateral (but not the proceeds thereof to the extent that such proceeds are
not applied to any Term Obligations) securing the ABL Obligations and the ABL Agent’s and the ABL
Secured Parties’ Liens with respect to the Term Priority Collateral (but not the proceeds thereof
to the extent that such proceeds are not applied to any Term Obligations) so sold, transferred, or
disposed shall terminate and be automatically released without further action concurrently with,
and to the same extent as, the release of the Term Secured Parties’ Liens on such Term Priority
Collateral. In furtherance of, and subject to, the foregoing, the ABL Agent agrees that it will
promptly execute any and all Lien releases or other documents reasonably requested by the Term
Agent in connection therewith. The ABL Agent hereby appoints the Term Agent and any officer or
duly authorized person of the Term Agent, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power of attorney in the place and stead of the ABL Agent
and in the name of the ABL Agent or in the Term Agent’s own name, from time to time, in the Term
Agent’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any
and all appropriate action and to execute and deliver any and all documents and instruments as may
be necessary or desirable to accomplish the purposes of this paragraph, including any financing



 


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statements,
endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being
coupled with an interest, is irrevocable). For the avoidance of doubt and notwithstanding anything
herein to the contrary, the Term Agent acknowledges and agrees, on behalf of itself and the Term
Secured Parties, that if any sale, transfer or other disposition under clause (A) or (B) of the
first sentence of this Section 2.4(c)(ii) shall be with respect to any Equity Interests in any
Person, neither the ABL Agent nor any ABL Secured Party shall have any obligation to terminate or
release any Lien (and no such Lien is hereby terminated or released) it may have in (x) any ABL
Priority Collateral of such Person or (y) except to the extent that the Term Agent and the Term
Secured Parties concurrently terminate and release their Liens in Term Priority Collateral of such
Person and otherwise comply with this Section 2.4(c)(ii) with respect to such Term Priority
Collateral of such Person, any Term Priority Collateral of such Person.



Section 2.5 No New Liens.



(a) It is the anticipation of the parties that, until the date upon which the Discharge of ABL
Obligations shall have occurred, no Term Secured Party shall acquire or hold any Lien on any assets
securing any Term Obligation which assets are not also subject to the Lien of the ABL Agent under
the ABL Documents. Subject to clause (c) below, if any Term Secured Party shall nonetheless
acquire or hold any Lien on any assets of any Credit Party securing any Term Obligation which
assets are not also subject to the Lien of the ABL Agent under the ABL Documents, then the Term
Agent (or the relevant Term Secured Party) shall, without the need for any further consent of any
other Term Secured Party, any Term Borrower or any Term Guarantor and notwithstanding anything to
the contrary in any other Term Document, be deemed to also hold and have held such Lien as agent or
bailee for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien
Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the
existence of such Lien upon becoming aware thereof.



(b) It is the anticipation of the parties that, until the date upon which the Discharge of
Term Obligations shall have occurred, no ABL Secured Party shall acquire or hold any Lien on any
assets securing any ABL Obligation which assets are not also subject to the Lien of the Term Agent
under the Term Documents. Subject to clause (c) below, if any ABL Secured Party shall nonetheless
acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation which assets
are not also subject to the Lien of the Term Agent under the Term Documents, then the ABL Agent (or
the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL
Secured Party, the ABL US Borrower or any ABL Guarantor and notwithstanding anything to the
contrary in any other ABL Document, be deemed to also hold and have held such Lien as agent or
bailee for the benefit of the Term Agent as security for the Term Obligations (subject to the Lien
Priority and other terms hereof) and shall promptly notify the Term Agent in writing of the
existence of such Lien upon becoming aware thereof. This Section 2.5(b) is in all respects subject
to Section 2.1(d).


 


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(c) Notwithstanding the foregoing under this Section 2.5:




(i) clause (a) shall not be applicable with respect to any asset of any Credit Party
for which a Lien in such asset in favor of the ABL Agent is expressly not required pursuant
to the terms of the ABL Credit Agreement or any ABL Collateral Document
(whether such asset or type of asset is expressly excluded from being collateral for
the ABL Obligations or such asset does not meet any minimum value or similar threshold for
inclusion as collateral for the ABL Obligations or otherwise); and




(ii) clause (b) shall not be applicable with respect to any asset of any Credit Party
for which a Lien in such asset in favor of the Term Agent is expressly not required pursuant
to the terms of the Term Credit Agreement or any Term Collateral Document (whether such
asset or type of asset is expressly excluded from being collateral for the Term Obligations
or such asset does not meet any minimum value or similar threshold for inclusion as
collateral for the Term Obligations or otherwise).



Section 2.6 Waiver of Marshalling.



(a) Until the Discharge of ABL Obligations, the Term Agent, on behalf of itself and the Term
Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law,
any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any
marshalling, appraisal, valuation or other similar right that may otherwise be available under
applicable law with respect to the ABL Priority Collateral or any other similar rights a junior
secured creditor may have under applicable law.



(b) Until the Discharge of Term Obligations, the ABL Agent, on behalf of itself and the ABL
Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law,
any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any
marshalling, appraisal, valuation or other similar right that may otherwise be available under
applicable law with respect to the Term Priority Collateral or any other similar rights a junior
secured creditor may have under applicable law.



ARTICLE 3

ACTIONS OF THE PARTIES




Section 3.1 Certain Actions Permitted. The Term Agent and the ABL Agent may make such demands or file such claims in respect of the
Term Obligations or the ABL Obligations, as applicable, as are necessary to prevent the waiver or
bar of such claims under applicable statutes of limitations or other statutes, court orders, or
rules of procedure at any time. Nothing in this Agreement shall prohibit the receipt by the Term
Agent or any Term Secured Party of the required payments of interest, principal and other amounts
owed in respect of the Term Obligations so long as such receipt is not the direct or indirect
result of the exercise by the Term Agent or any Term Secured Party of rights or remedies as a
secured creditor (including set-off) with respect to ABL Priority Collateral or enforcement in
contravention of this Agreement of any Lien held by any of them. Nothing in this Agreement shall
prohibit the receipt by the ABL Agent or any ABL Secured Party of the required payments of
interest, principal and other amounts owed in respect of the ABL Obligations so long as such
receipt is not the direct or indirect result of the exercise by the ABL Agent or any ABL Secured
Party of rights or remedies as a secured creditor (including set-off) with respect to Term Priority
Collateral or enforcement in contravention of this Agreement of any Lien held by any of them. None
of the Term Agent, Term Secured Parties, ABL Agent or ABL Secured Parties shall take any other
action in connection with the Term Obligations or the ABL Obligations in contravention of the terms
of this Agreement (including if for any reason such party is deemed an unsecured or undersecured
creditor with respect to such Term Obligations or ABL Obligations, as applicable).


 


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Section 3.2 Agent for Perfection. The ABL Agent, for and on behalf of itself and each ABL Secured Party, and the Term Agent, for
and on behalf of itself and each Term Secured Party, as applicable, each agree to hold all
Collateral in their respective possession, custody, or control (including as defined in Sections
9-104, 9-105, 9-106, 9-107 and 8-106 of the UCC) (or in the possession, custody, or control of
agents or bailees for either) as gratuitous bailee for the other solely for the purpose of
perfecting the security interest granted to each in such Collateral, subject to the terms and
conditions of this Section 3.2. Solely with respect to any Control Collateral under the control
(within the meaning of Section 9-104 of the UCC) of the ABL Agent or the Term Agent, the ABL Agent
and the Term Agent, respectively, agrees to also hold control over such Control Collateral as
gratuitous agent for the Term Secured Parties and the ABL Secured Parties, subject to the terms and
conditions of this Section 3.2. In furtherance of the foregoing, each Credit Party hereby grants a
security interest in the Control Collateral of such Credit Party to (x) the ABL Agent for the
benefit of the Term Secured Parties (and the ABL Agent agrees that it will hold such Lien (subject
to the limitations contained herein) for the benefit of the Term Secured Parties, but in any event
no Term Secured Party shall become an ABL Secured Party by virtue of such grant to or agreement of
the ABL Agent, the Control Collateral shall remain subject to the Lien Priority as if such security
interest were not granted to the ABL Agent for the benefit of the Term Secured Parties and the ABL
Agent shall have no obligation or liability whatsoever to any of the Term Secured Parties by virtue
of such grant to or agreement of the ABL Agent) and (y) the Term Agent for the benefit of the ABL
Secured Parties (and the Term Agent agrees that it will hold such Lien (subject to the limitations
contained herein) for the benefit of the ABL Secured Parties, but in any event no ABL Secured Party
shall become a Term Secured Party by virtue of such grant to or agreement of the Term Agent, the
Control Collateral shall remain subject to the Lien Priority as if such security interest were not
granted to the Term Agent for the benefit of the ABL Secured Parties and the Term Agent shall have
no obligation or liability whatsoever to any of the ABL Secured Parties by virtue of such grant to
or agreement of the ABL Agent). None of the ABL Agent, the ABL Secured Parties, the Term Agent, or
the Term Secured Parties, as applicable, shall have any obligation whatsoever to the others to
assure that the Collateral is genuine or owned by any Borrower, any Guarantor, or any other Person
or to preserve rights or benefits of any Person. The duties or responsibilities of the ABL Agent
and the Term Agent under this Section 3.2 are and shall be limited solely to holding or maintaining
control of the Control Collateral as gratuitous bailee for the other Party for purposes of
perfecting the Lien held by the Term Agent or the ABL Agent, as applicable. The ABL Agent is not
and shall not be deemed to be a fiduciary of any kind for the Term Secured Parties or any other
Person. Without limiting the generality of the foregoing, except as expressly provided herein, the
ABL Secured Parties shall not be obligated to see to the application of any Proceeds of the Term
Priority Collateral deposited into any Deposit Account or be answerable in any way for the
misapplication thereof. The Term Agent is not and shall not be deemed to be a fiduciary of any
kind for the ABL Secured Parties or any other Person. Without limiting the generality of the
foregoing, except as expressly provided herein, the Term Secured Parties shall not be obligated to
see to the application of any Proceeds of the ABL Priority Collateral deposited into any Deposit
Account or be answerable in any way for the misapplication thereof. In addition, the Term Agent,
on behalf of the Term Secured Parties, hereby agrees and acknowledges that other than with respect
to ABL Priority Collateral that may
be perfected through the filing of a UCC financing statement, the ABL Agent’s Liens may be
perfected on certain items of ABL Priority Collateral with respect to which the Term Agent’s Liens
would not be perfected but for the provisions of this Section 3.2, and the Term Agent, on behalf of
the Term Secured Parties, hereby further agrees that the foregoing described in this sentence shall
not be deemed a breach of this Agreement.


 


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Section 3.3 Sharing of Information and Access. In the event that the ABL Agent shall, in the exercise of its rights under the ABL Collateral
Documents or otherwise, receive possession or control of any books and records of any Term Credit
Party which contain information identifying or pertaining to the Term Priority Collateral, the ABL
Agent shall, upon reasonable request from the Term Agent and as promptly as practicable thereafter,
either make available to the Term Agent such books and records for inspection and duplication or
provide to the Term Agent copies thereof. In the event that the Term Agent shall, in the exercise
of its rights under the Term Collateral Documents or otherwise, receive possession or control of
any books and records of any ABL Credit Party which contain information identifying or pertaining
to any of the ABL Priority Collateral, the Term Agent shall, upon reasonable request from the ABL
Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books
and records for inspection and duplication or provide the ABL Agent copies thereof.



Section 3.4 Insurance. Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern
the ultimate disposition of casualty insurance proceeds. The ABL Agent and the Term Agent shall
each be named as additional insured or loss payee, as applicable, with respect to all insurance
policies relating to the Collateral as set forth in the Term Credit Agreement or the ABL Credit
Agreement, as applicable. The ABL Agent shall have the sole and exclusive right, as against the
Term Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or
destruction of ABL Priority Collateral. The Term Agent shall have the sole and exclusive right, as
against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss,
theft or destruction of Term Priority Collateral. If any insurance claim includes both ABL
Priority Collateral and Term Priority Collateral, the insurer will not settle such claim separately
with respect to ABL Priority Collateral and Term Priority Collateral, and if the Parties are unable
after negotiating in good faith to agree on the settlement for such claim, either Party may apply
to a court of competent jurisdiction to make a determination as to the settlement of such claim,
and the court’s determination shall be binding upon the Parties. All proceeds of such insurance
shall be remitted to the ABL Agent or the Term Agent, as the case may be, subject, in each case, to
the terms of their respective Credit Documents, and each of the Term Agent and ABL Agent shall
cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in
accordance with Section 4.1 hereof.



Section 3.5 No Additional Rights For the Credit Parties Hereunder. If any ABL Secured Party or Term Secured Party shall enforce its rights or remedies in violation
of the terms of this Agreement, the Credit Parties shall not be entitled to use such violation as a
defense to any action by any ABL Secured Party or Term Secured Party, nor to assert such violation
as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Secured
Party.


 


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Section 3.6 Inspection and Access Rights.



(a) Without limiting any rights the ABL Agent or any other ABL Secured Party may otherwise
have under applicable law or by agreement, in the event of any liquidation of ABL Priority
Collateral (or any other Exercise of Any Secured Creditor Remedies by the ABL Agent) and whether or
not the Term Agent or any other Term Secured Party has commenced and/or is continuing to Exercise
Any Secured Creditor Remedies with respect to Term Priority Collateral or otherwise, the ABL Agent
or any other Person (including any ABL Credit Party) acting with the prior written consent, or on
behalf, of the ABL Agent, shall have the irrevocable right (a) during the Use Period during normal
business hours on any Business Day, to access ABL Priority Collateral that (i) is stored or located
in or on, (ii) has become an accession with respect to (within the meaning of Section 9-335 of the
Uniform Commercial Code), or (iii) has been commingled with (within the meaning of Section 9-336 of
the Uniform Commercial Code) Term Priority Collateral, and (b) during the Use Period, to use the
Term Priority Collateral (including, without limitation, Equipment, Fixtures, Intellectual
Property, General Intangibles and Real Property) on a rent-free, royalty-free basis, each of the
foregoing solely for the limited purposes of assembling, inspecting, copying or downloading
information relating to or stored on, taking actions to perfect its Lien on, completing Inventory
involving, taking possession of, moving, preparing and advertising for sale, selling (by public
auction, private sale or a “store closing”, “going out of business” or similar sale or by any other
sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and
which sale may include augmented Inventory of the same type sold in any ABL Credit Party’s
business), storing or otherwise dealing with the ABL Priority Collateral, in each case without
notice to, the involvement of or interference by any Term Secured Party or liability to any Term
Secured Party; provided, however, that the expiration of the Use Period shall be
without prejudice to the sale or other disposition of the ABL Priority Collateral in accordance
with this Agreement and applicable law. In the event that any ABL Secured Party has commenced
and/or is continuing the Exercise of Any Secured Creditor Remedies with respect to any ABL Priority
Collateral or any other sale or liquidation of any ABL Priority Collateral has been commenced by
the ABL Agent or an ABL Credit Party (with the consent of the ABL Agent), the Term Agent may not
sell, assign or otherwise transfer the related Term Priority Collateral prior to the expiration of
the Use Period, unless the purchaser, assignee or transferee thereof agrees in writing to be bound
by the provisions of this Section 3.6.



(b) During the period of actual occupation, use and/or control by the ABL Secured Parties
and/or the ABL Agent (or their respective employees, agents, advisers and representatives) of any
Term Priority Collateral, the ABL Secured Parties and the ABL Agent shall be obligated to repair at
their expense any physical damage (but not any diminution in value) to such Term Priority
Collateral resulting from such occupancy, use or control, and to leave such Term Priority
Collateral in substantially the same condition as it was at the commencement of such occupancy, use
or control, ordinary wear and tear excepted. Notwithstanding the foregoing, in no event shall the
ABL Secured Parties or the ABL Agent have any liability to the Term Secured Parties and/or to the
Term Agent pursuant to this Section 3.6 as a result of any condition (including any environmental
condition, claim or liability) on or with respect to any Term Priority Collateral existing prior to
the date of the exercise by the ABL Secured Parties (or the ABL Agent or any of the Credit Parties
with the prior written consent of the ABL Agent, as the case may be) of their rights under Section
3.6 and the ABL


 


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Secured
Parties and the ABL Agent shall have no duty or liability to maintain any Term Priority
Collateral in a condition or manner better than that in which it was maintained prior to the use
thereof by the ABL Secured Parties (or the ABL Agent or any of the Credit Parties with the prior
written consent of the ABL Agent, as the case may be), or for any diminution in the value of any
Term Priority Collateral that results from ordinary wear and tear resulting from the use of any
Term Priority Collateral by the ABL Secured Parties (or the ABL Agent or any of the Credit Parties
with the consent of the ABL Agent, as the case may be) in the manner and for the time periods
specified under this Section 3.6. Without limiting the rights granted in this Section 3.6, the ABL
Secured Parties and the ABL Agent shall cooperate with the Term Secured Parties and/or the Term
Agent in connection with any efforts made by the Term Secured Parties and/or the Term Agent to sell
the Term Priority Collateral.



(c) The ABL Agent and the ABL Secured Parties shall not be obligated to pay any amounts to the
Term Agent or any of the Term Secured Parties (or any person claiming by, through or under any of
the Term Secured Parties, including any purchaser of any Term Priority Collateral) or to any of the
ABL Credit Parties, for or in respect of the use by the ABL Agent and/or any of the ABL Secured
Parties of any Term Priority Collateral.



(d) The ABL Secured Parties shall (i) use the Term Priority Collateral in accordance with
applicable law; (ii) insure for damage to property and liability to persons, including property and
liability insurance for the benefit of the Term Secured Parties; and (iii) reimburse the Term
Secured Parties for any injury or damage to Persons or property (ordinary wear-and-tear excepted)
caused by the acts or omissions of Persons under their control arising from the gross negligence or
willful misconduct of any such Person; provided, however, that the ABL Secured
Parties will not be liable for any diminution in the value of any Term Priority Collateral caused
by the absence of any ABL Priority Collateral therefrom.



(e) The Term Agent and the other Term Secured Parties shall use commercially reasonable
efforts to not hinder or obstruct the ABL Agent and the other ABL Secured Parties from exercising
the rights described in Section 3.6(a) hereof.



(f) Subject to the terms hereof, the Term Agent may advertise and conduct public auctions or
private sales of the Term Priority Collateral without notice (except as required by applicable law
or after its receipt of an Enforcement Notice from the ABL Agent or its sending of an Enforcement
Notice to the ABL Agent or the acceleration of any Term Obligations or as otherwise required by
this Agreement) to any ABL Secured Party, the involvement of or interference by any ABL Secured
Party or liability to any ABL Secured Party as long as, in the case of an actual sale, (x) the
respective purchaser assumes and agrees in writing to the obligations of the Term Agent and the
Term Secured Parties under this Section 3.6 and (y) if such sale is to occur prior to the
commencement of the Use Period, the Term Agent has provided the ABL Agent with not less than 10
Business Days prior written notice of such sale.


 


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(g) In furtherance of the foregoing in this Section 3.6, the Term Agent, in its capacity as a
secured party (or as a purchaser, assignee or transferee, as applicable), and to the extent of its
interest therein, hereby grants to the ABL Agent an exclusive, irrevocable, royalty-free, worldwide
license to use, license or sublicense any and all Intellectual Property now owned or hereafter
acquired by, or now licensed or hereafter licensed to, any of the Credit Parties
(except to the extent such grant is prohibited by any rule of law, statute or regulation)
included as part of the Term Priority Collateral (and including in such license access to all media
in which any of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof) as is or may be necessary or advisable in
the ABL Agent’s reasonable judgment for the ABL Agent to process, ship, produce, store, supply,
lease, complete, sell, liquidate or otherwise deal with any of the ABL Priority Collateral, or to
collect or otherwise realize upon any Accounts (as defined in the ABL Credit Agreement) comprising
ABL Priority Collateral, in each case solely in connection with any Exercise of Secured Creditor
Remedies; provided that (i) any such license shall terminate upon the sale of the applicable ABL
Priority Collateral (as to such sold ABL Priority Collateral) and shall not extend or transfer to
the purchaser of such ABL Priority Collateral (it being understood and agreed that nothing in this
clause (i) shall prevent or restrict any such purchaser from further selling any such ABL Priority
Collateral with any brand, trademark, trade name or other Intellectual Property contained on or in
any such ABL Priority Collateral or from advertising any such ABL Priority Collateral referring to,
labeled with or otherwise displaying such brand, trademark, tradename or other Intellectual
Property), (ii) the ABL Agent’s use of such Intellectual Property shall be reasonable and lawful,
and (iii) any such license is granted on an “AS IS” basis, without any representation or warranty
whatsoever. The Term Agent (i) acknowledges and consents to the grant to the ABL Agent by any of
the Credit Parties of any license with respect to any Intellectual Property pursuant to any ABL
Document and (ii) agrees that its Liens in the Term Priority Collateral shall be subject in all
respects to any such license. Furthermore, the Term Agent agrees that, in connection with any
Exercise of Secured Creditor Remedies conducted by the Term Agent in respect of Term Priority
Collateral, (x) any notice required to be given by the Term Agent in connection with such Exercise
of Secured Creditor Remedies shall contain an acknowledgement of the existence of such license and
(y) the Term Agent shall provide written notice to any purchaser, assignee or transferee pursuant
to an Exercise of Secured Creditor Remedies that the applicable assets are subject to such license.



Section 3.7 Tracing of and Priorities in Proceeds. The ABL Agent, for itself and on behalf of the ABL Secured Parties, and the Term Agent, for
itself and on behalf of the Term Secured Parties, further agree that prior to an issuance of any
notice of Exercise of Any Secured Creditor Remedies by such Secured Party (unless a bankruptcy or
insolvency Event of Default then exists), any proceeds of Collateral, whether or not deposited
under control agreements, which are used by any Credit Party to acquire other property which is
Collateral shall not (solely as between the Agents and the other Secured Parties) be treated as
Proceeds of Collateral for purposes of determining the relative priorities in the Collateral which
was so acquired. In addition, unless and until the Discharge of the ABL Obligations occurs, the
Term Agent and the other Term Secured Parties each consents and agrees to the application, prior to
the giving in accordance with Section 7.5 of a Term Cash Proceeds Notice to the ABL Agent with
respect thereto, of cash or other proceeds of Term Priority Collateral deposited under control
agreements or otherwise deposited in a Deposit Account, Securities Account or Commodity Account
(other than any cash held in Term Loan Priority Accounts) to the repayment of the ABL Obligations
pursuant to the ABL Documents (and any cash or other proceeds of Term Priority Collateral deposited
under any control agreement or otherwise deposited in a Deposit Account, Securities Account or
Commodity Account (other than any such cash held in Term Loan Priority Accounts) prior to the
giving in accordance with Section 7.5 of a Term Cash Proceeds Notice to the ABL Agent with respect
to such cash or other proceeds of Term Priority Collateral shall no longer
constitute Term Priority Collateral or proceeds thereof but shall constitute ABL Priority
Collateral).


 


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Section 3.8 Purchase Right.



(a) If (i) after the occurrence of an Event of Default, the ABL Agent shall sell, lease,
license or dispose of all or substantially all of the ABL Priority Collateral by private or public
sale, (ii) an Insolvency Proceeding with respect to Warnaco or Holdings shall have occurred or
shall have been commenced, or (iii) the ABL Obligations under the ABL Credit Agreement shall have
been accelerated (including as a result of any automatic acceleration) or shall remain unpaid
following the Revolving Loan Maturity Date (as defined in the ABL Credit Agreement) (each such
event described in clauses (i) through (iii) herein above, a “Purchase Option Event”), the
Term Secured Parties shall have the opportunity to purchase (at par and without premium) all (but
not less than all) of the ABL Obligations pursuant to this Section 3.8; provided, that such option
shall expire if the applicable Term Secured Parties fail to deliver a written notice (a
“Purchase Notice”) to the ABL Agent with a copy to Warnaco within ten (10) Business Days
following the first date the Term Agent obtains actual knowledge of the occurrence of the earliest
Purchase Option Event, which Purchase Notice shall (A) be signed by the applicable Term Secured
Parties committing to such purchase (the “Purchasing Creditors”) and indicate the
percentage of the ABL Obligations to be purchased by each Purchasing Creditor (which aggregate
commitments must add up to 100% of the ABL Obligations) and (B) state that (1) it is a Purchase
Notice delivered pursuant to Section 3.8 of this Agreement and (2) the offer contained therein is
irrevocable. Upon receipt of such Purchase Notice by the ABL Agent, the Purchasing Creditors shall
have from the date of delivery thereof to and including the date that is ten (10) Business Days
after the Purchase Notice was received by the ABL Agent to purchase all (but not less than all) of
the ABL Obligations pursuant to this Section 3.8 (the date of such purchase, the “Purchase
Date”).



(b) On the Purchase Date, the ABL Agent and the other ABL Secured Parties shall, subject to
any required approval of any Governmental Authority and any limitation in the ABL Credit Agreement
or any other ABL Document, in each case then in effect, if any, sell to the Purchasing Creditors
all (but not less than all) of the ABL Obligations. On the Purchase Date, the Purchasing Creditors
shall (i) pay to the ABL Agent, for the benefit of the ABL Secured Parties, as directed by the ABL
Agent, in immediately available funds (x) the full amount in the relevant currencies (at par and
without premium) of all ABL Obligations then outstanding together with all accrued and unpaid
interest and fees thereon, all in the amounts specified by the ABL Agent and determined in
accordance with the applicable ABL Documents and (y) without duplication of clause (x), the full
amount in the relevant currencies (at par and without premium) of all ABL Canadian Secured
Obligations then outstanding together with all accrued and unpaid interest and fees thereon, all in
the amounts specified by the ABL Agent and determined in accordance with the ABL Canadian Credit
Agreement or other applicable document governing or evidencing any such ABL Canadian Secured
Obligations, (ii) furnish such amount of cash collateral in immediately available funds as the ABL
Agent determines is reasonably necessary to secure ABL Secured Parties in connection with any (w)
indemnification obligations of the ABL Credit Parties under the ABL Documents, (x) ABL Cash
Management Obligations and ABL Obligations under or in connection with ABL Hedging Agreements, (y)
issued and outstanding


 


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letters
of credit issued under the ABL Credit Agreement but, with respect to this clause (y), not in any event in an amount greater than 105% of the aggregate undrawn
amount of all such outstanding letters of credit and (z) contingent guarantee obligations under any
ABL Canadian Credit Agreement Guaranty and any other contingent obligations constituting ABL
Canadian Secured Obligations, which amount in the case of this clause (z) with respect to
contingent guarantee obligations under any ABL Canadian Credit Agreement Guaranty shall be the
maximum amount of contingent guarantee obligations payable thereunder as determined by the ABL
Agent, but with respect to guarantee obligations relating to issued and outstanding letters of
credit issued under the ABL Canadian Credit Agreement shall not in any event be in an amount
greater than 105% of the aggregate undrawn amount of all such outstanding letters of credit (and in
the case of clauses (w), (x), (y) and (z) herein above, any excess of such cash collateral for such
indemnification obligations, ABL Cash Management Obligations and ABL Obligations under or in
connection with ABL Hedging Agreements, letters of credit, contingent guarantee obligations under
any ABL Canadian Credit Agreement Guaranty or any other contingent obligations constituting ABL
Canadian Secured Obligations remaining at such time when there are no longer any such
indemnification obligations, ABL Cash Management Obligations and ABL Obligations under or in
connection with ABL Hedging Agreements, letters of credit outstanding, ABL Canadian Credit
Agreement Guaranties or any ABL Canadian Secured Obligations and there are no unreimbursed amounts
then owing in respect of such indemnification obligations, ABL Cash Management Obligations and ABL
Obligations under or in connection with ABL Hedging Agreements, drawings under such letters of
credit, any ABL Canadian Credit Agreement Guaranties or any ABL Canadian Secured Obligations shall
be promptly paid over to the Term Agent) and (iii) agree to reimburse the ABL Secured Parties for
any loss, cost, damage or expense (A) resulting from the granting of provisional credit for any
checks, wire or ACH transfers that are reversed or not final or other payments provisionally
credited to any of the ABL Obligations under the ABL Credit Agreement, any other ABL Document or
the ABL Canadian Credit Agreement or any other document governing or evidencing any ABL Canadian
Secured Obligations and as to which the ABL Agent and ABL Secured Parties have not yet received
final payment as of the Purchase Date, and (B) for any indemnification obligations, ABL Cash
Management Obligations and ABL Obligations under or in connection with ABL Hedging Agreements,
letters of credit, ABL Canadian Credit Agreement Guaranties or any ABL Canadian Secured
Obligations, to the extent that the cash collateral delivered pursuant to clauses (w), (x), (y) and
(z) above, are insufficient to pay such ABL Obligations and ABL Canadian Secured Obligations in
full. Such purchase price shall be remitted by wire transfer in immediately available funds to
such bank account or accounts of the ABL Agent (for the benefit of the ABL Secured Parties) as the
ABL Agent shall have specified in writing to the Term Agent. Interest and fees shall be calculated
to but excluding the Purchase Date if the amounts so paid by the Purchasing Creditors to the bank
account or accounts designated by the ABL Agent are received in such bank account or accounts prior
to 11:00 a.m., New York time, and interest shall be calculated to and including such Purchase Date
if the amounts so paid by the Purchasing Creditors to the bank account or accounts designated by
the ABL Agent are received in such bank account or accounts after 11:00 a.m., New York time.


 


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(c) Any purchase pursuant to the purchase option set forth in this Section 3.8 shall, except
as provided below, be expressly made without representation or warranty of any kind by the ABL
Agent or the other ABL Secured Parties as to the ABL Obligations, the collateral or otherwise, and
without recourse to the ABL Agent and the other ABL Secured Parties as to the ABL Obligations, the
collateral or otherwise, except that the ABL Agent and
each of the ABL Secured Parties, as to itself only, shall represent and warrant only (i) the
principal amount of the ABL Obligations being sold by it, (ii) that such Person has not created any
Lien on any ABL Obligations being sold by it that has not been discharged at the time of or prior
to such sale, and (iii) that such Person has the right to assign the ABL Obligations being assigned
by it and its assignment agreement has been duly authorized and delivered.



(d) Upon notice to the Credit Parties by the Term Agent and the ABL Agent that the purchase of
ABL Obligations pursuant to this Section 3.8 has been consummated by delivery of the purchase price
and other required amounts to the ABL Agent, the Credit Parties shall treat the Purchasing
Creditors as holders of the ABL Obligations and the Term Agent shall be deemed appointed to act in
such capacity as the “agent” or “administrative agent” (or analogous capacity) (the
“Replacement Agent”) under the ABL Documents, for all purposes hereunder and under each ABL
Document (it being agreed that the ABL Agent shall have no obligation to act as such replacement
“agent” or “administrative agent” (or analogous capacity)). In connection with any purchase of ABL
Obligations pursuant to this Section 3.8, each ABL Lender and ABL Agent agrees to enter into and
deliver to the Replacement Agent on behalf of the Purchasing Creditors on the Purchase Date, as a
condition to closing, an assignment agreement customarily used by the ABL Agent in connection with
the ABL Credit Agreement and the ABL Agent and each other ABL Lender shall deliver all possessory
Collateral (if any), together with any necessary endorsements and other documents (including any
applicable stock powers or bond powers), then in its possession or in the possession of its agent
or bailee (other than the Term Agent), or turn over control as to any pledged Collateral, deposit
accounts or securities accounts constituting Collateral of which it or its agent or bailee (other
than the Term Agent) then has control, as the case may be, to the Replacement Agent, and deliver
the loan register and participant register, if applicable, and all other records of outstanding
amounts pertaining to the ABL Obligations to the Replacement Agent and otherwise take such actions
as may be reasonably appropriate to effect an orderly transition to the Replacement Agent. Upon
the consummation of the purchase of the ABL Obligations pursuant to this Section 3.8, the ABL Agent
(and all other agents under the ABL Credit Agreement or any other ABL Documents) shall be deemed to
have resigned as an “agent” or “administrative agent” for the ABL Secured Parties under the ABL
Documents; provided that the ABL Agent (and all other agents under the ABL Credit Agreement or any
other ABL Documents) shall be entitled to all of the rights and benefits of a former “agent” or
“administrative agent” under the ABL Credit Agreement or such other ABL Document.



(e) Notwithstanding the foregoing purchase of the ABL Obligations by the Purchasing Creditors,
the ABL Secured Parties shall retain those contingent indemnification obligations and other
obligations under the ABL Documents which by their express terms would survive any repayment of the
ABL Obligations pursuant to this Section 3.8.


 


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Section 3.9 Payments Over.



(a) So long as the Discharge of Term Obligations has not occurred, any Term Priority
Collateral or Proceeds thereof not constituting ABL Priority Collateral received by the ABL Agent
or any other ABL Secured Party in connection with the exercise of any right or remedy (including
set off) relating to the Term Priority Collateral in contravention of this Agreement (it being
understood that the application of proceeds from any Deposit Account,
Securities Account or Commodity Account prior to the giving in accordance with Section 7.5 of
a Term Cash Proceeds Notice to the ABL Agent with respect to such proceeds shall not be deemed in
contravention of this Agreement) shall be segregated and held in trust and forthwith paid over to
the Term Agent for the benefit of the Term Secured Parties in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Term
Agent is hereby authorized to make any such endorsements as agent for the ABL Agent or any such
other ABL Secured Parties. This authorization is coupled with an interest and is irrevocable until
such time as this Agreement is terminated in accordance with its terms.



(b) So long as the Discharge of ABL Obligations has not occurred, any ABL Priority Collateral
or Proceeds thereof not constituting Term Priority Collateral received by the Term Agent or any
other Term Secured Party in connection with the exercise of any right or remedy (including set off)
relating to the ABL Priority Collateral in contravention of this Agreement shall be segregated and
held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Secured Parties
in the same form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The ABL Agent is hereby authorized to make any such
endorsements as agent for the Term Agent or any such other Term Secured Party. This authorization
is coupled with an interest and is irrevocable until such time as this Agreement is terminated in
accordance with its terms.



ARTICLE 4

APPLICATION OF PROCEEDS




Section 4.1 Application of Proceeds.



(a) Revolving Nature of ABL Obligations. The Term Agent, for and on behalf of itself
and the Term Secured Parties, expressly acknowledges and agrees that (i) the ABL Credit Agreement
includes a revolving commitment, that in the ordinary course of business the ABL Agent and the ABL
Lenders will apply payments and make advances and other financial accommodations thereunder, and
that no application of any Collateral or proceeds thereof or the release of any Lien by the ABL
Agent upon any portion of the Collateral in connection with a permitted disposition by any of the
ABL Credit Parties under any ABL Credit Agreement shall constitute the Exercise of Secured Creditor
Remedies under this Agreement; (ii) the obligations guaranteed under any ABL Canadian Credit
Agreement Guaranty include obligations with respect to a revolving commitment provided in the ABL
Canadian Credit Agreement and that in the ordinary course of business the lenders providing such
revolving commitment and the agent for such lenders will apply payments and make advances and other
financial accommodations thereunder, (iii) the amount of the ABL Obligations that may be
outstanding at any time or from time to time may be increased or reduced and subsequently
reborrowed, and that the terms of the ABL Obligations may be modified, amended and restated,
extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be
increased, replaced or refinanced, in each event, without notice to or consent by the Term Secured
Parties and without affecting the provisions hereof; and (iv) all Collateral received by the ABL
Agent may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the ABL
Obligations at any time; provided, however, that from and after the date on which
the ABL Agent (or any ABL Secured Party) or the Term Agent (or any Term Secured Party)


 


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commences the Exercise of Any Secured Creditor Remedies, all amounts received by the ABL Agent
or any ABL Lender in respect thereof shall be applied as specified in this Section 4.1. The Lien
Priority shall not be altered or otherwise affected by any such amendment, modification,
supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or
refinancing of either the ABL Obligations or the Term Obligations, or any portion thereof.
Notwithstanding anything to the contrary contained in this Agreement, any Term Document or any ABL
Document, each Credit Party and the Term Agent, for itself and on behalf of the Term Secured
Parties, agrees that (i) only Term Priority Collateral or proceeds of the Term Priority Collateral
shall be deposited in the Term Loan Priority Accounts and (ii) prior to the receipt of a Term Cash
Proceeds Notice with respect thereof, the ABL Secured Parties are hereby permitted to treat as ABL
Priority Collateral all cash, cash equivalents, Money, collections and payments deposited in any
ABL Deposit and Securities Account or otherwise received by any ABL Secured Parties, and no such
amounts credited to any such ABL Deposit and Securities Account or received by any ABL Secured
Parties or applied to the ABL Obligations shall be subject to disgorgement or deemed to be held in
trust for the benefit of the Term Secured Parties (and all claims of the Term Agent or any other
Term Secured Party to such amounts are hereby waived).



(b) Application of Proceeds of ABL Priority Collateral. The ABL Agent and the Term
Agent hereby agree that all ABL Priority Collateral, ABL Priority Proceeds and all other Proceeds
thereof, received by either of them in connection with any Exercise of Secured Creditor Remedies
with respect to the ABL Priority Collateral shall be applied,




first, to the payment of costs and expenses of the ABL Agent in connection with
such Exercise of Secured Creditor Remedies,




second, to the payment, discharge or cash collateralization of the ABL
Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations
shall have occurred,




third, to the payment of the Term Obligations in accordance with the Term
Documents until the Discharge of Term Obligations shall have occurred, and




fourth, the balance, if any, to the Credit Parties or as a court of competent
jurisdiction may direct.



(c) Application of Proceeds of Term Priority Collateral. The ABL Agent and the Term
Agent hereby agree that all Term Priority Collateral, Term Priority Proceeds and all other Proceeds
thereof, received by either of them in connection with any Exercise of Secured Creditor Remedies
with respect to the Term Priority Collateral shall be applied,




first, to the payment of costs and expenses of the Term Agent in connection
with such Exercise of Secured Creditor Remedies,




second, to the payment of the Term Obligations in accordance with the Term
Documents until the Discharge of Term Obligations shall have occurred,


 


35









 






third, to the payment, discharge or cash collateralization of the ABL
Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations
shall have occurred; and




fourth, the balance, if any, to the Credit Parties or as a court of competent
jurisdiction may direct.



(d) Limited Obligation or Liability. In exercising remedies, whether as a secured
creditor or otherwise, the ABL Agent shall have no obligation or liability to the Term Agent or to
any Term Secured Party, and the Term Agent shall have no obligation or liability to the ABL Agent
or any ABL Secured Party, regarding the adequacy of any Proceeds or for any action or omission,
except solely for an action or omission that breaches the express obligations undertaken by each
Party under the terms of this Agreement. Notwithstanding anything to the contrary herein
contained, none of the Parties hereto waives any claim that it may have against a Secured Party on
the grounds that any sale, transfer or other disposition by the Secured Party was not commercially
reasonable in every respect as required by the Uniform Commercial Code.



(e) Turnover of Collateral After Discharge. Upon the Discharge of ABL Obligations,
the ABL Agent shall deliver to the Term Agent or shall execute such documents as the Term Agent may
reasonably request to enable the Term Agent to have control over any Control Collateral still in
the ABL Agent’s possession, custody, or control in the same form as received with any necessary
endorsements (in each case, subject to the reinstatement provisions of Section 5.3), or as a court
of competent jurisdiction may otherwise direct. Upon the Discharge of Term Obligations, the Term
Agent shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may
reasonably request to enable the ABL Agent to have control over any Control Collateral still in the
Term Agent’s possession, custody or control in the same form as received with any necessary
endorsements (in each case, subject to the reinstatement provisions of Section 5.3), or as a court
of competent jurisdiction may otherwise direct.



Section 4.2 Specific Performance. Each of the ABL Agent and the Term Agent is hereby authorized to demand specific performance of
this Agreement, whether or not any Borrower or any Guarantor shall have complied with any of the
provisions of any of the Credit Documents, at any time when the other Party shall have failed to
comply with any of the provisions of this Agreement applicable to it. Each of the ABL Agent, for
and on behalf of itself and the ABL Secured Parties, and the Term Agent, for and on behalf of
itself and the Term Secured Parties, hereby irrevocably waives any defense based on the adequacy of
a remedy at law that might be asserted as a bar to such remedy of specific performance.


 


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ARTICLE 5

INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS




Section 5.1 Notice of Acceptance and Other Waivers.



(a) All ABL Obligations at any time made or incurred by the ABL US Borrower or any Guarantor
shall be deemed to have been made or incurred in reliance upon this Agreement, and the Term Agent,
on behalf of itself and the Term Secured Parties, hereby waives
notice of acceptance, or proof of reliance, by the ABL Agent or any ABL Secured Party of this
Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or
non-payment of all or any part of the ABL Obligations. All Term Obligations at any time made or
incurred by any Term Borrower or any Guarantor shall be deemed to have been made or incurred in
reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties,
hereby waives notice of acceptance, or proof of reliance, by the Term Agent or any Term Secured
Party of this Agreement, and notice of the existence, increase, renewal, extension, accrual,
creation, or non-payment of all or any part of the Term Obligations.



(b) None of the ABL Agent, any ABL Secured Party, or any of their respective Affiliates,
directors, officers, employees, or agents shall be liable for failure to demand, collect, or
realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under
any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any
other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as
specifically provided in this Agreement. If the ABL Agent or any ABL Secured Party honors (or
fails to honor) a request by the ABL US Borrower for an extension of credit pursuant to any ABL
Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party
has knowledge that the honoring of (or failure to honor) any such request would constitute a
default under the terms of any Term Credit Agreement or any other Term Document or an act,
condition, or event that, with the giving of notice or the passage of time, or both, would
constitute such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise
any of its contractual rights or remedies under any ABL Documents (subject to the express terms and
conditions hereof), neither the ABL Agent nor any ABL Secured Party shall have any liability
whatsoever to the Term Agent or any Term Secured Party as a result of such action, omission, or
exercise (so long as any such exercise does not breach the express terms and provisions of this
Agreement). The ABL Agent and the ABL Secured Parties shall be entitled to manage and supervise
their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL
Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and
extensions of credit without regard to any rights or interests that the Term Agent or any of the
Term Secured Parties have in the Collateral, except as otherwise expressly set forth in this
Agreement. The Term Agent, on behalf of itself and the Term Secured Parties, agrees that neither
the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease,
license, application, or other disposition of all or any portion of the Collateral or Proceeds
thereof, pursuant to the ABL Documents, so long as such disposition is conducted in accordance with
mandatory provisions of applicable law and does not breach the provisions of this Agreement.



(c) None of the Term Agent, any Term Secured Party or any of their respective Affiliates,
directors, officers, employees, or agents shall be liable for failure to demand, collect, or
realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under
any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any
other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as
specifically provided in this Agreement. If the Term Agent or any Term Secured Party honors (or
fails to honor) a request by any Term Borrower for an extension of credit pursuant to any Term
Credit Agreement or any of the other Term Documents, whether the Term Agent or any Term Secured
Party has knowledge that the honoring of (or failure to honor) any such request would constitute a
default under the terms of any ABL Credit


 


37









 






Agreement or any other ABL Document or an act, condition, or event that, with the giving of
notice or the passage of time, or both, would constitute such a default, or if the Term Agent or
any Term Secured Party otherwise should exercise any of its contractual rights or remedies under
the Term Documents (subject to the express terms and conditions hereof), neither the Term Agent nor
any Term Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured
Party as a result of such action, omission, or exercise (so long as any such exercise does not
breach the express terms and provisions of this Agreement). The Term Agent and the Term Secured
Parties shall be entitled to manage and supervise their loans and extensions of credit under the
Term Documents as they may, in their sole discretion, deem appropriate, and may manage their loans
and extensions of credit without regard to any rights or interests that the ABL Agent or any ABL
Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement.
The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the Term Agent
or the Term Secured Parties shall incur any liability as a result of a sale, lease, license,
application, or other disposition of the Collateral or any part or Proceeds thereof, pursuant to
the Term Documents, so long as such disposition is conducted in accordance with mandatory
provisions of applicable law and does not breach the provisions of this Agreement.



Section 5.2 Modifications to ABL Documents, Term Documents and ABL Canadian Documents.



(a) The Term Agent, on behalf of itself and the Term Secured Parties, hereby agrees that,
without affecting the obligations of the Term Agent and the Term Secured Parties hereunder, the ABL
Agent and the ABL Secured Parties may, at any time and from time to time, in their sole discretion
without the consent of or notice to the Term Agent or any Term Secured Party, and without incurring
any liability to the Term Agent or any Term Secured Party or impairing or releasing the
subordination of Lien Priority provided for herein, amend, restate, supplement, replace, refinance,
extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner
whatsoever (other than in a manner which would contravene the provisions of this Agreement),
including, without limitation, to:




(i) change the manner, place, time, or terms of payment or renew, alter or increase,
all or any of the ABL Obligations or otherwise amend, restate, supplement, or otherwise
modify in any manner, or grant any waiver or release with respect to, all or any part of the
ABL Obligations or any of the ABL Documents;




(ii) subject to Section 2.5, retain or obtain a Lien on any Property of any Person to
secure any of the ABL Obligations, and in connection therewith to enter into any additional
ABL Documents;




(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to
any departure from, any guaranty or other obligations of any Person obligated in any manner
under or in respect of any of the ABL Obligations;




(iv) release its Lien on any Collateral or other Property;


 


38









 






(v) exercise or refrain from exercising any rights against the ABL US Borrower, any
Guarantor, or any other Person;




(vi) subject to Section 2.5, retain or obtain the primary or secondary obligation of
any other Person with respect to any of the ABL Obligations; and




(vii) otherwise manage and supervise the ABL Obligations as the ABL Agent shall deem
appropriate.



(b) The ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that,
without affecting the obligations of the ABL Agent and the ABL Secured Parties hereunder, the Term
Agent and the Term Secured Parties may, at any time and from time to time, in their sole discretion
without the consent of or notice to the ABL Agent or any ABL Secured Party, and without incurring
any liability to the ABL Agent or any ABL Secured Party or impairing or releasing the subordination
of Lien Priority provided for herein, amend, restate, supplement, replace, refinance, extend,
consolidate, restructure, or otherwise modify any of the Term Documents in any manner whatsoever
(other than in a manner which would contravene the provisions of this Agreement), including,
without limitation, to:




(i) change the manner, place, time, or terms of payment or renew, alter or increase,
all or any of the Term Obligations or otherwise amend, restate, supplement, or otherwise
modify in any manner, or grant any waiver or release with respect to, all or any part of the
Term Obligations or any of the Term Documents;




(ii) subject to Section 2.5, retain or obtain a Lien on any Property of any Person to
secure any of the Term Obligations, and in connection therewith to enter into any additional
Term Documents;




(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to
any departure from, any guaranty or other obligations of any Person obligated in any manner
under or in respect of any of the Term Obligations;




(iv) release its Lien on any Collateral or other Property;




(v) exercise or refrain from exercising any rights against any Term Borrower, any
Guarantor, or any other Person;




(vi) subject to Section 2.5, retain or obtain the primary or secondary obligation of
any other Person with respect to any of the Term Obligations; and




(vii) otherwise manage and supervise the Term Obligations as the Term Agent shall deem
appropriate.


 


39









 





(c) The ABL Obligations and the Term Obligations may be refinanced, in whole or in part, from
time to time, in each case, without notice to or the consent of the ABL Agent, the ABL Secured
Parties, the Term Agent or the Term Secured Parties, as the case may be, all without affecting the
Lien Priorities provided for herein or the other provisions hereof, provided, however, that the
holders of any class or series of such refinancing Indebtedness (or an
authorized agent or trustee on their behalf) bind themselves in writing to the terms of this
Agreement pursuant to such documents or agreements (including amendments or supplements to this
Agreement) as the ABL Agent or the Term Agent, as the case may be, shall reasonably request and in
form and substance reasonably acceptable to the ABL Agent or the Term Agent, as the case may be,
and any such refinancing transaction shall be in accordance with any applicable provisions of both
the ABL Documents and the Term Documents (to the extent such documents survive the refinancing).



(d) The Term Agent, on behalf of itself and the Term Secured Parties, hereby agrees that,
without affecting the obligations of the Term Agent and the Term Secured Parties hereunder, without
the consent of or notice to the Term Agent or any Term Secured Party, and without the ABL Agent or
any ABL Secured Party incurring any liability to the Term Agent or any Term Secured Party or
impairing or releasing the subordination of Lien Priority provided for herein, the ABL Canadian
Credit Agreement and any other Loan Document (as defined in the ABL Canadian Credit Agreement) may
be amended, restated, supplemented, replaced, refinanced, extended, consolidated, restructured, or
otherwise modified in any manner whatsoever, including, without limitation, to:




(i) change the manner, place, time, or terms of payment or renew, alter or increase,
all or any of the ABL Canadian Secured Obligations or otherwise amend, restate, supplement,
or otherwise modify in any manner, or grant any waiver or release with respect to, all or
any part of the ABL Canadian Secured Obligations or the ABL Canadian Credit Agreement or any
other Loan Documents (as defined in the ABL Canadian Credit Agreement);




(ii) retain or obtain a Lien on any Property of any Person to secure any of the ABL
Canadian Secured Obligations, and in connection therewith to enter into any additional Loan
Documents (as defined in the ABL Canadian Credit Agreement);




(iii) amend, or grant any waiver, compromise, or release with respect to, or consent to
any departure from, any guaranty or other obligations of any Person obligated in any manner
under or in respect of any of the ABL Canadian Secured Obligations;




(iv) release its Lien on any collateral or other Property securing any of the ABL
Canadian Secured Obligations;




(v) exercise or refrain from exercising any rights against the borrower or any
guarantor under or with respect to the ABL Canadian Credit Agreement or any other Person;




(vi) retain or obtain the primary or secondary obligation of any other Person with
respect to any of the ABL Canadian Secured Obligations; and




(vii) otherwise manage and supervise the ABL Canadian Secured Obligations as the
holders of the ABL Canadian Secured Obligations (or any agent or trustee therefor) shall
deem appropriate.


 


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The ABL Canadian Secured Obligations may be refinanced, in whole or in part, from time to time, in
each case, without notice to or the consent of the Term Agent or the Term Secured Parties, all
without affecting the Lien Priorities provided for herein or the other provisions hereof.



Section 5.3 Reinstatement and Continuation of Agreement.



(a) If the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or
otherwise to turn over or otherwise pay to the estate of the ABL US Borrower, any Guarantor, or any
other Person any payment made in satisfaction of all or any portion of the ABL Obligations or the
ABL Canadian Secured Obligations (an “ABL Recovery”), then the ABL Obligations and/or the
ABL Canadian Secured Obligations, as applicable, shall be reinstated to the extent of such ABL
Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement
shall be reinstated in full force and effect in the event of such ABL Recovery, and such prior
termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of
the Parties from such date of reinstatement. All rights, interests, agreements, and obligations of
the ABL Agent, the Term Agent, the ABL Secured Parties, and the Term Secured Parties under this
Agreement shall remain in full force and effect and shall continue irrespective of the commencement
of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or
against any Borrower or any Guarantor or any other circumstance which otherwise might constitute a
defense available to or a discharge of any Borrower or any Guarantor in respect of the ABL
Obligations or the Term Obligations. No priority or right of the ABL Agent or any ABL Secured
Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the
part of the ABL US Borrower or any Guarantor or by the noncompliance by any Person with the terms,
provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the
ABL Agent or any ABL Secured Party may have.



(b) If the Term Agent or any Term Secured Party is required in any Insolvency Proceeding or
otherwise to turn over or otherwise pay to the estate of any Term Borrower, any Guarantor, or any
other Person any payment made in satisfaction of all or any portion of the Term Obligations (a
“Term Recovery”), then the Term Obligations shall be reinstated to the extent of such Term
Recovery. If this Agreement shall have been terminated prior to such Term Recovery, this Agreement
shall be reinstated in full force and effect in the event of such Term Recovery, and such prior
termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of
the Parties from such date of reinstatement. All rights, interests, agreements, and obligations of
the ABL Agent, the Term Agent, the ABL Secured Parties, and the Term Secured Parties under this
Agreement shall remain in full force and effect and shall continue irrespective of the commencement
of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or
against any Borrower or any Guarantor or any other circumstance which otherwise might constitute a
defense available to or a discharge of any Borrower or any Guarantor in respect of the ABL
Obligations or the Term Obligations. No priority or right of the Term Agent or any Term Secured
Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the
part of any Term Borrower or any Guarantor or by the noncompliance by any Person with the terms,
provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which
the Term Agent or any Term Secured Party may have.


 


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ARTICLE 6

INSOLVENCY PROCEEDINGS




Section 6.1 DIP Financing.



(a) If the ABL US Borrower or any Guarantor shall be subject to any Insolvency Proceeding at
any time prior to the Discharge of ABL Obligations, and the ABL Agent or any of the ABL Secured
Parties shall seek to provide the ABL US Borrower or any Guarantor with, or consent to a third
party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for
the use of cash collateral constituting ABL Priority Collateral under Section 363 of the Bankruptcy
Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in respect
of measures granted with similar effect under any foreign Debtor Relief Laws) (each, a “DIP
Financing”), with such DIP Financing to be secured by all or any portion of the Collateral
(including assets that, but for the application of Section 552 of the Bankruptcy Code (or any
similar provision of any foreign Debtor Relief Laws), would be Collateral), then the Term Agent, on
behalf of itself and the Term Secured Parties, agrees that it will raise no objection and will not
support any objection to such DIP Financing or to the Liens securing the same on the grounds of a
failure to provide “adequate protection” for the Liens of the Term Agent or any Term Secured Party
securing the Term Obligations or on any other grounds (and will not request any adequate protection
with respect to its Lien on the ABL Priority Collateral solely as a result of such DIP Financing
that is ABL Priority Collateral), so long as (i) the Term Agent retains its Lien on the Collateral
to secure the Term Obligations (in each case, including Proceeds thereof arising after the
commencement of the case under any Debtor Relief Laws) and, as to the Term Priority Collateral
only, such Lien has the same priority as existed prior to the commencement of the case under the
subject Debtor Relief Laws and any Lien on the Term Priority Collateral securing such DIP Financing
is junior and subordinate to the Lien of the Term Agent on the Term Priority Collateral, (ii) all
Liens on ABL Priority Collateral securing any such DIP Financing shall be senior to or on a parity
with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations on ABL
Priority Collateral, and (iii) the foregoing provisions of this Section 6.1(a) shall not prevent
the Term Agent and the Term Secured Parties from objecting to any provision in any DIP Financing
relating to any provision or content of a plan of reorganization or other plan of similar effect
under any Debtor Relief Laws.



(b) If any Term Borrower or any Guarantor shall be subject to any Insolvency Proceeding at any
time prior to the Discharge of Term Obligations, and the Term Agent or any of the Term Secured
Parties shall seek to provide any Term Borrower or any Guarantor with, or consent to a third party
providing, any DIP Financing, with such DIP Financing to be secured by all or any portion of the
Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code
(or any similar provision of any foreign Debtor Relief Laws), would be Collateral), then the ABL
Agent, on behalf of itself and the ABL Secured Parties, agrees that it will raise no objection and
will not support any objection to such DIP Financing or to the Liens securing the same on the
grounds of a failure to provide “adequate protection” for the Liens of the ABL Agent or any ABL
Secured Party securing the ABL Obligations or on any other grounds (and will not request any
adequate protection with respect to its Lien on the Term Priority Collateral solely as a result of
such DIP Financing that is Term Priority Collateral), so long as (i) the ABL Agent retains its Lien
on the Collateral to secure


 


42









 






the
ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under any
Debtor Relief Law) and, as to the ABL Priority Collateral only, such Lien has the same priority as
existed prior to the commencement of the case under the subject Debtor Relief Laws and any Lien on
ABL Priority Collateral securing such DIP Financing is junior and subordinate to the Lien of the
ABL Agent on the ABL Priority Collateral, (ii) all Liens on Term Priority Collateral securing any
such DIP Financing shall be senior to or on a parity with the Liens of the Term Agent and the Term
Secured Parties securing the Term Obligations on Term Priority Collateral, and (iii) the foregoing
provisions of this Section 6.1(b) shall not prevent the ABL Agent and the ABL Secured Parties from
objecting to any provision in any DIP Financing relating to any provision or content of a plan of
reorganization or other plan of similar effect under any Debtor Relief Laws.



(c) All Liens granted to the ABL Agent or the Term Agent in any Insolvency Proceeding, whether
as adequate protection or otherwise, are intended by the Parties to be and shall be deemed to be
subject to the Lien Priority and the other terms and conditions of this Agreement. For clarity,
the ABL Agent and the ABL Secured Parties shall not seek to “prime” the Lien of the Term Agent and
the Term Secured Parties on the Term Priority Collateral and the Term Agent and the Term Secured
Parties shall not seek to “prime” the Lien of the ABL Agent and the ABL Secured Parties on the ABL
Priority Collateral.



Section 6.2 Relief From Stay. Until the Discharge of ABL Obligations has occurred, the Term Agent, on behalf of itself and the
Term Secured Parties, agrees not to seek relief from the automatic stay or any other stay in any
Insolvency Proceeding in respect of any portion of the ABL Priority Collateral without the ABL
Agent’s express written consent. Until the Discharge of Term Obligations has occurred, the ABL
Agent, on behalf of itself and the ABL Secured Parties, agrees not to seek relief from the
automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the Term
Priority Collateral without the Term Agent’s express written consent, except in order for the ABL
Agent to obtain and utilize the rights and benefits conferred upon it pursuant to Section 3.6. In
addition, neither the Term Agent nor the ABL Agent shall seek any relief from the automatic stay
with respect to any Collateral without providing three (3) days’ prior written notice to the other,
unless such period is agreed by both the ABL Agent and the Term Agent to be modified or unless the
ABL Agent or Term Agent, as applicable, makes a good faith determination that either (A) the ABL
Priority Collateral or the Term Priority Collateral, as applicable, will decline speedily in value
or (B) the failure to take any action will have a reasonable likelihood of endangering the ABL
Agent’s or the Term Agent’s ability to realize upon its Collateral.



Section 6.3 No Contest; Adequate Protection.



(a) The Term Agent, on behalf of itself and the Term Secured Parties, agrees that, prior to
the Discharge of ABL Obligations, none of them shall seek or accept any form of adequate protection
under any or all of §361, §362, §363 or §364 of the Bankruptcy Code with respect to the ABL
Priority Collateral, except as set forth in this Section 6.3 or as may otherwise be consented to in
writing by the ABL Agent in its sole and absolute discretion. The Term Agent, on behalf of itself
and the Term Secured Parties, agrees that, prior to the Discharge of ABL Obligations, none of them
shall contest (or support any other Person contesting) (i) any


 


43









 






request by the ABL Agent or any ABL
Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(b) above), (ii) any proposed provision of
DIP Financing by the ABL Agent or any of the ABL Secured Parties (or any other Person proposing to
provide DIP Financing with the consent of the ABL Agent) (unless in contravention of Section 6.1(a)
above) or (iii) any objection by the ABL Agent or any ABL Secured Party to any motion, relief,
action, or proceeding based on a claim by the ABL Agent or any ABL Secured Party that its interests
in the Collateral (unless in contravention of Section 6.1(b) above) are not adequately protected
(or any other similar request under any law applicable to an Insolvency Proceeding), so long as any
Liens granted to the ABL Agent as adequate protection of its interests are subject to this
Agreement.



(b) The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the
Discharge of Term Obligations, none of them shall seek or accept any form of adequate protection
under any or all of §361, §362, §363 or §364 of the Bankruptcy Code with respect to the Term
Priority Collateral, except as set forth in this Section 6.3 or as may otherwise be consented to in
writing by the Term Agent in its sole and absolute discretion. The ABL Agent, on behalf of itself
and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them
shall contest (or support any other Person contesting) (i) any request by the Term Agent or any
Term Secured Party for adequate protection of its interest in the Collateral (unless in
contravention of Section 6.1(a) above), (ii) any proposed provision of DIP Financing by the Term
Agent or any of the Term Secured Parties (or any other Person proposing to provide DIP Financing
with the consent of the Term Agent) (unless in contravention of Section 6.1(b) above) or (iii) any
objection by the Term Agent or any Term Secured Party to any motion, relief, action or proceeding
based on a claim by the Term Agent or any Term Secured Party that its interests in the Collateral
(unless in contravention of Section 6.1(a) above) are not adequately protected (or any other
similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted
to the Term Agent as adequate protection of its interests are subject to this Agreement.



(c) Notwithstanding the foregoing provisions in this Section 6.3, in any Insolvency
Proceeding:



(i) if the ABL Secured Parties (or any subset thereof) are granted adequate protection with
respect to the ABL Priority Collateral in the form of additional collateral (even if such
collateral is not of a type which would otherwise have constituted ABL Priority Collateral), then
the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that the Term Agent, on
behalf of itself or any of the Term Secured Parties, may seek or request (and the ABL Secured
Parties will not oppose such request unless in contravention of Section 6.1(a)) adequate protection
with respect to its interests in such Collateral in the form of a Lien on the same additional
collateral, which Lien will be subordinated to the Liens securing the ABL Obligations on the same
basis as the other Liens of the Term Agent on ABL Priority Collateral;



(ii) in the event the Term Secured Parties (or any subset thereof) are granted adequate
protection in respect of Term Priority Collateral in the form of additional collateral (even if
such collateral is not of a type which would otherwise have constituted Term Priority Collateral),
then the Term Agent, on behalf of itself and any of the Term Secured Parties, agrees that the ABL
Agent, on behalf of itself or any of the ABL Secured Parties, may seek or request (and the Term
Secured Parties will not oppose such request) adequate protection
with respect to its interests in such Collateral in the form of a Lien on the same additional
collateral, which Lien (to the extent not in ABL Priority Collateral) will be subordinated to the
Liens securing the Term Obligations on the same basis as the other Liens of the ABL Agent on Term
Priority Collateral; and


 


44









 





(iii) except as otherwise expressly set forth in Section 6.1(a) or in connection with the
exercise of remedies with respect to the ABL Priority Collateral, nothing herein shall limit the
rights of the Term Agent or the Term Secured Parties from seeking adequate protection with respect
to their rights in the Term Priority Collateral in any Insolvency Proceeding (including adequate
protection in the form of a cash payment, periodic cash payments or otherwise). Except as
otherwise expressly set forth in Section 6.1(b) or in connection with the exercise of remedies with
respect to the Term Priority Collateral, nothing herein shall limit the rights of the ABL Agent or
the ABL Secured Parties from seeking adequate protection with respect to their rights in the ABL
Priority Collateral in any Insolvency Proceeding (including adequate protection in the form of a
cash payment, periodic cash payments or otherwise).



Section 6.4 Asset Sales. The Term Agent agrees, on behalf of itself and the Term Secured Parties, that it will not oppose
any sale consented to by the ABL Agent of any ABL Priority Collateral pursuant to Section 363(f) of
the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding
or under a court order in respect of measures granted with similar effect under any foreign Debtor
Relief Laws) so long as the Term Agent, for the benefit of the Term Secured Parties, shall retain a
Lien on the proceeds of such sale (to the extent such proceeds are not applied to the ABL
Obligations in accordance with Section 4.1(b)). The ABL Agent agrees, on behalf of itself and the
ABL Secured Parties, that it will not oppose any sale consented to by the Term Agent of any Term
Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision
under the law applicable to any Insolvency Proceeding or under a court order in respect of measures
granted with similar effect under any foreign Debtor Relief Laws) so long as (i) any such sale is
made in accordance with Section 3.6 and (ii) the ABL Agent, for the benefit of the ABL Secured
Parties, shall retain a Lien on the proceeds of such sale (to the extent such proceeds are not
applied to the Term Obligations in accordance with Section 4.1(c)). If such sale of Collateral
includes both ABL Priority Collateral and Term Priority Collateral and the Parties are unable after
negotiating in good faith to agree on the allocation of the purchase price between the ABL Priority
Collateral and Term Priority Collateral, either Party may apply to the court in such Insolvency
Proceeding to make a determination of such allocation, and the court’s determination shall be
binding upon the Parties.



Section 6.5 Separate Grants of Security and Separate Classification. Each Term Secured Party and each ABL Secured Party acknowledges and agrees that (i) the grants
of Liens pursuant to the ABL Collateral Documents and the Term Collateral Documents constitute two
separate and distinct grants of Liens and (ii) because of, among other things, their differing
rights in the Collateral, the Term Obligations are fundamentally different from the ABL Obligations
and must be separately classified in any plan of reorganization (or other plan of similar effect
under any Debtor Relief Laws) proposed or adopted in an Insolvency Proceeding. To further
effectuate the intent of the parties as provided in the immediately preceding sentence, if it is
held that the claims of the ABL


 


45









 






Secured
Parties and the Term Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior
secured claims), then the ABL Secured Parties and the Term Secured Parties hereby acknowledge and
agree that all distributions with respect to Collateral shall be made as if there were separate
classes of ABL Obligation claims and Term Obligation claims against the Credit Parties, with the
effect being that, to the extent that the aggregate value of the ABL Priority Collateral or Term
Priority Collateral, as applicable, is sufficient (for this purpose ignoring all claims held by the
other Secured Parties), the ABL Secured Parties or the Term Secured Parties, respectively, shall be
entitled to receive, in addition to amounts distributed to them in respect of principal,
pre-petition interest and other claims, all amounts owing in respect of post-petition interest that
is available from each pool of Priority Collateral for each of the ABL Secured Parties and the Term
Secured Parties, respectively, before any distribution is made in respect of the claims held by the
other Secured Parties from such Collateral, with the other Secured Parties hereby acknowledging and
agreeing to turn over to the respective other Secured Parties amounts otherwise received or
receivable by them to the extent necessary to effectuate the intent of this sentence, even if such
turnover has the effect of reducing the aggregate recoveries.



Section 6.6 Enforceability. The provisions of this Agreement are intended to be and shall be enforceable under Section
510(a) of the Bankruptcy Code.



Section 6.7 ABL Obligations Unconditional. All rights of the ABL Agent and the ABL Secured Parties hereunder, and all agreements and
obligations of the Term Agent, the Term Secured Parties and the Credit Parties (to the extent
applicable) hereunder, shall remain in full force and effect irrespective of:



A. any lack of validity or enforceability of any ABL Document or the ABL Canadian Credit
Agreement or any related document;



B. any change in the time, place or manner of payment of, or in any other term of, all or any
portion of the ABL Obligations or the ABL Canadian Secured Obligations, or any amendment, waiver or
other modification, whether by course of conduct or otherwise, or any refinancing, replacement,
refunding or restatement of any ABL Document (but solely to the extent permitted pursuant to
Section 5.2(a) hereof) or the ABL Canadian Credit Agreement or any related document;



C. any exchange, release, voiding, avoidance or non perfection of any security interest in any
Collateral or any other collateral, or any release, amendment, waiver or other modification,
whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement
or increase of all or any portion of the ABL Obligations or the ABL Canadian Secured Obligations or
any guarantee or guaranty thereof; or



D. any other circumstances that otherwise might constitute a defense available to, or a
discharge of, any Credit Party in respect of the ABL Obligations (other than Discharge of ABL
Obligations), or of any of the Term Agent, any Term Secured Party or any Credit Party, to the
extent applicable, in respect of this Agreement.


 


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Section 6.8 Term Obligations Unconditional. All rights of the Term Agent and the Term Secured Parties hereunder, and all agreements and
obligations of the ABL Agent, the ABL
Secured Parties and the Credit Parties (to the extent applicable) hereunder, shall remain in full
force and effect irrespective of:




A. any lack of validity or enforceability of any Term Document;



B. any change in the time, place or manner of payment of, or in any other term of, all or any
portion of the Term Obligations, or any amendment, waiver or other modification, whether by course
of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Term
Document (but solely to the extent permitted pursuant to Section 5.2(b) hereof);



C. any exchange, release, voiding, avoidance or non perfection of any security interest in any
Collateral, or any other collateral, or any release, amendment, waiver or other modification,
whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement
or increase of all or any portion of the Term Obligations or any guarantee or guaranty thereof; or



D. any other circumstances that otherwise might constitute a defense available to, or a
discharge of, any Credit Party in respect of the Term Obligations (other than Discharge of Term
Obligations), or of any of the ABL Agent, any ABL Secured Party or any Credit Party, to the extent
applicable, in respect of this Agreement.



ARTICLE 7

MISCELLANEOUS




Section 7.1 Rights of Subrogation. The Term Agent, for and on behalf of itself and the Term Secured Parties, agrees that no payment
to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall
entitle the Term Agent or any Term Secured Party to exercise any rights of subrogation in respect
thereof until the Discharge of ABL Obligations shall have occurred. Following the Discharge of ABL
Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments as the
Term Agent or any Term Secured Party may reasonably request to evidence the transfer by subrogation
to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent
by such Person, so long as all costs and expenses (including all reasonable legal fees and
disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon
request for payment thereof. The ABL Agent, for and on behalf of itself and the ABL Secured
Parties, agrees that no payment to the Term Agent or any Term Secured Party pursuant to the
provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party to exercise any
rights of subrogation in respect thereof until the Discharge of Term Obligations shall have
occurred. Following the Discharge of Term Obligations, the Term Agent agrees to execute such
documents, agreements, and instruments as the ABL Agent or any ABL Secured Party may reasonably
request to evidence the transfer by subrogation to any such Person of an interest in the Term
Obligations resulting from payments to the Term Agent by such Person, so long as all costs and
expenses (including all reasonable legal fees and disbursements) incurred in connection therewith
by the Term Agent are paid by such Person upon request for payment thereof.


 


47









 





Section 7.2 Further Assurances. The Parties will, at their own expense and at any time and from time to time, promptly execute
and deliver all further instruments and documents, and take all further action, that may be
necessary or desirable, or that either Party may reasonably request, in order to protect any right
or interest granted or purported to be granted hereby or to enable the ABL Agent or the Term Agent
to exercise and enforce its rights and remedies hereunder; provided, however, that
no Party shall be required to pay over any payment or distribution, execute any instruments or
documents, or take any other action referred to in this Section 7.2, to the extent that such action
would contravene any law, order or other legal requirement or any of the terms or provisions of
this Agreement, and in the event of a controversy or dispute, such Party may interplead any payment
or distribution in any court of competent jurisdiction, without further responsibility in respect
of such payment or distribution under this Section 7.2.



Section 7.3 Representations. The Term Agent represents and warrants to the ABL Agent that it has the requisite power and
authority under the Term Documents to enter into, execute, deliver, and carry out the terms of this
Agreement on behalf of itself and the Term Secured Parties and that this Agreement shall be binding
obligations of the Term Agent and the Term Secured Parties, enforceable against the Term Agent and
the Term Secured Parties in accordance with its terms. The ABL Agent represents and warrants to
the Term Agent that it has the requisite power and authority under the ABL Documents to enter into,
execute, deliver, and carry out the terms of this Agreement on behalf of itself and the ABL Secured
Parties and that this Agreement shall be binding obligations of the ABL Agent and the ABL Secured
Parties, enforceable against the ABL Agent and the ABL Secured Parties in accordance with its
terms.



Section 7.4 Amendments. No amendment or waiver of any provision of this Agreement nor consent to any departure by any
Party hereto shall be effective unless it is in a written agreement executed by the Term Agent and
the ABL Agent, and then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. Notwithstanding the foregoing, no Credit Party will have
a right to consent to or approve a modification of this Agreement except to the extent the
amendment or waiver would be materially adverse to the Credit Parties.



It is understood that the ABL Agent and the Term Agent, without the consent of any other ABL
Secured Party or Term Secured Party, may in their discretion determine that a supplemental
agreement (which may take the form of an amendment and restatement of this Agreement) is necessary
or appropriate to facilitate having additional indebtedness or other obligations of any of the
Credit Parties become ABL Obligations or Term Obligations, as the case may be, under this Agreement
(the indebtedness or other obligations described above, “Additional Debt”), which
supplemental agreement shall specify whether such Additional Debt constitutes ABL Obligations or
Term Obligations; provided that such Additional Debt is permitted to be incurred under any ABL
Credit Agreement and any Term Credit Agreement then extant in accordance with the terms thereof.


 


48









 





Section 7.5 Addresses for Notices. Unless otherwise specifically provided herein, any notice or other communication herein required
or permitted to be given shall be in writing and may be personally served, telecopied, emailed, or
sent by overnight express courier service or United States mail and shall be deemed to have been
given when delivered in person or by
courier service, upon receipt of an email or telecopy or three (3) days after deposit in the United
States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the
addresses of the Parties hereto (until notice of a change thereof is delivered as provided in this
Section) shall be as set forth below or, as to each Party, at such other address as may be
designated by such Party in a written notice to all of the other Parties.



	 	 	 	 	 
	 

	 	ABL Agent:
	 	Bank of America, N.A.
	 

	 	 	 	335 Madison Avenue
	 

	 	 	 	New York, NY 10017
	 

	 	 	 	Attention: Business Capital-Account Executive
	 

	 	 	 	Telecopier: 646-556-0260
	 

	 	 	 	E-mail: seth.tyminski@baml.com
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Bank of America, N.A.
	 

	 	 	 	City Place 1, 35th Floor
	 

	 	 	 	CT2-500-35-02
	 

	 	 	 	185 Asylum Street
	 

	 	 	 	Hartford, Connecticut 06103
	 

	 	 	 	Attention: Legal Department
	 

	 	 	 	E-mail: timothy.clarke@bankofamerica.com
	 
	 	 	 	 
	 

	 	Term Agent:
	 	JPMorgan Chase Bank, N.A.
	 

	 	 	 	c/o JPMorgan Loan Services
	 

	 	 	 	1111 Fannin Street
	 

	 	 	 	10th Floor
	 

	 	 	 	Houston, Texas 77002
	 

	 	 	 	Attention: Lisa A. McCants
	 

	 	 	 	Telecopier: 713-750-2956
	 

	 	 	 	E-mail: lisa.mccants@jpmorgan.com






Section 7.6 No Waiver; Remedies. No failure on the part of any Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by law.



Section 7.7 Continuing Agreement, Transfer of Secured Obligations. This Agreement is a continuing agreement and shall (a) remain in full force and effect until the
Discharge of ABL Obligations or the Discharge of Term Obligations shall have occurred, (b) be
binding upon the Parties and their successors and assigns, and (c) inure to the benefit of and be
enforceable by the Parties and their respective successors, transferees and permitted assigns.
Except as set forth in Section 7.4, nothing herein is intended, or shall be construed to give, any
other Person any right, remedy or claim under, to or in respect of this Agreement or any
Collateral. All references to any Credit Party shall include any Credit Party as
debtor-in-possession and any receiver or trustee for such Credit Party in any Insolvency
Proceeding. Without limiting the generality of the foregoing clause (c), the ABL Agent, any ABL
Secured Party, the


 


49









 






 Term Agent, or any Term Secured Party may assign or otherwise transfer all or
any portion of the ABL Obligations or the Term Obligations in accordance with the ABL Credit Agreement,
other relevant ABL Document, the Term Credit Agreement or other relevant Term Document, in each
case, as applicable, to any other Person (other than any Borrower, any Guarantor or any Affiliate
of any Borrower or any Guarantor and any Subsidiary of any Borrower or any Guarantor), and such
other Person shall thereupon become vested with all the rights and obligations in respect thereof
granted to the ABL Agent, the Term Agent, any ABL Secured Party, or any Term Secured Party, as the
case may be, herein or otherwise. The ABL Secured Parties and the Term Secured Parties may
continue, at any time and without notice to the other parties hereto, to extend credit and other
financial accommodations, lend monies and provide Indebtedness to, or for the benefit of, any
Credit Party on the faith hereof.



Section 7.8 GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES BUT INCLUDING SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW. This Agreement constitutes the entire agreement and understanding among
the Parties with respect to the subject matter hereof and supersedes any prior agreements, written
or oral, with respect thereto.



Section 7.9 Counterparts. This Agreement may be executed in any number of counterparts, and it is not necessary that the
signatures of all Parties be contained on any one counterpart hereof, each counterpart will be
deemed to be an original, and all together shall constitute one and the same document. Delivery of
an executed signature page to this Agreement by facsimile or other electronic transmission (in .pdf
or similar format) shall be as effective as delivery of a manually signed counterpart of this
Agreement.



Section 7.10 No Third Party Beneficiaries. This Agreement is solely for the benefit of the ABL Agent, ABL Secured Parties, Term Agent and
Term Secured Parties. Except for amendments and waivers which require the consent of any of the
Credit Parties pursuant to Section 7.4, no other Person (including any Borrower, any Guarantor or
any Affiliate of any Borrower or any Guarantor, or any Subsidiary of any Borrower or any Guarantor)
shall be deemed to be a third party beneficiary of this Agreement.



Section 7.11 Headings. The headings of the articles and sections of this Agreement are inserted for purposes of
convenience only and shall not be construed to affect the meaning or construction of any of the
provisions hereof.



Section 7.12 Severability. If any of the provisions in this Agreement shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any
other provision of this Agreement and shall not invalidate the Lien Priority or the application of
Proceeds and other priorities set forth in this Agreement. The Parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of the illegal, invalid
or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.


 


50









 





Section 7.13 Attorneys’ Fees. The Parties agree that if any dispute, arbitration, litigation, or other proceeding is brought
with respect to the enforcement of this Agreement or any provision hereof, the prevailing party in
such dispute, arbitration, litigation, or other proceeding shall be entitled to recover its
reasonable attorneys’ fees and all other costs and expenses incurred in the enforcement of this
Agreement, irrespective of whether suit is brought.



Section 7.14 VENUE; JURY TRIAL WAIVER.



(a) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK
CITY IN THE BOROUGH OF MANHATTAN AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, 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 SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE 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 SHALL AFFECT ANY RIGHT THAT ANY ABL SECURED PARTY OR ANY TERM SECURED PARTY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY TERM DOCUMENTS, OR ANY ABL
DOCUMENTS AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.



(b) EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (a) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.



(c) EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER ‘THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR


 


51









 






OTHERWISE, THAT SUCH OTHER
PERSON 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. EACH PARTY HERETO REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.



(d) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER
PROVIDED FOR NOTICES IN SECTION 7.5. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.



Section 7.15 Intercreditor Agreement. This Agreement is the “Intercreditor Agreement” referred to in the ABL Credit Agreement and the
Term Credit Agreement. Nothing in this Agreement shall be deemed to subordinate the obligations
due to (i) any ABL Secured Party to the obligations due to any Term Secured Party or (ii) any Term
Secured Party to the obligations due to any ABL Secured Party (in each case, whether before or
after the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this
Agreement shall effectuate a subordination of Liens but not a subordination of Indebtedness.



Section 7.16 No Warranties or Liability. The Term Agent and the ABL Agent acknowledge and agree that neither has made any representation
or warranty with respect to the execution, validity, legality, completeness, collectability or
enforceability of any ABL Document or any Term Document. Except as otherwise provided in this
Agreement, the Term Agent and the ABL Agent will be entitled to manage and supervise their
respective extensions of credit to any Credit Party in accordance with law and their usual
practices, modified from time to time as they deem appropriate.



Section 7.17 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any
ABL Document or any Term Document, the provisions of this Agreement shall govern.



Section 7.18 Costs and Expenses. All costs and expenses incurred by the Term Agent and the ABL Agent, including, without
limitation pursuant to Section 3.8(d) and Section 4.1(e) hereunder, shall be reimbursed by Warnaco
and Holdings as provided in Section 10.3 of the Term Credit Agreement (or any similar provision)
and Section 11.3 (or any similar provision) of the ABL Credit Agreement.


 


52









 





Section 7.19 Information Concerning Financial Condition of the Credit Parties.



(a) Each of the Term Agent and the ABL Agent hereby assumes responsibility for keeping itself
informed of the financial condition of the Credit Parties and all other circumstances bearing upon
the risk of nonpayment of the ABL Obligations or the Term
Obligations. The Term Agent and the ABL Agent hereby agree that no Party shall have any duty
to advise any other Party of information known to it regarding such condition or any such
circumstances. In the event the Term Agent or the ABL Agent, in its sole discretion, undertakes at
any time or from time to time to provide any information to any other Party to this Agreement, (a)
it shall be under no obligation (i) to provide any such information to such other Party or any
other Party on any subsequent occasion, (ii) to undertake any investigation not a part of its
regular business routine, or (iii) to disclose any other information, (b) it makes no
representation as to the accuracy or completeness of any such information and shall not be liable
for any information contained therein, and (c) the Party receiving such information hereby agrees
to hold the other Party harmless from any action the receiving Party may take or conclusion the
receiving Party may reach or draw from any such information, as well as from and against any and
all losses, claims, damages, liabilities, and expenses to which such receiving Party may become
subject arising out of or in connection with the use of such information.



(b) The Credit Parties agree that any information provided to the ABL Agent, the Term Agent,
any ABL Secured Party or any Term Secured Party may be shared by such Person with any ABL Secured
Party, any Term Secured Party, the ABL Agent or the Term Agent notwithstanding a request or demand
by any such Credit Party that such information be kept confidential; provided that such
information shall otherwise be subject to the respective confidentiality provisions in the ABL
Credit Agreement and the Term Credit Agreement, as applicable.



[SIGNATURE PAGES FOLLOW]



 


53









 





IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Secured Parties,
and the Term Agent, for and on behalf of itself and the Term Secured Parties, have caused this
Agreement to be duly executed and delivered as of the date first above written.



	 	 	 	 	 
	 	BANK OF AMERICA, N.A., in its capacity as the ABL
Agent

 	 
	 	By:  	/s/  Seth Tyminski
 	 
	 	 	Name:  	Seth Tyminski 	 
	 	 	Title:  	Vice President 	 
	 
	 	JPMORGAN CHASE BANK, N.A., in its capacity as the
Term Agent

 	 
	 	By:  	/s/  Sarah Freedman
 	 
	 	 	Name:  	Sarah Freedman 	 
	 	 	Title:  	Vice President 	 



[Signature Page to Intercreditor Agreement]



 


 









 







ACKNOWLEDGMENT





Each Borrower and each Guarantor hereby acknowledges that it has received a copy of this
Agreement as in effect on the date hereof and consents thereto, agrees to recognize all rights
granted thereby to the ABL Agent, the ABL Secured Parties, the Term Agent, and the Term Secured
Parties (including pursuant to Section 7.18) and grants the Liens contemplated by Section 3.2
thereof. Each Borrower and each Guarantor further acknowledges and agrees that, except for
amendments for which their consent is required pursuant to Section 7.4, it is not an intended
beneficiary or third party beneficiary under this Agreement and (i) as between the ABL Secured
Parties, the ABL US Borrower and Guarantors, the ABL Documents remain in full force and effect as
written and are in no way modified hereby, and (ii) as between the Term Secured Parties, the Term
Borrowers and Guarantors, the Term Documents remain in full force and effect as written and are in
no way modified hereby.



Without limiting the foregoing, Holdings, the Borrowers and the other Credit Parties consent
to the rights granted to the ABL Secured Parties, and the performance by the Term Agent of the
obligations, set forth in Section 3.6 of this Agreement and acknowledge and agree that neither the
Term Agent nor any other Term Secured Party shall ever be accountable or liable for any action
taken or omitted by the ABL Agent or any other ABL Secured Party or its or any of their officers,
employees, agents successors or assigns in connection therewith or incidental thereto or in
consequence thereof, including any improper use or disclosure of any proprietary information or
other Intellectual Property by the ABL Agent or any other ABL Secured Party or its or any of their
officers, employees, agents, successors or assigns or any other damage to or misuse or loss of any
property of the Credit Parties as a result of any action taken or omitted by the ABL Agent or its
officers, employees, agents, successors or assigns pursuant to, and in accordance with, Section 3.6
of this Agreement.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




[Signature Page to Intercreditor Agreement]



 


 









 







	 	 	 	 	 	 	 	 	 
	 	 	CREDIT PARTIES:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	WARNACO INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jay Dubiner	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Jay Dubiner	 	 
	 

	 	 	 	Title:
	 	Senior Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	THE WARNACO GROUP, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Jay Dubiner	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Jay Dubiner	 	 
	 

	 	 	 	Title:
	 	Senior Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	AUTHENTIC FITNESS ON-LINE, INC.

CALVIN KLEIN JEANSWEAR COMPANY

CCC ACQUISITION CORP.

CKJ HOLDINGS, INC.

DESIGNER HOLDINGS LTD.

OCEAN PACIFIC APPAREL CORP.

WARNACO PUERTO RICO, INC.

WARNACO RETAIL INC.

WARNACO SWIMWEAR INC.

WARNACO SWIMWEAR PRODUCTS INC.

CKU.COM INC.

WARNACO U.S., INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Stanley P. Silverstein	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Stanley P. Silverstein	 	 
	 

	 	 	 	Title:
	 	President and Secretary	 	 






[Signature Page to Intercreditor Agreement]