OR REDEMPTION, COVENANT,
DEFAULT AND REMEDY PROVISIONS CUSTOMARY FOR SENIOR DISCOUNT NOTES OF AN ISSUER
THAT IS THE PARENT OF A BORROWER UNDER SENIOR SECURED CREDIT FACILITIES, AND IN
ANY EVENT, WITH RESPECT TO COVENANT, DEFAULT AND REMEDY PROVISIONS, NO MORE
RESTRICTIVE THAN THOSE SET FORTH IN THE SENIOR SUBORDINATED NOTES DOCUMENTS
TAKEN AS A WHOLE (OTHER THAN PROVISIONS CUSTOMARY FOR SENIOR DISCOUNT NOTES OF A
HOLDING COMPANY); PROVIDED THAT A CERTIFICATE OF A RESPONSIBLE OFFICER DELIVERED
TO THE AGENT AT LEAST FIVE (5) BUSINESS DAYS PRIOR TO THE INCURRENCE OF SUCH
INDEBTEDNESS, TOGETHER WITH A REASONABLY DETAILED DESCRIPTION OF THE MATERIAL
TERMS AND CONDITIONS OF SUCH INDEBTEDNESS OR DRAFTS OF THE DOCUMENTATION
RELATING THERETO, STATING THAT THE BORROWER HAS DETERMINED IN GOOD FAITH THAT
SUCH TERMS AND CONDITIONS SATISFY THE FOREGOING REQUIREMENT SHALL BE CONCLUSIVE
EVIDENCE THAT SUCH TERMS AND CONDITIONS SATISFY THE FOREGOING REQUIREMENT UNLESS
THE AGENT NOTIFIES THE BORROWER WITHIN SUCH FIVE (5) BUSINESS DAY PERIOD THAT IT
DISAGREES WITH SUCH DETERMINATION (INCLUDING A REASONABLE DESCRIPTION OF THE
BASIS UPON WHICH IT DISAGREES); AND PROVIDED, FURTHER, THAT ANY SUCH
INDEBTEDNESS SHALL CONSTITUTE PERMITTED HOLDINGS DEBT ONLY IF BOTH BEFORE AND
AFTER GIVING EFFECT TO THE ISSUANCE OR INCURRENCE THEREOF, NO EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING;
(U) INDEBTEDNESS SUPPORTED BY A LETTER OF CREDIT, IN A PRINCIPAL AMOUNT NOT TO
EXCEED THE FACE AMOUNT OF SUCH LETTER OF CREDIT;
(V) SUBORDINATED INDEBTEDNESS CONSTITUTING DEFERRED PURCHASE PRICE OF, OR
INCURRED TO FINANCE, (I) PERMITTED ACQUISITIONS OR (II) ACQUISITION OF THE
MINORITY INTERESTS IN KATE SPADE LLC AND/OR GURWITCH PRODUCTS LLC IN AN AMOUNT
THAT IS NOT IN EXCESS OF $250,000,000 AT ANY TIME OUTSTANDING; AND
(W) TERM LOAN PARI PASSU LIEN OBLIGATIONS; PROVIDED THAT AT THE TIME OF
INCURRENCE AND AFTER GIVING PRO FORMA EFFECT THERETO, THE CONSOLIDATED SECURED
DEBT RATIO WOULD BE NO GREATER THAN 3.75 TO 1.00.
74
The accrual of interest and the accretion or amortization of original issue
discount on Indebtedness and the payment of interest in the form of additional
Indebtedness originally incurred in accordance with this Section 6.01 will not
constitute an incurrence of Indebtedness.
SECTION 6.02. LIENS.
NO LOAN PARTY WILL, NOR WILL IT PERMIT ANY SUBSIDIARY TO,
CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY LIEN ON ANY PROPERTY OR ASSET NOW
OWNED OR HEREAFTER ACQUIRED BY IT, OR ASSIGN OR SELL ANY INCOME OR REVENUES
(INCLUDING ACCOUNTS RECEIVABLE) OR RIGHTS IN RESPECT OF ANY THEREOF, EXCEPT:
(A) LIENS CREATED PURSUANT TO ANY LOAN DOCUMENT;
(B) PERMITTED ENCUMBRANCES;
(C) ANY LIEN ON ANY PROPERTY OR ASSET OF THE BORROWER OR ANY SUBSIDIARY EXISTING
ON THE DATE HEREOF AND SET FORTH IN SCHEDULE 6.02 AND ANY REPLACEMENTS, RENEWALS
OR EXTENSIONS THEREOF; PROVIDED THAT (I) SUCH LIEN SHALL NOT APPLY TO ANY OTHER
PROPERTY OR ASSET OF THE BORROWER OR SUBSIDIARY OTHER THAN AFTER-ACQUIRED
PROPERTY AFFIXED OR INCORPORATED THERETO AND PROCEEDS OR PRODUCTS THEREOF AND
(II) SUCH LIEN SHALL SECURE ONLY THOSE OBLIGATIONS WHICH IT SECURES ON THE