TO CAUSE EACH OF
ITS SUBSIDIARIES, AS APPLICABLE, TO AMEND AND/OR REAFFIRM ALL PLEDGES AND GRANTS
OF LIENS AND OTHER SECURITY INTERESTS GRANTED BY SUCH PERSON IN CONNECTION WITH
THE EXISTING CREDIT AGREEMENT AND TO TAKE SUCH OTHER ACTIONS AND TO EXECUTE AND
DELIVER SUCH FURTHER DOCUMENTS, INSTRUMENTS OR AGREEMENTS AS IS REASONABLY
DEEMED NECESSARY OR DESIRABLE BY AGENT IN ORDER TO CONTINUE, CREATE, ATTACH,
PERFECT OR OTHERWISE PRESERVE AND PROTECT THE LIENS AND OTHER INTERESTS OF AGENT
(IN ITS OWN RIGHT AS SECURED PARTY UNDER THE LOAN DOCUMENTS AND/OR AS SUCCESSOR
IN INTEREST TO HELLER FINANCIAL, INC.) IN, TO AND UNDER THE BORROWER PLEDGE
AGREEMENT AND THAT CERTAIN AMENDED AND RESTATED PLEDGE AGREEMENT DATED AS OF
NOVEMBER 27, 2002 MADE BY CHEROKEE NETHERLANDS I B.V. WITH RESPECT TO THE STOCK
OF CHEROKEE NETHERLANDS II B.V.
2.9
SUBSIDIARIES.
(A)
ON THE RESTATEMENT EFFECTIVE DATE, WITH
REGARD TO ANY DOMESTIC SUBSIDIARY IN EXISTENCE ON THE RESTATEMENT EFFECTIVE
DATE, AND WITHIN THIRTY (30) DAYS OF
27
THE BORROWER CREATING OR ACQUIRING OR OTHERWISE HAVING ANY OTHER DOMESTIC
SUBSIDIARY, THE BORROWER WILL CAUSE SUCH DOMESTIC SUBSIDIARY TO PROVIDE AND
GRANT TO THE AGENT, FOR THE BENEFIT OF THE LENDERS, A (I) GUARANTY OF THE
OBLIGATIONS, AND (II) FIRST PRIORITY SECURITY INTEREST IN THE REAL, PERSONAL AND
MIXED PROPERTY OF SUCH DOMESTIC SUBSIDIARY, SECURING THE OBLIGATIONS AND SUCH
DOMESTIC SUBSIDIARY'S OBLIGATIONS UNDER SUCH GUARANTY, PROVIDED THAT THE
FOREGOING SHALL NOT BE DEEMED TO REQUIRE A PLEDGE OF MORE THAN SIXTY-FIVE (65%)
OF THE STOCK OF ANY FOREIGN SUBSIDIARY OF SUCH DOMESTIC SUBSIDIARY THAT IS
DIRECTLY OWNED BY SUCH DOMESTIC SUBSIDIARY UNLESS REQUIRED BY PARAGRAPH (B) OF
THIS SECTION 2.9.
(B)
BORROWER HAS HERETOFORE PLEDGED TO AGENT,
FOR THE BENEFIT OF AGENT AND LENDERS, SIXTY-FIVE PERCENT (65%) OF THE CAPITAL
STOCK OF EACH OF ITS FOREIGN SUBSIDIARIES DIRECTLY OWNED BY BORROWER AS OF THE
RESTATEMENT EFFECTIVE DATE.
WITHIN THIRTY (30) DAYS OF THE BORROWER CREATING OR
ACQUIRING OR OTHERWISE HAVING ANY OTHER DIRECTLY OWNED FOREIGN SUBSIDIARY, THE
BORROWER WILL PROVIDE, OR CAUSE TO BE PROVIDED,
TO THE AGENT, FOR THE BENEFIT
OF THE LENDERS, AS SECURITY FOR THE OBLIGATIONS A PERFECTED, FIRST PRIORITY
PLEDGE OF 65% OF THE CAPITAL STOCK (OR SIMILAR EQUITY INTEREST) OF SUCH FOREIGN
SUBSIDIARY.
IF BORROWER OR ANY DOMESTIC SUBSIDIARY CAN, AS A RESULT OF A CHANGE
IN APPLICABLE LAWS, RULES, REGULATIONS AND/OR ORDERS OF ANY GOVERNMENTAL
AUTHORITY AFTER THE RESTATEMENT EFFECTIVE DATE, AT ANY TIME PLEDGE MORE THAN 65%
OF THE CAPITAL STOCK OF ANY FOREIGN SUBSIDIARY AS SECURITY FOR THE OBLIGATIONS,
OR A FOREIGN SUBSIDIARY CAN (I) PLEDGE ANY NOTES ISSUED TO IT BY THE BORROWER OR
ANY OTHER SUBSIDIARY, (II) PLEDGE ALL OR A PORTION OF THE STOCK OF ONE OF ITS
SUBSIDIARIES OR GRANT A SECURITY INTEREST ON ITS ASSETS TO THE AGENT FOR THE
BENEFIT OF THE LENDERS TO SECURE THE OBLIGATIONS, OR (III) GUARANTY THE
OBLIGATIONS, IN EACH CASE WITHOUT CAUSING THE UNDISTRIBUTED EARNINGS OF SUCH
FOREIGN SUBSIDIARY (AS REASONABLY DETERMINED BY BORROWER FOR