Document:

EX-10.1

Exhibit 10.1

SECOND AMENDMENT

          SECOND AMENDMENT, dated as of August 12, 2008 (this “Second Amendment”), to the
Five-Year Credit Agreement, dated as of October 13, 2004, as amended February 20, 2008 (as amended,
supplemented or otherwise modified, the “Credit Agreement”), among LIZ CLAIBORNE, INC., a
Delaware corporation (the “Borrower”), the lenders party thereto (the “Lenders”),
BANK OF AMERICA, N.A., CITIBANK, N.A., SUNTRUST BANK and WACHOVIA BANK, NATIONAL ASSOCIATION, as
syndication agents (the “Syndication Agents”), and JPMORGAN CHASE BANK, N.A., as
administrative agent (the “Administrative Agent”).

W I T N E S S E T H:

          WHEREAS, the Borrower, the Lenders, the Syndication Agents and the Administrative Agent are
parties to the Credit Agreement;

          WHEREAS, the Borrower has requested certain amendments to the Credit Agreement as set forth
herein; and

          WHEREAS, the Required Lenders have consented to the requested amendments as set forth herein;

          NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, the parties hereto hereby agree as follows:

          1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein
which are defined in the Credit Agreement are used herein as therein defined.

          2. Amendments to Section 1.01. Section 1.01 of the Credit Agreement is hereby
amended as follows:

          (a) By inserting the following definitions in appropriate alphabetical order:

          “Asset Coverage Ratio” means, as at the last day of any period, the ratio of (a) the
aggregate of the assets of the Borrower and its Subsidiaries at such date set forth on the
Borrower’s consolidated balance sheet opposite the captions “Cash and cash equivalents,”
“Marketable securities,” “Accounts receivable — trade, net,” and “Inventories, net,” and 35% of
the aggregate of the assets of the Borrower and its Subsidiaries at such date set forth on the
Borrower’s consolidated balance sheet opposite the caption “Property and Equipment, Net” to (b)
Consolidated Total Debt as at such day.

          “Bilateral Agreements” means the agreements listed on Schedule 1.01(a), as such
Schedule may be modified from time to time by the Borrower upon notice to the Administrative Agent;
provided that the aggregate credit lines under the Bilateral Agreements shall not be
increased by more than €40,000,000.

 

 

          “Bilateral Counterparties” means any party to a Bilateral Agreement that is not the
Borrower or an Affiliate thereof.

          “Bilateral Indebtedness” means any Indebtedness of the Borrower under or in respect of
a Bilateral Agreement.

          “Borrower Obligations” means the unpaid principal of and interest on the Loans,
Reimbursement Obligations and Bilateral Indebtedness and all other obligations and liabilities of
the Borrower (including, without limitation, interest thereon accruing at the then agreed rate
after the maturity thereof and interest accruing at the then agreed rate after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) to the Administrative Agent, any Issuing Lender, any Bilateral
Counterparty or any Lender (or, in the case of any Hedging Agreement or Specified Cash Management
Agreement, any Affiliate of any Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, the other Loan Documents, any Letter of Credit, any Hedging
Agreement, any Specified Cash Management Agreement or any Bilateral Agreement or any other document
made, delivered or given in connection with any of the foregoing, in each case whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the Administrative Agent,
to the Issuing Lenders, to the Lenders (or, in the case of any Hedging Agreement or Specified Cash
Management Agreement, to any Affiliate of any Lender) or to the Bilateral Counterparties that are
required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements).

          “Collateral” means all property of the Loan Parties, now owned or hereafter acquired,
upon which a Lien is purported to be created by any Security Document.

          “Commercial Letters of Credit” has the meaning set forth in Section 3.01.

          “Commercial L/C Commitment” means $250,000,000.

          “Commercial L/C Obligations” means at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Commercial Letters of Credit
and (b) the aggregate amount of drawings under Commercial Letters of Credit that have not then been
reimbursed pursuant to Section 3.05.

          “Guarantor Obligations” means, with respect to any Subsidiary Guarantor, all
obligations and liabilities of such Subsidiary Guarantor to the Administrative Agent, any Issuing
Lender, any Lender (or, in the case of any Hedging Agreement or Specified Cash Management
Agreement, any Affiliate of any Lender) or any Bilateral Counterparty which may arise under or in
connection with any Loan Document, any Hedging Agreement, any Specified Cash Management Agreement
or any Bilateral Agreement to which such Subsidiary Guarantor is a party, in each case whether on
account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel to the
Administrative Agent, to the Issuing Lenders, to the Lenders (or, in the case of any Hedging
Agreement or Specified Cash Management Agreement, to any Affiliate of any Lender) or to the
Bilateral Counterparties that are required to be paid by such

 

 

Subsidiary Guarantor pursuant to the terms of any other Loan Document, any Hedging Agreement,
any Specified Cash Management Agreement or any Bilateral Agreement).

          “Principal Offices” means the principal offices of the Borrower, located at One
Claiborne Avenue, North Bergen, NJ 07047.

          “Second Amendment” means the Second Amendment, dated as of August 12, 2008, to this
Agreement.

          “Second Amendment Effective Date” has the meaning set forth in the Second Amendment.

          “Security Documents” has the meaning set forth in Section 6.12(a).

          “Specified Cash Management Agreement” means any agreement providing for treasury,
depositary or cash management services, including in connection with any automated clearing house
transfers of funds or any similar transactions between the Borrower or any Subsidiary Guarantor and
any Lender or Affiliate thereof, which has been designated by such Lender and the Borrower, by
notice to the Administrative Agent not later than 90 days after the execution and delivery by the
Borrower or such Subsidiary Guarantor, as a “Specified Cash Management Agreement”.

          “Springing Lien” has the meaning set forth in Section 6.12(a).

          “Springing Lien Event” means the event that the Leverage Ratio as at the last day of
any fiscal quarter set forth below exceeds the ratio set forth below opposite such fiscal quarter:

	 	 	 
	Fiscal Quarter	 	Leverage Ratio
	6/30/08

	 	3.00:1.00
	9/30/08

	 	3.25:1.00
	12/31/08

	 	2.50:1.00
	3/31/09

	 	2.50:1.00
	6/30/09

	 	2.25:1.00
	9/30/09

	 	2.25:1.00

          “Standby L/C Commitment” means $40,000,000.

          “Standby L/C Obligations” means at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Standby Letters of Credit and
(b) the aggregate amount of drawings under Standby Letters of Credit that have not then been
reimbursed pursuant to Section 3.05.

          “Standby Letters of Credit” has the meaning set forth in Section 3.01(a).

          (b) By amending the definition of “Applicable Rate” by (i) deleting the first paragraph of
and table therein and inserting the following in lieu thereof:

          “Applicable Rate” means, for any day, with respect to any Eurocurrency Revolving Loan,
Euro Reference Rate Revolving Loan, ABR Revolving Loan, Commercial

 

 

Letter of Credit or Standby Letter of Credit, as the case may be, or with respect to the
facility fees payable hereunder, the applicable rate per annum set forth below under the caption
“Eurocurrency Spread,” “ABR/Euro Reference Rate Spread,” “Facility Fee Rate,” “Commercial Letter of
Credit Fee,” or “Standby Letter of Credit Fee,” based upon the ratings by Moody’s and S&P,
respectively, applicable on such date to the Index Debt:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Euro-	 	ABR/Euro	 	Facility	 	Commercial	 	Standby
	 	 	 	 	 	 	currency	 	Reference	 	Fee	 	Letter of	 	Letter of
	Level	 	Rating	 	Spread	 	Spread	 	Rate	 	Credit Fee	 	Credit Fee
	 	I	 	 	BBB+/Baa1
	 	 	1.500	%	 	 	0.750	%	 	 	0.250	%	 	 	0.875	%	 	 	1.750	%
	II	 	BBB/Baa2
	 	 	1.700	%	 	 	1.000	%	 	 	0.300	%	 	 	1.000	%	 	 	2.000	%
	III	 	BBB-/Baa3
	 	 	1.900	%	 	 	1.250	%	 	 	0.350	%	 	 	1.125	%	 	 	2.250	%
	IV	 	BB+/Ba1
	 	 	2.100	%	 	 	1.500	%	 	 	0.400	%	 	 	1.250	%	 	 	2.500	%
	 	V	 	 	BB/Ba2
	 	 	2.300	%	 	 	1.750	%	 	 	0.450	%	 	 	1.375	%	 	 	2.750	%
	VI	 	< BB/Ba2
	 	 	2.500	%	 	 	2.000	%	 	 	0.500	%	 	 	1.500	%	 	 	3.000	%

and (ii) by deleting the last sentence of the definition of “Applicable Rate.”

          (c) By deleting the definition of “Consolidated EBITDA” and inserting in lieu thereof the
following:

          “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period
plus, without duplication and to the extent reflected as a charge in the statement of
Consolidated Net Income for such period, the sum of (a) income or franchise tax expense, (b)
interest expense, both expensed and capitalized, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such period, non-cash losses on
sales of assets outside of the ordinary course of business), (f) any other non-cash charges, and
(g) cash restructuring charges, store closures and other non-recurring cash and non-cash charges,
in each case, related to streamlining and brand exiting related activities, provided that
the amounts referred to in this clause (g) shall not, in the aggregate, exceed (i) for fiscal year
2008, $110,000,000 and (ii) for fiscal year 2009, $10,000,000 and minus, to the extent
included in the statement of Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary, unusual or non-recurring income or gains (including, whether or not
otherwise includable as a separate item in the statement of Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business) and (c) any other
non-cash income, all as determined on a consolidated basis.

          (c) By deleting the definition of “L/C Obligations” and inserting in lieu thereof:

          “L/C Obligations” means at any time, the sum of the Standby L/C Obligations and the
Commercial L/C Obligations.

          (d) By deleting the definitions of “Augmenting Lender”, “L/C Commitment” and “Increasing
Lender.”

 

 

          3. Amendment to Section 2.02. Section 2.02 of the Credit Agreement is hereby amended
by deleting clause (e) thereof.

          4. Amendment to Section 3.01. Section 3.01 of the Credit Agreement is hereby amended
by deleting clause (a) thereof and inserting in lieu thereof the following:

          (a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the
agreements of the other Lenders set forth in Section 3.04(a), agrees to issue letters of credit for
the account of the Borrower on any Business Day during the Availability Period as follows:

A. standby letters of credit (collectively, the “Standby Letters of
Credit”) in a form reasonably satisfactory to the Issuing Lender and in favor of
such beneficiaries as the Borrower shall specify from time to time (which shall be
reasonably satisfactory to the Issuing Lender); and

B. commercial letters of credit in the form of the Issuing Lender’s standard
commercial letters of credit (“Commercial Letters of Credit”) in favor of
sellers of goods or services to the Borrower or its Subsidiaries (the Standby
Letters of Credit and Commercial Letters of Credit being referred to collectively as
the “Letters of Credit”);

provided that no Issuing Lender shall have an obligation to issue any Letter of Credit if,
after giving effect to such issuance, (i) (A) the Standby L/C Obligations would exceed the Standby
L/C Commitment or (B) the Commercial L/C Obligations would exceed the Commercial L/C Commitment or
(ii) the sum of the Revolving Credit Exposures would exceed the total Commitments. Each Letter of
Credit shall be issued under the Dollar Tranche Commitments or the Multi-Currency Commitments or a
combination thereof, as determined by the Borrower in its request for the issuance of such Letter
of Credit pursuant to Section 3.02; provided no Issuing Lender shall have an obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the sum of the Dollar
Tranche Revolving Credit Exposures would exceed the total Dollar Tranche Commitments or (ii) the
sum of the Multi-Currency Tranche Revolving Credit Exposures would exceed the total Multi-Currency
Tranche Commitments. Each Letter of Credit shall (i) be denominated in dollars and (ii) expire no
later than the earlier of (x) (A) in the case of Standby Letters of Credit 365 days after the date
of issuance and (B) in the case of Commercial Letters of Credit 180 days after the date of issuance
and (y) the date that is five Business Days prior to the Maturity Date; provided that any
Letter of Credit with a one-year tenor may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referenced in clause (y) above).

          5. Amendment to Article VI. Article VI of the Credit Agreement is hereby amended by
inserting the following as Section 6.12:

          SECTION 6.12. Grant of Security Interest.

          (a) The Borrower will, and will cause each of the Subsidiary Guarantors to, no later than 15
Business Days after the occurrence of a Springing Lien Event, grant to the Administrative Agent,
for the benefit of the Lenders, Affiliates of Lenders (in the case of Borrower Obligations and/or
Guarantor Obligations under or in respect of Hedging Agreements and/or Specified Cash Management
Agreements) and the Bilateral Counterparties, and take all

 

 

actions necessary or advisable to perfect, a first priority (subject to customary exceptions)
security interest securing the Borrower Obligations or Guarantor Obligations, as applicable (the
“Springing Lien”), in all of the Borrower’s and the Subsidiary Guarantors’ tangible and
intangible assets (including, without limitation, intellectual property, real property and all of
the capital stock of each of its material direct and indirect subsidiaries (limited, in the case of
foreign subsidiaries, to 65% of the capital stock of first tier foreign subsidiaries to the extent
a pledge of a greater percentage could reasonably be expected to result in adverse tax
consequences)), except for those assets as to which the Administrative Agent shall determine in its
sole reasonable discretion that the costs of obtaining such a security interest are excessive in
relation to the value of the security to be afforded thereby; provided that (A) the
Springing Lien shall be granted and perfected pursuant to documentation (including legal opinions
of counsel to the Borrower) substantially in the form that shall be approved by the Administrative
Agent (the “Security Documents”) in its sole discretion, (B) with respect to real property,
the Borrower will, and will cause each of the Subsidiary Guarantors to, grant and perfect the
Springing Lien in accordance with this Section 6.12(a) no later than 30 Business Days after the
occurrence of a Springing Lien Event, (C) to the extent that other existing Indebtedness of the
Borrower is required to be equally and ratably secured with the Indebtedness incurred under this
Agreement, such Indebtedness shall be so secured and (C) the Administrative Agent, on behalf of the
Lenders and the Bilateral Counterparties, shall have the authority to release the Springing Lien on
any assets sold, transferred, leased or otherwise disposed of in a transaction permitted under this
Agreement (including inventory sold in the ordinary course of business). Notwithstanding Section
10.02, the Administrative Agent shall be permitted to make technical changes to the affected
provisions of this Agreement to the extent necessary to implement the provisions of this Section,
without the consent of any other Person.

          (b) With respect to any tangible or intangible assets (including, without limitation,
intellectual property, real property and all of the capital stock of each of its material direct
and indirect subsidiaries (limited, in the case of foreign subsidiaries, to 65% of the capital
stock of first tier foreign subsidiaries to the extent a pledge of a greater percentage could
reasonably be expected to result in adverse tax consequences)) acquired after the Springing Lien
Event by the Borrower or any Subsidiary Guarantor or owned by a Subsidiary that becomes a
Subsidiary Guarantor after the Springing Lien Event, in either case as to which the Administrative
Agent, for the benefit of the Lenders, Affiliates of Lenders (in the case of Borrower Obligations
and/or Guarantor Obligations under or in respect of Hedging Agreements and/or Specified Cash
Management Agreements) and the Bilateral Counterparties, does not have a perfected Lien, the
Borrower will, and will cause each of the Subsidiary Guarantors, to promptly (i) execute and
deliver to the Administrative Agent such amendments to the Security Documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the benefit of the
Lenders, Affiliates of Lenders (in the case of Borrower Obligations and/or Guarantor Obligations
under or in respect of Hedging Agreements and/or Specified Cash Management Agreements) and the
Bilateral Counterparties, a security interest in such property, except for those assets as to which
the Administrative Agent shall determine in its sole reasonable discretion that the costs of
obtaining such a security interest are excessive in relation to the value of the security to be
afforded thereby, and (ii) take all actions necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, Affiliates of Lenders (in the case of Borrower Obligations
and/or Guarantor Obligations under or in respect of Hedging Agreements and/or Specified Cash
Management Agreements) and the Bilateral Counterparties, a perfected first priority security
interest in such property.

 

 

          (c) For the avoidance of doubt, in the event that, subsequent to the occurrence of a
Springing Lien Event, the Leverage Ratio as at the last day of any fiscal quarter does not exceed
the applicable Leverage Ratio for such fiscal quarter in the definition of “Springing Lien Event”,
the obligations of the Borrower and the Subsidiary Guarantors pursuant to this Section 6.12 will
continue in effect, and the Administrative Agent will not be under any obligation to release the
Collateral from the Liens created pursuant to this Section 6.12.

          6. Amendment to Article VII. Article VII of the Credit Agreement is hereby amended
by deleting it in its entirety and inserting in lieu thereof the provisions in Annex I hereto.

          7. Additional Schedules. The Credit Agreement is hereby amended by adding thereto
Schedule 1.01(a) and Schedule 7.05(iii) in the form, respectively, of Schedule 1.01(a) and Schedule
7.05(iii) hereto.

          8. Conditions to Effectiveness of this Amendment. This Second Amendment shall become
effective on and as of the date (such date the “Second Amendment Effective Date”) on which
each of the following conditions are met:

          (a) this Second Amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders; and

          (b) The Administrative Agent shall have received favorable written opinions (addressed to the
Administrative Agent and the Lenders and dated the Second Amendment Effective Date) of (i) Kramer
Levin Naftalis & Frankel LLP, counsel for the Borrower, and (ii) Nicholas J. Rubino, General
Counsel of the Borrower, in each case in form and substance reasonably satisfactory to the
Administrative Agent. The Borrower hereby requests such counsel to deliver such opinion.

          9. Miscellaneous.

          (a) Representation and Warranties. The Borrower hereby represents that as of the
Second Amendment Effective Date each of the representations and warranties made by any Loan Party
in or pursuant to the Loan Documents is true and correct in all material respects as if made on and
as of such date (it being understood and agreed that any representation or warranty that by its
terms is made as of a specific date shall be required to be true and correct in all material
respects only as of such specified date), and no Default or Event of Default has occurred and is
continuing after giving effect to the amendments contemplated herein.

          (b) Effect. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Loan Documents shall remain unamended and not
waived and shall continue to be in full force and effect.

          (c) Counterparts. This Second Amendment may be executed by one or more of the
parties to this Second Amendment on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same instrument. A set of
the copies of this Second Amendment signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.

 

 

          (d) Severability. Any provision of this Second Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          (e) Integration. This Second Amendment and the other Loan Documents represent the
agreement of the Loan Parties, the Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Lender relative to the subject matter hereof or thereof not
expressly set forth or referred to herein or in the other Loan Documents.

          (f) GOVERNING LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed
and delivered by their proper and duly authorized officers as of the day and year first above
written.

	 	 	 	 	 
	 	LIZ CLAIBORNE, INC.

 	 
	 	By:  	/s/ Andrew Warren
 	 
	 	 	Name:  	Andrew Warren 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

 

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, as
Administrative Agent and a Lender

 	 
	 	By:  	/s/ Jules Panno	 
	 	 	Name:  	Jules Panno	 
	 	 	Title:  	Vice President 	 
	 
	 	BANK OF AMERICA, N.A., as Syndication Agent and a

Lender

 	 
	 	By:  	/s/ Thomas Kainamura 	 
	 	 	Name:  	Thomas Kainamura	 
	 	 	Title:  	Vice President	 
	 
	 	CITIBANK, N.A., as Syndication Agent and a Lender

 	 
	 	By:  	/s/ John McQuiston	 
	 	 	Name:  	John McQuiston	 
	 	 	Title:  	Vice President and Director	 

 

 

	 	 	 	 	 
	 	The Bank of Tokyo — Mitsubishi UFJ, Ltd., as a Lender

 	 
	 	By:  	/s/ Lillian Kim
 	 
	 	 	Name:  	Lillian Kim 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication Agent and a Lender

 	 
	 	By:  	/s/ Susan T. Gallagher
 	 
	 	 	Name:  	Susan T. Gallagher 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	COMMERZBANK AG
NEW YORK AND GRAND CAYMAN BRANCHES

 	 
	 	By:  	/s/ Christopher Winthrop
 	 
	 	 	Name:  	Christopher Winthrop 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Jennifer O'Neill
 	 
	 	 	Name:  	Jennifer O'Neill 	 
	 	 	Title:  	Assistant Cashier 	 
	 

	 	 	 	 	 
	 	FORTIS CAPITAL CORP., as a Lender

 	 
	 	By:  	/s/ Elaine Kan
 	 
	 	 	Name:  	Elaine Kan 	 
	 	 	Title:  	Assistant Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Gill Dickson
 	 
	 	 	Name:  	Gill Dickson 	 
	 	 	Title:  	Director 	 
	 

	 	 	 	 	 
	 	THE HUNTINGTON NATIONAL BANK, as a Lender

 	 
	 	By:  	/s/ Steven P. Clemens
 	 
	 	 	Name:  	Steven P. Clemens 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	Israel Discount Bank of New York, as a Lender

 	 
	 	By:  	/s/ James M. Morton
 	 
	 	 	Name:  	James M. Morton 	 
	 	 	Title:  	First Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ David Herzog
 	 
	 	 	Name:  	David Herzog 	 
	 	 	Title:  	First Vice President 	 
	 

	 	 	 	 	 
	 	COMERICA BANK, as a Lender

 	 
	 	By:  	/s/ Sarah R. West
 	 
	 	 	Name:  	Sarah R. West 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	Union Bank of California, N.A., as a Lender

 	 
	 	By:  	/s/ Ching Lim
 	 
	 	 	Name:  	Ching Lim 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	HSBC Bank USA N.A., as a Lender

 	 
	 	By:  	/s/ Kyu Hwang
 	 
	 	 	Name:  	Kyu Hwang 	 
	 	 	Title:  	Senior Vice President 	 
	 

	 	 	 	 	 
	 	US Bank, N.A., as a Lender

 	 
	 	By:  	/s/ Frances W. Josephic
 	 
	 	 	Name:  	Frances W. Josephic 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	ING BANK N.V., Amsterdam, as a Lender

On the condition that the 2nd quarter results of 2008 will not deviate materially from what has been communicated to the Lender via the Agent in the Liz Leverage Cushion Calculations — Quarterly (projections as of July 16, 2008).

 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Marianne Elfrink-Rijntjes
 	 
	 	 	Name:  	Marianne Elfrink-Rijntjes 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Arnold Esser
 	 
	 	 	Name:  	Arnold Esser 	 
	 	 	Title:  	Managing Director 	 
	 

	 	 	 	 	 
	 	The Bank of New York Mellon, as a Lender

 	 
	 	By:  	/s/ David B. Wirl
 	 
	 	 	Name:  	David B. Wirl 	 
	 	 	Title:  	Vice President 	 
	 

 

 

ANNEX I

ARTICLE VII

Negative Covenants

          Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated or been cancelled, the Borrower covenants and agrees with the Lenders that:

          SECTION 7.01. Financial Covenants.

          (a) Leverage Ratio. The Borrower will not permit the Leverage Ratio as at the last
day of any fiscal quarter set forth below to exceed the ratio set forth below opposite such fiscal
quarter.

	 	 	 
	Fiscal Quarter	 	Leverage Ratio
	6/30/08

	 	3.25:1.00
	9/30/08

	 	3.50:1.00
	12/31/08

	 	2.75:1.00
	3/31/09

	 	2.75:1.00
	6/30/09

	 	2.75:1.00
	9/30/09

	 	2.75:1.00

          (b) Fixed Charge Coverage Ratio. The Borrower will not permit the Fixed Charge
Coverage Ratio for any period of four consecutive fiscal quarters of the Borrower to be less than
1.75 to 1.00.

          (c) Asset Coverage Ratio. The Borrower will not permit the Asset Coverage Ratio as
at the last day of any fiscal quarter set forth below to be less than the ratio set forth below
opposite such fiscal quarter:

	 	 	 
	Fiscal Quarter	 	Asset Coverage Ratio
	6/30/08

	 	1.00:1.00
	9/30/08

	 	1.10:1.00
	12/31/08

	 	1.10:1.00
	3/31/09

	 	1.10:1.00
	6/30/09

	 	1.10:1.00
	9/30/09

	 	1.10:1.00

          SECTION 7.02. Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

          (a) Indebtedness created hereunder or under the Subsidiary Guarantees;

          (b) Indebtedness existing on the date hereof and set forth in Schedule 7.02;

          (c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or
any other Subsidiary;

 

 

          (d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of
Indebtedness of the Borrower or any other Subsidiary;

          (e) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital Lease Obligations and
any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien
on any such assets prior to the acquisition thereof, provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of such construction
or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e)
shall not exceed $150,000,000 at any time outstanding;

          (f) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists or is committed at the time such Person becomes
a Subsidiary and is not created in contemplation of or in connection with such Person becoming a
Subsidiary and (ii) the Borrower and its Subsidiaries are in compliance, on a pro
forma basis after giving effect to such acquisition, with the covenants contained in
Section 7.01 recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available, as if such acquisition had occurred on the
first day of each relevant period for testing such compliance;

          (g) Indebtedness of the Borrower or any Subsidiary incurred (a) as an account party in
respect of trade letters of credit issued in the ordinary course of business and (b) in connection
with standby letters of credit in an aggregate principal amount not exceeding $40,000,000 at any
time outstanding;

          (h) Indebtedness of the Borrower or any Subsidiary in respect of commercial paper;
provided that the aggregate amount of such Indebtedness, when added to the aggregate amount
of outstanding Loans and L/C Obligations, shall not exceed the aggregate amount of the Commitments;

          (i) Subordinated Indebtedness;

          (j) any refinancings, refundings, renewals or extensions of Indebtedness permitted hereunder
that do not increase the outstanding principal amount of such Indebtedness;

          (k) additional Indebtedness not otherwise permitted hereunder secured by Liens and not
exceeding $25,000,000 in aggregate principal amount at any time outstanding;

          (l) Indebtedness not otherwise permitted hereunder, not secured by any Lien and incurred
after the date hereof and not exceeding $50,000,000 in aggregate principal amount at any time
outstanding; provided that the Borrower and its Subsidiaries are in compliance, on a pro
forma basis after giving effect to such Indebtedness, with the covenants contained in
Section 7.01 recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available, as if such Indebtedness had been incurred on
the first day of each relevant period for testing such compliance;

          (m) Indebtedness under or in respect of Bilateral Agreements; and

          (n) Indebtedness of the Borrower incurred as a result of a mortgage, sale and leaseback or
similar transaction with respect to the Principal Offices.

 

 

          SECTION 7.03. Liens. The Borrower will not, and will not 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) Permitted Encumbrances;

          (b) any Lien on any property or asset of the Borrower or any Subsidiary existing on the date
hereof and set forth in Schedule 7.03; provided that (i) such Lien shall not apply to any
other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

          (c) Liens arising by the terms of letters of credit entered into in the ordinary course of
business to secure reimbursement obligations and other obligations in connection therewith;

          (d) Liens solely constituting the right of any other Person to a share of any licensing
royalties (pursuant to a licensing agreement or other related agreement entered into by the
Borrower or any of its Subsidiaries with such Person in the ordinary course of the Borrower’s or
such Subsidiary’s business) otherwise payable to the Borrower or any of its Subsidiaries;
provided that such right shall have been conveyed to such Person for consideration received
by the Borrower or such Subsidiary on an arm’s-length basis;

          (e) Liens arising by reason of any judgment, decree or order of any court or other
Governmental Authority for the payment of money in aggregate amount not to exceed $35,000,000 in
any fiscal year at any time outstanding;

          (f) Liens arising in connection with factoring accounts receivable related to any acquired
Subsidiary; provided that such factoring shall not continue for a period longer than one
year from the date such Subsidiary is acquired;

          (g) any Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not
apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;

          (h) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any
Subsidiary; provided that (i) such security interests secure Indebtedness permitted by
clause (e) of Section 7.02, (ii) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the completion of such construction
or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of
acquiring, constructing or improving such fixed or capital assets and (iv) such security interests
shall not apply to any other property or assets of the Borrower or any Subsidiary;

 

 

          (i) Liens securing Indebtedness permitted under Sections 7.02(j), 7.02(k) and 7.02(n);
provided that with respect to Indebtedness incurred pursuant to Section 7.02(j) no such
Lien is spread to cover additional property;

          (j) any Springing Liens; and

          (k) Liens granted to secure other existing Indebtedness of the Borrower if required to be
granted due to the grant of a Springing Lien.

          SECTION 7.04. Fundamental Changes. Except in connection with transactions otherwise
permitted pursuant to Section 7.05 or 7.06, the Borrower will not, and will not permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) all or substantially all of its assets, or all or substantially all
of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately after giving effect
thereto, no Default shall have occurred and be continuing (i) any Person may merge into the
Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Person may
merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and, if
required to be so under Section 6.10, a Subsidiary Guarantor, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary which
is a Subsidiary Guarantor and (iv) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 7.05.

          SECTION 7.05. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging
Agreements. (a) The Borrower will not, and will not permit any of its Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly
owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the foregoing) of, make
or permit to exist any loans or advances to, guarantee any obligations of, or make or permit to
exist any investment or any other interest in, any other Person, or purchase or otherwise acquire
(in one transaction or a series of transactions) any assets of any other Person constituting a
business unit, except:

     (i) existing investments not otherwise permitted under this Agreement and described in
Schedule 7.05(i) hereto;

     (ii) investments made in accordance with the investment policy of the Borrower as set
forth on Schedule 7.05(ii) hereto; as provided that any material amendment or other
material modification to such policy is subject to the approval of the Administrative Agent
in its reasonable discretion;

     (iii) investments by the Borrower in the capital stock of its Subsidiaries;

     (iv) Permitted Acquisitions not to exceed in any period of four consecutive fiscal
quarters (A) $100,000,000, or (B) if the Leverage Ratio as at the last day of any two
consecutive fiscal quarters is less than 1.50:1.00, $200,000,000.

 

 

     (v) investments received in connection with the bona fide settlement of any defaulted
Indebtedness or other liability owed to the Borrower or any Subsidiary;

     (vi) advances or loans made in the ordinary course of business to employees of the
Borrower or any of its Subsidiaries in an aggregate amount not to exceed $10,000,000 at any
time outstanding;

     (vii) loans or advances to third party contractors, suppliers or customers in the
ordinary course of business and consistent with past practice;

     (viii) loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary;

     (ix) guarantees by the Borrower or any Subsidiary of obligations of the Borrower or
any other Subsidiary which do not constitute Indebtedness;

     (x) Guarantees constituting Indebtedness permitted by Section 7.02; and

     (xi) any other investments in, advances or loans to or Guarantees of, any Person in an
aggregate amount not to exceed $75,000,000 at any time outstanding; provided that
such amount may be increased by $20,000,000 in connection with the joint venture described
in Schedule 7.05(iii).

          (b) The Borrower will not, and will not permit any of its Subsidiaries to, enter into any
Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business
(including, without limitation, Hedging Agreements in connection with the Borrower’s stock
repurchase program) to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed
in the conduct of its business or the management of its liabilities.

          SECTION 7.06. Limitation on Sale of Assets. Except in the ordinary course of
business, the Borrower will not, and will not permit any of its Subsidiaries to, sell, convey,
lease, transfer or otherwise dispose of (other than as otherwise permitted by Section 7.04 or 7.05)
all or any substantial part of its assets; provided that the foregoing shall not prohibit
any such sale, conveyance, lease, transfer or disposition (i) which (x) is for a price not
materially less than the fair market value of such assets of the Borrower or such Subsidiary, (y)
would not materially impair the ability of the Borrower to perform its obligations under this
Agreement and (z) together with all other such sales, conveyances, leases, transfers and
dispositions, would have no Material Adverse Effect, (ii) of assets that individually or in the
aggregate constitute less than 10% of the total assets of the Borrower and its Subsidiaries taken
as a whole or (iii) of assets in connection with factoring arrangements with respect to any
acquired Subsidiary, provided that such factoring arrangements do not continue longer than
a year after such Subsidiary is acquired by the Borrower.

          SECTION 7.07. Restricted Payments. The Borrower will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except (a) the Borrower may declare and pay dividends with respect to its
capital stock payable solely in additional shares of its common stock, (b) so long as no Default or
Event of Default has occurred and is continuing, the Borrower may declare and pay quarterly cash
dividends with respect to its capital stock not in excess of $0.06 per share, (c) any Subsidiary
may declare and pay dividends to the Borrower or, in the case of any Subsidiary that

 

 

is wholly owned by another Subsidiary, to such other Subsidiary, (d) the Borrower may make
Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans
for management or employees of the Borrower and its Subsidiaries, (e) so long as no Default or
Event of Default has occurred and is continuing, the Borrower may repurchase its capital stock
pursuant to its stock repurchase program; provided that such repurchases shall not exceed
$25,000,000 in any fiscal year, and (f) so long as no Default or Event of Default has occurred and
is continuing, the Borrower may repurchase its capital stock and declare and pay dividends with
respect to its capital stock; provided that, for any period of four consecutive fiscal
quarters, such capital stock repurchases and dividends shall not in the aggregate exceed 50% of
Consolidated Net Income for such period of four consecutive fiscal quarters.

          SECTION 7.08. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among
the Borrower and its Subsidiaries not involving any other Affiliate and (c) any Restricted Payment
permitted by Section 7.07.

          SECTION 7.09. Changes in Fiscal Periods. The Borrower will not, and will not permit
any of its Subsidiaries to, permit the fiscal year of such Borrower to end on a day other than the
last Saturday closest to December 31 or change such Borrower’s method of determining fiscal
quarters.

          SECTION 7.10. Lines of Business. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any business, either directly or through any Subsidiary, except for
Permitted Lines of Business.

          SECTION 7.11. Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Borrower or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, to secure its obligations under the Loan
Documents to which it is a party other than (a) this Agreement and the other Loan Documents and (b)
any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted
hereby (in which case, any prohibition or limitation shall only be effective against the assets
financed thereby).

 

 

Schedule 1.01(a)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding	 	 	 	 	 
	Mexx Credit Lines	 	 	 	 	 	Credit Lines	 	 	 	 	 	 	U.S.$ Credit Lines	 	 	as of 8/2/08	 	 	 	 	 
	Ing Bank
	 	euro	 	 	21,000,000	 	 	 	 	 	 	 	 	 	 	 	16,390,000	 	 	 	 	 
	HSBC
	 	euro	 	 	15,000,000	 	 	 	 	 	 	 	 	 	 	 	14,080,000	 	 	 	 	 
	HSBC — UK LCE
	 	euro	 	 	2,410,000	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 
	Fortis Bank
	 	euro	 	 	26,000,000	 	 	 	 	 	 	 	 	 	 	 	16,000,000	 	 	 	 	 
	Citibank
	 	euro	 	 	20,000,000	 	 	 	 	 	 	 	 	 	 	 	16,930,000	 	 	 	 	 
	Citibank
	 	euro	 	 	9,500,000	 	 	 	 	 	 	 	 	 	 	 	100,000	 	 	 	 	 
	Artesia Bank
	 	euro	 	 	0	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 
	Commerzbank
	 	euro	 	 	2,000,000	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 
	HSBC HK
	 	euro	 	 	6,320,000	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 
	Bank Austria
	 	euro	 	 	20,000	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 
	Other
	 	 	 	 	 	 	0	 	 	 	 	 	 	 	 	 	 	 	0	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1.5553
	 	 	 	 	 	€	102,250,000	 	 	 	 	 	 	$	159,029,425	 	 	€	63,500,000	 	 	$	98,761,550	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Liz Claiborne Canada
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HSBC — Canada
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	@
	 	 	1.0273	 	 	 	5,000,000	 	 	CAD	 	$	4,867,127	 	 	CAD 0	 	$	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	Lines	$	163,896,552	 	 	Total Debt	 	 	$	98,761,550	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	L/C Standby Credit Lines
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Lines	 	 	 	 	 	outstanding
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HSBC
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	15,250,000	 	 	 	 	 	 	$	14,364,758	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Outstanding
	L/C Credit Lines
	 	 	 	 	 	 	 	 	 	 	 	 	 	$ Credit Lines	 	 	 	 	 	as of 8/2/08
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Wachovia Bank
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	75,000,000	 	 	 	 	 	 	$	52,369,691	 
	Bank of America
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	75,000,000	 	 	 	 	 	 	$	47,913,699	 
	Huntington National Bank
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	50,000,000	 	 	 	 	 	 	$	33,635,158	 
	JP Morgan Chase
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	85,000,000	 	 	 	 	 	 	$	33,191,311	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	285,000,000	 	 	 	 	 	 	$	167,109,860	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Note: Mexx has o/s LCs = $13.4mm
and o/s Standby LCs = $11.1mm. 

The credit lines for these facilities are part of the Euro 102.25mm above.

Synthetic Lease — Ohio & RI Distribution Centers	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SunTrust Bank
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	19,000,000	 
	US Bank
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	13,806,207	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	32,806,207	 

 

 

Schedule 7.05(iii)

Kate Spade Joint Venture — The Borrower is planning to enter into a joint venture with a
Japanese partner to pursue business opportunities for the Kate Spade brand in Japan. It is expected
to be set up as an independent legal entity owned by Kate Spade and the Japanese partner.EX-10.1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT (with term period)

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective (DATE), 2008, by and between
(Executive) (“Executive”) and ABM Industries Incorporated, a Delaware corporation (“Company” or
“ABM”).

	1.	 	EMPLOYMENT.In consideration of the terms and commitments contained in this agreement, Executive
agrees to and acknowledges the following:
	 
	2.	 	TERM, RESPONSIBILITIES AND TITLE. This agreement shall end on [Month] 31, 200_, unless sooner terminated pursuant to
Section 7 (“Initial Term”). Employment may be extended pursuant to Section 6 (“Extended
Term”). Executive shall assume and perform such duties, functions and responsibilities
relating to Executive’s employment with Company as may be assigned from time to time by the
Company. Executive’s title shall be (Title) of Company, subject to modification as
determined by the Company’s Board of Directors (“Board”).
	 
	3.	 	COMPENSATION. Company agrees to compensate Executive, and Executive agrees to accept as compensation
in full, a base salary. Employee will also be eligible for short-term incentive awards
pursuant to the terms of the Performance Incentive Program (“Bonus”), to participate in the
2006 Equity Incentive Program and for such perquisites as are from time to time received by
similarly situated executives.
	 
	4.	 	COMPLIANCE WITH LAWS AND POLICIES. Executive shall dedicate his/her full business time and attention to the performance of
duties hereunder, perform his/her duties in good faith and to a professional standard, and
fully comply with all laws and regulations pertaining to the performance of this Agreement,
all ethical rules, ABM’s Code of Business Conduct and Ethics as well as any and all of
policies, procedures and instructions of Company. [including but not limited to the
provisions of Section 304 of the Sarbanes-Oxley Act of 2002. (CFO and CEO only). ]
	 
	5.	 	RESTRICTIVE COVENANTS. In consideration of the compensation, contract term, potential Severance Benefits,
continued employment provided by Company, and access to Proprietary Information, as
defined below, necessary to the performance of Executive’s duties hereunder, Executive
hereby agrees to the following during his/her employment and thereafter as provided:

	 	5.1	 	NON-DISCLOSURE. Except in the proper performance of this Agreement, Executive
agrees to hold all Proprietary Information in the strictest confidence, and to refrain
from making any unauthorized use or disclosure of such 

 

 

	 	 	 	information both during
Executive’s employment and at all times thereafter. Executive shall not directly or
indirectly disclose, reveal, transfer or deliver to any other person or business, any
Proprietary Information which was obtained directly or indirectly by Executive from, or
for, Company or by virtue of Executive’s employment with Company. “Proprietary
Information” means Company’s trade secrets, ideas, processes and other confidential
information not generally known that could have value to a third party such as plans
for business development, marketing, business plans, budgets and financial statements
of any kind, costs and suppliers, and information regarding the skills and compensation
of other employees of the Company or employees of any company that contracts to provide
services to the Company. Proprietary Information also includes information of third
parties to which Executive had access by virtue of employment with the Company,
including, but not limited to, information regarding customers such as: (i) the
identity of Company’s customers, customer contacts, and sales prospects; (ii) the
nature, extent, frequency, methodology, cost, price and profit associated with services
and products purchased by customers from Company; (iii) the names, office hours,
telephone numbers and street addresses of its purchasing agents or other buyers or
customer contacts; (iv) Company and customer billing procedures; (v) Company and
customer credit limits and payment practices; (vi) Company and customer organizational
structure; and (vii) any information related to past, current or future acquisitions
between Company or Company-affiliated entities including Company information used or
relied upon for said acquisition.

	 	5.2	 	NON-SOLICITATION OF EMPLOYEES. Executive acknowledges and agrees that during
the course of Executive’s employment with Company, Executive will come into contact
with Company employees and acquire information regarding their knowledge, skills,
abilities, salaries, commissions, benefits, and other matters that are not generally
known to the public. Executive further acknowledges and agrees that hiring,
recruiting, soliciting, or inducing the termination of such employees will be
detrimental and harmful to Company’s business. Accordingly, Executive agrees that
while employed by Company and for a period of one year following the termination of
Executive’s employment (whether termination is voluntary or involuntary), Executive
will not directly or indirectly solicit, hire, recruit or otherwise encourage or
arrange for any executive or employee to terminate employment with Company or any other
Company-affiliated entity except in the proper performance of this Agreement. This
prohibition against solicitation shall include but not be limited to: (i) identifying
to other employers or their agents, recruiting or staffing firms, or other third
parties the Company employee(s) who have specialized knowledge concerning
inventions, processes, methods, or other confidential affairs or who have contacts,
experience, or relationships with particular customers; (ii) disclosing or
commenting to other employers or their agents, recruiting or staffing firms, or
other third parties regarding the quality or quantity of work, specialized
knowledge, or personal characteristics of any person still employed by Company or
any other Company-affiliated entity; and (iii) providing such information to

2

 

	 	 	 	prospective employers or their agents, recruiting or staffing firms, or other third
parties preceding possible employment.

	 	5.3	 	NON-SOLICITATION OF CUSTOMERS. Executive agrees that during and for one year
following the termination of Executive’s employment with Company (whether such
termination is voluntary or involuntary), Executive shall not, directly or indirectly,
for the benefit of any person or entity other than the Company, seek, solicit, divert,
take away, obtain or accept work from any customer or prospective customer. In
addition, Executive agrees that at all times after the voluntary or involuntary
termination of Executive’s employment, Executive shall not seek, solicit, divert, take
away, obtain, or accept work from of any customer or sales prospect of Company or any
other Company-affiliated entity through the direct or indirect use of any Proprietary
Information or by any other unfair or unlawful business practice.
	 
	 	5.4	 	POST EMPLOYMENT COMPETITION. Executive agrees that while employed by Company
and, to the fullest extent allowed by law, for a period of one year following
Executive’s termination of employment (whether such termination is voluntary or
involuntary), Executive shall not engage in any business activity which competes
directly or indirectly with the Company or the operations of any Company-affiliated
entity regarding which Executive had information or knowledge. The Executive
acknowledges that the Company and its subsidiaries are engaged in business in various
states throughout the U.S. and that the Company intends to expand the geographic scope
of its activities. Accordingly and in view of the nature of Executive’s position and
responsibilities, the Executive agrees that the provisions of this Section shall be
applicable to each state and each foreign country in which the Company may be engaged
in business within the twelve-month period preceding the effective date of Executive’s
termination of employment. [This Section 5.4 shall not apply if the State of Employment
is California].
	 
	 	5.5	 	NON-DISPARAGEMENT. During Executive’s employment with Company and thereafter,
Executive agrees not to make any statement or take any action which disparages,
defames, or places in a negative light Company, Company-affiliated entities, or its or
their reputation, goodwill, commercial interests or past and present officers,
directors and employees.
	 
	 	5.6	 	COOPERATION WITH LEGAL MATTERS. During Executive’s employment with Company and
thereafter, Executive shall cooperate with Company and any Company-affiliated entity in
its or their investigation, defense or prosecution of any potential, current or future
legal matter in any forum, including but not limited to lawsuits, administrative
charges, audits, arbitrations, and internal and external investigations. Executive’s
cooperation shall include, but is not limited to, reviewing and preparing documents and
reports, meeting with attorneys 

3

 

	 	 	 	representing any Company-affiliated entity, providing
truthful testimony, and communicating Executive’s knowledge of relevant facts to any
attorneys, experts, consultants, investigators, employees or other representatives
working on behalf of an Company-affiliated entity. Except as required by law,
Executive agrees to treat all information regarding any such actual or potential
investigation or claim as confidential. Executive also agrees not to discuss or assist
in any litigation, potential litigation, claim, or potential claim with any individual
(or their attorney or investigator) who is pursuing, or considering pursuing, any
claims against the Company or an Company-affiliated entity unless required by law. In
performing the tasks outlined in this Section 5.6, Executive shall be bound by the
covenants of good faith and veracity set forth in ABM’s Code of Business Conduct and
Ethics and by all legal obligations. Nothing herein is intended to prevent Executive
from complying in good faith with any subpoena or other affirmative legal obligation.
Executive agrees to notify the Company immediately in the event there is a request for
information or inquiry pertaining to the Company, any Company-affiliated entity, or
Executive’s knowledge of or employment with the Company. In performing
responsibilities under this Section, Executive shall be compensated for Executive’s
time at an hourly rate of $250 per hour. However, during any period in which Executive
is an employee of ABM or is receiving payments pursuant to this Agreement or pursuant
to the terms of any other ABM plan, Executive shall not be so compensated.

	 	5.7	 	REMEDIES AND DAMAGES. The parties agree that compliance with
Sections 5.1 –
5.6 of the Agreement is necessary to protect the business and goodwill of Company, that
the restrictions contained herein are reasonable and that any breach of this Section
will result in irreparable and continuing harm to Company, for which monetary damages
may not provide adequate relief. Accordingly, in the event of any actual or threatened
breach of this Section by Executive, Company and Executive agree that Company shall be
entitled to all appropriate remedies, including temporary restraining orders and
injunctions enjoining or restraining such actual or threatened breach. Executive
hereby consents to the issuance thereof forthwith by any court of competent
jurisdiction.
	 
	 	5.8	 	LIMITATIONS. Nothing in this Agreement shall be binding upon the parties to
the extent it is void or unenforceable for any reason in the State of Employment,
including, without limitation, as a result of any law regulating competition or
proscribing unlawful business practices.

	6.	 	EXTENSION OF EMPLOYMENT.

	 	6.1	 	RENEWAL. Absent at least 60 days written notice of termination of employment
or notice of non-renewal from Company to Executive prior to expiration of the then
current Initial or Extended Term, as applicable, of this Agreement,

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	 	 	 	employment
hereunder shall continue for an Extended Term (or another Extended Term, as applicable)
of one year.

	 	6.2	 	NOTICE OF NON-RENEWAL. In the event that notice of non-renewal is given 60
days prior to the expiration of the then Initial or Extended Term, as applicable, of
this Agreement, employment shall continue on an “at will” basis following the
expiration of such Initial or Extended Term. In such event, Company shall have the
right to terminate Executive’s employment, position or compensation. Executive shall
remain eligible for Severance Benefits pursuant to ABM’s Severance Policy.

	7.	 	TERMINATION OF EMPLOYMENT.

	 	7.1	 	TERMINATION FOR CAUSE. Company may terminate Executive’s employment hereunder
at any time without notice subject only to a good faith determination by the Board of
Cause. “Cause” means the occurrence of one of the following: (i) serious misconduct,
dishonesty, disloyalty, or insubordination; (ii) Executive’s conviction (or entry of a
plea bargain admitting criminal guilt) of any felony or a misdemeanor involving moral
turpitude; (iii) drug or alcohol abuse, that has a material or potentially material
effect on the Company’s reputation and/or on the performance of Executive’s duties and
responsibilities under this Agreement; (iv) failure to substantially perform
Executive’s duties and responsibilities under this Agreement for reasons other than
death or Disability, as defined below; (v) repeated inattention to duty for reasons
other than death or Disability; and, (vi) any other material breach of this Agreement
by Executive. In the event of a termination following the Board’s good faith
determination of Cause, employee shall receive no Severance Benefits.
	 
	 	7.2	 	VOLUNTARY TERMINATION BY EXECUTIVE. At any time, Executive may terminate
employment hereunder by giving Company 60 days prior written notice. Executive may
terminate employment upon such shorter period of notice as may be reasonable under the
circumstances. For a voluntary termination for reasons other than the Executive’s
Disability, Executive will not receive any prorated Bonus.
	 
	 	7.3	 	DISABILITY OR DEATH. Employment hereunder shall automatically terminate upon
the death of Executive and may be terminated at the Company’s discretion
as a result of Executive’s Disability. “Disability” means Executive’s substantial
inability to perform Executive’s essential duties and responsibilities under this
Agreement for either 90 consecutive days or a total of 120 days out of 365
consecutive days as a result of a physical or mental illness, injury or impairment,
all as determined in good faith by the Company. Upon termination due to death or
Disability, Company shall pay when due to Executive, or, upon death, 

5

 

	 	 	 	Executive’s
designated beneficiary or estate, as applicable, any and all previously earned, but
as yet unpaid, salary, and reimbursement of business expenses which would have
otherwise been payable to Executive under this Agreement, through the end of the
month in which Disability or death occurs. In the event of termination due to death
or Disability, Company shall pay to Executive, or, in the event of death, to
Executive’s designated beneficiary or estate, as applicable, a prorated Bonus based
on the length of performance in the applicable performance period prior to
Disability or death. Any prorated Bonus payable under this paragraph shall be paid
at the end of the applicable performance period when such payments are made to other
participants and in accordance with the terms of the applicable plan or program.
Executive shall not be eligible for any vesting of equity compensation after the
Executive’s termination date, except as pursuant to the 1996 and 2002 Price-Vested
Stock Option plans.

	 	7.4	 	TERMINATION WITHOUT CAUSE. Company may terminate Executive’s employment
hereunder without Cause at any time during the then-current Initial or Extended Term of
this Agreement, as applicable, by giving Executive 90 days written notice. Upon such
termination without Cause, Executive’s right to severance benefits, if any, shall be
governed by the terms of the ABM Severance Policy or any policy or plan of the Company
as in effect from time to time that provides for payment of severance amounts upon such
a termination of employment (“Severance Benefits”). Executive must execute a full
release of all claims within 60 days following termination of employment in order to be
eligible for Severance Benefits.
	 
	 	7.5	 	CONDITIONS TO PAYMENT AND ACCELERATION; CODE SECTION 409A. Notwithstanding
anything contained herein to the contrary, Executive shall not be considered to have
terminated employment with the Company for purposes of this Agreement and no payments
shall be due to Executive under this Agreement or any policy or plan of the Company as
in effect from time to time, providing for payment of amounts on termination of
employment unless Executive would be considered to have incurred a “separation from
service” from the Company within the meaning of Section 409A. To the extent required
in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts
that would otherwise be payable and benefits that would otherwise be provided pursuant
to this Agreement during the six-month period immediately following Executive’s
termination of employment shall instead be paid on the first business day after the
date that is six months following Executive’s termination of employment (or upon
Executive’s death, if earlier).
	 
	 	7.6	 	EXCESS PARACHUTE PAYMENTS. Subject to a Severance Agreement between Executive
and the Company approved by the Board of Directors or the Compensation Committee of ABM
Industries Incorporated, if any amount or benefit to be paid or provided under the ABM
Severance Policy, an equity award, 

6

 

	 	 	 	and/or any other agreement between Executive and the
Company would be an Excess Parachute Payment but for the application of this sentence,
then the payments and benefits to be paid or provided under the Severance Program,
equity award, and/or any other agreement will be reduced to the minimum extent
necessary (but in no event to less than zero) so that no portion of any such payment or
benefit, as so reduced, constitutes an Excess Parachute Payment; provided, however,
that the foregoing reduction will not be made if such reduction would result in
Executive receiving an amount determined on an after-tax basis, taking into account the
excise tax imposed pursuant to Section 4999 of the Code, or any successor provision
thereto, any tax imposed by any comparable provision of state law and any applicable
federal, state and local income and employment taxes (the “After-Tax Amount”) less than
90% of the After-Tax Amount of the severance payments Executive would have received
under the Company’s Severance Policy or under any other agreement without regard to
this clause. Whether requested by the Executive or the Company, the determination of
whether any reduction in such payments or benefits to be provided under this Agreement
or otherwise is required pursuant to the preceding sentence, and the value to be
assigned to the Executive’s covenants in Section 5 hereof for purposes of determining
the amount, if any, of the “excess parachute payment” under Section 280G of the Code
will be made at the expense of the Company by the Company’s independent accountants or
benefits consultant. The fact that Executive’s right to payments or benefits may be
reduced by reason of the limitations contained in this paragraph will not of itself
limit or otherwise affect any other rights of Executive under any other agreement. In
the event that any payment or benefit intended to be provided is required to be reduced
pursuant to this paragraph, Executive will be entitled to designate the payments and/or
benefits to be so reduced in order to give effect to this paragraph, provided, however,
that payments that do not constitute deferred compensation within the meaning of
Section 409A will be reduced first. The Company will provide Executive with all
information reasonably requested by Executive to permit Executive to make such
designation. In the event that Executive fails to make such designation within 10
business days after receiving notice from the Company of a reduction under this
paragraph, the Company may effect such reduction in any manner it deems appropriate.
The term “Excess Parachute Payment” as used in this paragraph means a payment that
creates an obligation for Executive to pay excise taxes under Section 280G of the
Internal Revenue Code of 1986, as amended, or any successor statute.

	 	7.7	 	ACTIONS UPON TERMINATION. Upon termination of employment hereunder, Executive
shall immediately resign as an officer and/or director of Company and of any Company
subsidiaries or affiliates, including any LLCs or joint ventures, as applicable. At
Company’s request, Executive also agrees to resign from the
board of any Taft-Hartley trust fund joined during Executive’s employment with
Company. Executive shall promptly return and release all Company property and
Proprietary Information, in all forms, in Executive’s possession to Company.
Company shall pay Executive when due any and all previously earned, but as yet

7

 

	 	 	 	unpaid, salary and reimbursement of business expenses submitted in accordance with
Company policy as in effect. Except as provided in Sections 7.3 and 7.4, Executive
must be employed by the Company at the end of the Fiscal Year to earn a Bonus.

	 	7.8	 	WITHHOLDING AUTHORIZATION. To the fullest extent permitted under the laws of
the State of Employment hereunder, Executive authorizes Company to withhold from any
Severance Benefits otherwise due to Executive and from any other funds held for
Executive’s benefit by Company, any damages or losses sustained by Company as a result
of any material breach or other material violation of this Agreement by Executive,
pending resolution of any underlying dispute.

	8.	 	NOTICES.

	 	8.1	 	ADDRESSES. Any notice required or permitted to be given pursuant to this
Agreement shall be in writing and delivered in person, or sent prepaid by certified
mail, overnight express, or electronically to the party named at the address set forth
below or at such other address as either party may hereafter designate in writing to
the other party:

	 	 	 	 	 
	 

	 	Executive:
	 	(Executive Name)
	 

	 	 	 	(Home Address)
	 

	 	 	 	(City, ST Zip)
	 

	 	 	 	Email: (email)
	 
	 	 	 	 
	 

	 	Company:
	 	(Legal Company Name)
	 

	 	 	 	551 Fifth Avenue, Suite 300
	 

	 	 	 	New York, New York 10176
	 

	 	 	 	Attention: Chief Executive Officer
	 
	 	 	 	 
	 

	 	Copy:
	 	ABM Industries Incorporated
	 

	 	 	 	160 Pacific Avenue, Suite 222
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Attention: Senior Vice President of Human Resources

	 	8.2	 	RECEIPT. Any such notice shall be assumed to have been received when delivered
in person or 48 hours after being sent in the manner specified above.

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	9.	 	GENERAL PROVISIONS.

	 	9.1	 	GOVERNING LAW. This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Employment, which, for purposes of this Agreement, shall
mean the state where Executive is regularly and customarily employed and where
Executive’s primary office is located.
	 
	 	9.2	 	NO WAIVER. Failure by either party to enforce any term or condition of this
Agreement at any time shall not preclude that party from enforcing that provision, or
any other provision of this Agreement, at any later time.
	 
	 	9.3	 	SEVERABILITY. It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permissible under the law and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in any
jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision,
as to such jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing, if such provision
could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in
such jurisdiction, it shall, as to such jurisdiction, be either automatically deemed so
narrowly drawn, or any court of competent jurisdiction is hereby expressly authorized
to redraw it in that manner, without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction.
	 
	 	9.4	 	SURVIVAL. All terms and conditions of this Agreement which by reasonable
implication are meant to survive the termination of this Agreement, including but not
limited to the provisions of Sections 5.1 – 5.6 of this Agreement, shall remain in
full force and effect after the termination of this Agreement.
	 
	 	9.5	 	REPRESENTATIONS BY EXECUTIVE. Executive represents and agrees that Executive
has carefully read and fully understands all of the provisions of this Agreement, that
Executive is voluntarily entering into this Agreement and has been given an opportunity
to review all aspects of this Agreement with an attorney, if Executive chooses to do
so. Executive understands he/she is also now eligible for Severance Benefits to which
Executive was not previously entitled and acknowledges the value of such benefits.
Executive also represents that he/she will not make any unauthorized use of any
confidential or Proprietary Information of any third party in the performance of
his/her duties under this Agreement and that Executive is under no obligation to any
prior employer or other entity that would preclude or interfere with the full and good
faith performance of Executive’s obligations hereunder.

9

 

	 	9.6	 	ENTIRE AGREEMENT. Unless otherwise specified herein, this Agreement sets forth
every contract, understanding and arrangement as to the employment relationship between
Executive and Company, and may only be changed by a written amendment signed by both
Executive and Company.

	 	9.6.a 	 	NO EXTERNAL EVIDENCE. The parties intend that this Agreement
speak for itself, and that no evidence with respect to its terms and conditions
other than this Agreement itself may be introduced in any arbitration or
judicial proceeding to interpret or enforce this Agreement.
	 
	 	9.6.b 	 	OTHER AGREEMENTS. It is specifically understood and accepted
that this Agreement supersedes all oral and written employment agreements
between Executive and Company prior to the date of this Agreement. However, it
is expressly understood that, notwithstanding any provision to the contrary
contained in this Agreement (whether explicit or implicit), the terms and
restrictions set forth in any Asset Purchase Agreement, Merger Agreement, Stock
Purchase Agreement or any agreement ancillary thereto, entered into by and
between Executive and any Company-affiliated entity setting forth Executive’s
duties under a Covenant Not To Compete in connection with the sale of such
assets, shall remain in full force and effect during employment and thereafter.
	 
	 	9.6.c 	 	 AMENDMENTS. This Agreement may not be amended except in a
writing approved by the Board and signed by the Executive and the President or
Chief Executive of Company.

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IN WITNESS WHEREOF, Executive and Company have executed this Agreement as of the date set forth
above.

	 	 	 	 	 	 	 	 	 
	 	 	Executive:	 	(Executive Name)	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	       Company: (Legal Company Name)	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

11

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