{"id":41283,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/secured-loan-agreement-coach-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"secured-loan-agreement-coach-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/secured-loan-agreement-coach-inc.html","title":{"rendered":"Secured Loan Agreement – Coach Inc."},"content":{"rendered":"
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SECURED LOAN AGREEMENT\n<\/font>\n\n<\/p>
                  SECURED LOAN AGREEMENT (as amended, supplemented or otherwise modified\nfrom time to time, the \u0093Agreement\u0094), dated as of July 26, 2001 (the \u0093Effective\nDate\u0094), by and between REED KRAKOFF, a natural person residing in the State of\nNew York (the \u0093Borrower\u0094) and COACH, INC., a Maryland corporation (the\n\u0093Lender\u0094).\n<\/font>\n\n<\/p>
W I T N E S S E T H:\n<\/font>\n\n<\/p>
                  WHEREAS, the Borrower desires that the Lender make a loan of $2,000,000 to\nBorrower; and\n<\/font>\n\n<\/p>
                  WHEREAS, the Lender is willing to make such a loan, subject to the terms\nand conditions set forth herein and in the other Loan Documents (as defined\nbelow).\n<\/font>\n\n<\/p>
                  NOW, THEREFORE, in consideration of the foregoing, the mutual covenants\nand agreements herein contained and other good and valuable consideration\nreceipt of which is hereby acknowledged, the parties hereto hereby agree as\nfollows:\n<\/font>\n\n<\/p>
1. AMOUNT AND TERMS OF THE LOAN\n<\/font>\n<\/p>
                  1.1 The Loan. The \u0093Loan\u0094 hereunder shall mean the loan by the Lender to\nthe Borrower in the principal amount of $2,000,000.\n<\/font>\n\n<\/p>
                  1.2 The Note. The Loan shall be evidenced by a promissory note in\nsubstantially the form attached hereto as Exhibit A (the \u0093Note\u0094), which Note\nshall be executed by the Borrower as of the Effective Date. Every term\ncontained in the Note shall be deemed incorporated into this Agreement. To the\nextent any provision of the Note shall be deemed to be inconsistent with the\nprovisions of this Agreement, however, the provisions of this Agreement shall\ncontrol.\n<\/font>\n\n<\/p>
                  1.3 The Pledge Agreement. As a condition to the Loan, the Borrower shall\nenter into a Pledge, Assignment and Security Agreement in substantially the\nform attached hereto as Exhibit B (the \u0093Pledge Agreement\u0094), which Pledge\nAgreement shall be dated as of the Effective Date. Pursuant to the Pledge\nAgreement, the Borrower\u0092s obligations under this Agreement shall be secured by\ncertain stock options and other security as set forth in the Pledge Agreement\n(the \u0093Pledged Security\u0094).\n<\/font>\n\n<\/p>
                  1.4 Interest\n<\/font>\n\n<\/p>
                  (a) The outstanding principal balance of the Loan and any other\nobligations arising under this Agreement shall bear interest at the rate of\n5.12% per annum (which 5.12% per annum is equal to the annual midterm\napplicable federal rate for the calendar month of July,\n2001 as published by the Internal Revenue Service in Revenue Ruling\n2001-34). Interest on the Loan shall be calculated on the basis of a 360-day\nyear and the actual number of days elapsed.\n<\/font>\n\n<\/p>
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                  (b) Interest on the Loan shall accrue with annual compounding from and\nincluding the Effective Date but excluding the date of any repayment thereof,\nand, except as otherwise provided by in this Agreement, shall be payable by the\nBorrower to the Lender in one lump sum on the fifth anniversary of the\nEffective Date.\n<\/font>\n\n<\/p>
                  (c) Nothing contained herein shall be deemed to require the payment of\ninterest at a rate in excess of the maximum rate permitted by applicable law. \nIn the event that the amount required to be paid hereunder for any calendar\nmonth exceeds the maximum rate permitted by law, such amounts shall be\nautomatically reduced for such month to the maximum rate permitted by\napplicable law.\n<\/font>\n\n<\/p>
                  (d) The Borrower shall compensate the Lender, upon the Lender\u0092s delivery\nof a written demand therefor to the Borrower (which demand shall, absent\nmanifest error, be final and conclusive and binding upon all of the parties\nhereto) for all reasonable losses, expenses and liabilities that the Lender\nsustains as a consequence of any default by the Borrower in repaying the Loan\nor any other amounts owing hereunder when required by the terms of this\nAgreement.\n<\/font>\n\n<\/p>
                  1.5 Repayment of Principal. Except as otherwise provided in this\nAgreement, repayment of principal shall be due and payable in installments as\nfollows:\n<\/font>\n\n<\/p>
                  (a) $400,000 on the second anniversary of the Effective Date;\n<\/font>\n\n<\/p>
                  (b) $400,000 on the third anniversary of the Effective Date;\n<\/font>\n\n<\/p>
                  (c) $400,000 on the fourth anniversary of the Effective Date; and\n<\/font>\n\n<\/p>
                  (d) $800,000 on the fifth anniversary of the Effective Date.\n<\/font>\n\n<\/p>
                  1.6 Prepayment. The Borrower may prepay all or any part of the Loan,\nincluding interest, without penalty or premium at any time from time to time.\n<\/font>\n\n<\/p>
                  1.7 Acceleration. Notwithstanding Section 1.5, immediately upon the\noccurrence of any Event of Default (as defined in Section 7.1) and during any\ncontinuance thereof, the Lender may declare the Loan, all interest thereon and\nall other amounts and obligations payable to be forthwith due and payable to\nthe Lender or may take any other action as provided in Section 7.2 herein.\n<\/font>\n\n<\/p>
                  1.8 Payment Procedures. All payments made by Borrower under this\nAgreement shall be made to the Lender at its office at the address indicated in\nSection 9.8 and shall be made by wire transfer in U.S. dollars in immediately\navailable funds to the following account: The Northern Trust\nCompany, Chicago, Illinois, Account Number 21-229, Bank Routing Number\n071000152, or such other account number as may be designated by the Lender in\nwriting from time to time. All payments received by the Lender shall be\napplied first to fees (if any), then to unpaid principal and interest in\naccordance with the terms of this Agreement. To the extent not previously\nrepaid, all principal and interest outstanding with respect to the Loan, plus\nany accrued but unpaid fees or other obligations arising under this Agreement,\nshall be due and payable in full on the fifth anniversary of the Effective\nDate.\n<\/font>\n\n<\/p>
                  
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2. EFFECTIVENESS\n<\/font>\n<\/p>
                  2.1 Effectiveness. None of this Agreement, the Pledge Agreement or the\nNote (collectively, the \u0093Loan Documents\u0094) shall become effective until (i) all\nparties hereto have executed and delivered a counterpart hereof (including by\nway of facsimile transmission) and (ii) the conditions precedent set forth in\nSection 5 hereof shall have been satisfied.\n<\/font>\n\n<\/p>
3. REPRESENTATIONS AND WARRANTIES OF BORROWER\n<\/font>\n<\/p>
                  The Borrower represents and warrants to the Lender as follows:\n<\/font>\n\n<\/p>
                  3.1 Authority. The Borrower has the requisite legal capacity to own his\nassets, to borrow money, to execute, deliver and perform each of the Loan\nDocuments to which he is a party and all other documents, certificates and\ninstruments delivered in connection therewith, and to effect and carry out the\ntransactions contemplated herein and therein. Each Loan Document has been duly\nauthorized and, when executed and delivered, will be a valid and legally\nbinding instrument enforceable against Borrower in accordance with its terms. \nThe execution and delivery of the Loan Documents and the consummation of the\ntransactions contemplated thereby (a) will not (immediately or with the passage\nof time, or the giving of notice) violate (i) any law, order, rule or\nregulation or determination of an arbitrator, a court, or other governmental\nagency, applicable or binding upon the Borrower or any of the Borrower\u0092s\nproperty (including, without limitation, Regulations G, T, U and X of the Board\nof Governors of the Federal Reserve System) or as to which the Borrower or any\nof the Borrower\u0092s property is subject (collectively, \u0093Requirement of Law\u0094), or\n(ii) any provision of any agreement, instrument, or undertaking to which the\nBorrower is a party or by which the Borrower or any of the Borrower\u0092s property\nis bound and (b) will not result in the creation or imposition of any lien upon\nany of the property of the Borrower, other than those in favor of the Lender\npursuant to the Loan Documents. No consents, approvals or other authorizations\nor notices, other than those which have been obtained and are in full force and\neffect, are required by any state or federal regulatory authority or other\nperson or entity (\u0093Person\u0094) in connection with the execution and delivery of\nthe Loan Documents and the performance of any obligations contemplated thereby.\n<\/font>\n\n<\/p>
                  3.2 Pledged Security Ownership. The Borrower is the owner of, or has\ncontractual rights to, the Pledged Security subject to no pledge, lien,\nmortgage, hypothecation, security interest, charge, option, or other\nencumbrance whatsoever, except the liens and security interests created by\nthe Loan Documents. The pledge and grant of the Pledged Security by the\nBorrower pursuant to the Pledge Agreement creates a valid and perfected first\npriority security interest in the Pledged Security in favor of the Lender. The\nBorrower is not subject to any contractual obligation restricting or limiting\nthe ability of the Borrower to pledge the Pledged Security pursuant to the\nPledge Agreement.\n<\/font>\n\n<\/p>
                  3.3 Litigation. There are no actions, suits, proceedings or governmental\ninvestigations or inquiries pending, or to the best knowledge of the Borrower\nthreatened, against the Borrower or the Lender, that could, if adversely\ndetermined, have a material adverse effect on the performance of any obligation\ncontemplated in or arising under the Loan Documents (a \u0093Material Adverse\nEffect\u0094).\n<\/font>\n\n<\/p>
                  
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                  3.4 Other Debt\n<\/font>\n\n<\/p>
                  (a) Exhibit C attached hereto fully and accurately states, as of the\nEffective Date, all outstanding indebtedness (other than the Loan hereunder)\nand committed undrawn lines of credit of the Borrower in excess of $100,000 and\nany other indebtedness and committed undrawn lines of credit under $100,000\nwhich in the aggregate exceed $100,000 (collectively, the \u0093Other Debt\u0094), and\n<\/font>\n\n<\/p>
                  (b) No default or event of default is existing with respect to such Other\nDebt and all representations and warranties made pursuant to the documents\nrelating to the Other Debt are true and correct.\n<\/font>\n\n<\/p>
                  3.5 Taxes. All federal, state, local and foreign tax returns, reports and\nstatements (collectively, the \u0093Tax Returns\u0094) required to be filed by the\nBorrower or any of the Borrower\u0092s Tax Affiliates (as defined below) have been\nfiled with the appropriate governmental agencies in all jurisdictions in which\nsuch Tax Returns are required to be filed (after giving effect to any\nextensions obtained for the filing thereof), all such Tax Returns are true and\ncorrect in all material respects, and all taxes, charges and other impositions\ndue and payable have been timely paid prior to the date on which any fine,\npenalty, interest, late charge or loss may be added thereto for non-payment\nthereof. Proper and accurate amounts have been withheld by the Borrower and\neach of the Borrower\u0092s Tax Affiliates, if any, from their respective employees,\nas applicable, for all periods in full and complete compliance with the tax,\nsocial security and unemployment withholding provisions of applicable federal,\nstate, local and foreign law and such withholdings have been timely paid to the\nrespective governmental authorities. \u0093Tax Affiliate\u0094 shall mean, as to any\nPerson, (i) any subsidiary of such Person and (ii) any affiliate of such Person\nwith which such Person files or is eligible to file consolidated, combined or\nunitary tax returns.\n<\/font>\n\n<\/p>
                  3.6 Full Disclosure. No written statement prepared or furnished to the\nLender in connection with the transactions contemplated hereby (including,\nwithout limitation, financial statements) by or on\nbehalf of the Borrower, when all such statements are taken as a whole,\ncontains any untrue statement of a material fact or omits to state a material\nfact necessary to make the statements contained therein not misleading. All\nfacts known to the Borrower which are material to an understanding of the\nfinancial condition, business, properties or prospects of the Borrower have\nbeen disclosed to the Lender.\n<\/font>\n\n<\/p>
                  3.7 No Burdensome Restrictions; No Defaults\n<\/font>\n\n<\/p>
                  (a) The Borrower is not a party to any contractual obligation the\ncompliance with which would have a Material Adverse Effect or the performance\nof which, either unconditionally or upon the happening of an event, will result\nin the creation of a lien (other than a lien granted pursuant to a Loan\nDocument) on the property or assets of the Borrower.\n<\/font>\n\n<\/p>
                  (b) The Borrower is not in default under or with respect to any\ncontractual obligation owed by the Borrower and, to the knowledge of the\nBorrower, no other party is in default under or with respect to any contractual\nobligation owed to the Borrower, other than those defaults which in the\naggregate have no Material Adverse Effect.\n<\/font>\n\n<\/p>
                  
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                  (c) No Event of Default or event which, with the lapse of time and\/or\nnotice, would become an Event of Default (such event, a \u0093Default\u0094) has occurred\nand is continuing.\n<\/font>\n\n<\/p>
                  (d) There is no Requirement of Law the compliance with which by the\nBorrower would have a Material Adverse Effect.\n<\/font>\n\n<\/p>
4. REPRESENTATIONS AND WARRANTIES OF THE LENDER\n<\/font>\n<\/p>
                  4.1 Contractual Obligations. The Lender is not subject to any contractual\nobligation restricting or limiting the ability of the Borrower to pledge the\nPledged Security pursuant to the Pledge Agreement.\n<\/font>\n\n<\/p>
5. CONDITIONS PRECEDENT\n<\/font>\n<\/p>
                  The effectiveness of this Agreement is subject to the satisfaction of the\nfollowing conditions precedent:\n<\/font>\n\n<\/p>
                  5.1 Documents. The Lender shall have received the following, validly\nexecuted to the satisfaction of the Lender:\n<\/font>\n\n<\/p>
                  (a) this Agreement;\n<\/font>\n\n<\/p>
                  (b) the Note; and\n<\/font>\n\n<\/p>
                  (c) the Pledge Agreement.\n<\/font>\n\n<\/p>
                  5.2 Approvals.\n<\/font>\n\n<\/p>
                  The Lender and the Borrower shall have received all necessary governmental\napprovals (domestic and foreign) and third party approvals in connection with\nthe Loan and the transactions contemplated by the Loan Documents, which\napprovals shall have been received and remain in effect, and all applicable\nwaiting periods shall have expired without any action being taken by any\ncompetent authority which restrains, prevents or imposes materially adverse\nconditions upon the making of the Loan and the transactions contemplated\nthereby. Additionally, there shall not exist any judgment, order, injunction\nor other restraint issued or filed or a hearing seeking injunctive relief or\nother restraint pending or notified prohibiting or imposing materially adverse\nconditions upon the making of the Loan or the transactions contemplated by the\nLoan Documents.\n<\/font>\n\n<\/p>
                  5.3 Compliance with Covenants. The Borrower shall have complied with and\nperformed all of the Borrower\u0092s covenants and obligations under the Loan\nDocuments.\n<\/font>\n\n<\/p>
                  5.4 No Event of Default. No Default or Event of Default exists.\n<\/font>\n\n<\/p>
                  5.5 Related Information. The Borrower shall have provided to the Lender\nin form satisfactory to the Lender such other financial and personal\ninformation relating to the Borrower as requested by the Lender.\n<\/font>\n\n<\/p>
                  5.6 Fees and Expenses. The Lender has paid all costs and expenses in\nconnection with the preparation, execution and delivery of the Loan Documents\nincluding but \n
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not limited to the reasonable fees and out-of-pocket expenses of\nLatham & Watkins, counsel to the Lender.\n<\/font>\n<\/p>
6. COVENANTS OF THE BORROWER\n<\/font>\n<\/p>
                  6.1 Certain Affirmative Covenants. The Borrower covenants and agrees that\nuntil full and complete performance by the Borrower of all obligations arising\nunder the Loan and the Loan Documents, the Borrower shall:\n<\/font>\n\n<\/p>
                  (a) Cooperate with the Lender and execute such further instruments and\ndocuments as the Lender shall reasonably request to carry out to its\nsatisfaction the transactions contemplated by the Loan Documents; provided,\nhowever, that the Borrower shall be under no obligation to provide any\ncollateral other than the Pledged Security;\n<\/font>\n\n<\/p>
                  (b) As soon as possible and in any event within two business days after\nacquiring knowledge thereof notify the Lender in writing of the occurrence of\nany Default or Event of Default;\n<\/font>\n\n<\/p>
                  (c) Cause to be promptly delivered to the Lender copies of all written\nnotices, and notice of any oral notices, received by the Borrower with respect\nto any part of the Pledged Security;\n<\/font>\n\n<\/p>
                  (d) Promptly give notice to the Lender of any challenge to the title of\nthe Pledged Security and defend the Lender\u0092s right, title and security interest\nin and to the Pledged Security and the proceeds thereof against the claims and\ndemands of all persons (the Borrower also agrees that it will have like title\nto and right to pledge any other property at any time hereafter pledged to the\nLender as collateral and will likewise defend the Lender\u0092s right thereto and\nsecurity interest therein);\n<\/font>\n\n<\/p>
                  (e) Promptly provide the Lender with such other information respecting\ncondition or operations, financial or otherwise, of the Borrower as the lender\nmay from time to time reasonably request; and\n<\/font>\n\n<\/p>
                  (f) At the request of the Lender, provide the Lender with duly authorized\ncertificates evidencing any Pledged Security, together with stock powers\nexecuted in blank to the Lender.\n<\/font>\n\n<\/p>
                  6.2 Negative Covenants. The Borrower covenants and agrees that until full\nand complete performance by the Borrower of all obligations arising under the\nLoan and the Loan Documents, the Borrower shall not:\n<\/font>\n\n<\/p>
                  (a) Sell, assign, transfer, exchange or otherwise dispose of, or grant any\noption with respect to the Pledged Security, nor create, incur, or permit to\nexist any pledge, lien, mortgage, hypothecation, security interest, charge,\noption or any other encumbrances with respect to any of the Pledged Security or\ninterest therein, or any proceeds thereof, except for the liens and security\ninterests provided or permitted hereby;\n<\/font>\n\n<\/p>
                  
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                  (b) Without the prior written consent of the Lender, grant proxies, assign\nor otherwise transfer voting interests in the Pledged Security, or vote as a\nstockholder of the Lender to issue any stock or other securities of any nature\nin addition to or in exchange or substitution for the Pledged Security or\nengage in any other transaction that could have an adverse effect on the value\nof the Pledged Security or the rights and remedies of the Lender in respect\nthereof;\n<\/font>\n\n<\/p>
                  (c) Sell any shares of Coach, Inc. common stock in a manner that would\nadversely effect the Lender\u0092s ability to sell the Pledged Security; or\n<\/font>\n\n<\/p>
                  (d) Use the proceeds of the Loan to purchase or carry (i) \u0093securities\u0094\nwithin the meaning of Regulation T of the Board of Governors of the Federal\nReserve System, or (ii) \u0093Margin Stock\u0094 within the meaning of Regulation G, U,\nor X of the Board of Governors of the Federal Reserve System.\n<\/font>\n\n<\/p>
                  6.3 Compliance with Laws, etc. The Borrower shall comply in all material \nrespects with all Requirements of Law, contractual obligations, commitments, instruments,\nlicenses, permits and franchises; provided, however, that there shall not be\ndeemed a default under this Section if all such non-compliances in the\naggregate have no Material Adverse Effect.\n<\/font>\n\n<\/p>
                  6.4 Payment of Taxes. The Borrower shall pay and discharge, before the\nsame shall become delinquent, all lawful governmental claims, taxes,\nassessments, charges and levies; provided, however, that there shall not be\ndeemed a default under this Section if all such non-payments in the aggregate\nhave no Material Adverse Effect.\n<\/font>\n\n<\/p>
                  6.5 Reporting Requirements. The Borrower shall furnish to the Lender:\n<\/font>\n\n<\/p>
                  (a) Promptly after the commencement thereof, notice of all actions, suits\nand proceedings before any domestic or foreign governmental authority or\narbitrator, affecting the Borrower, except those which in the aggregate, if\nadversely determined, would have no Material Adverse Effect;\n<\/font>\n\n<\/p>
                  (b) Promptly (and in any event within two business days) after Borrower\nbecomes aware of the existence of (i) any breach or non-performance of, or any\ndefault under, any contractual obligation which is material to the financial\ncondition of the Borrower, or (ii) any event, development or other\ncircumstances which has any reasonable likelihood of causing of resulting in a\nMaterial Adverse Effect, written notice in reasonable detail specifying the\nnature of the breach, non-performance, default, event, development or\ncircumstance, including without limitation, the anticipated effect thereof,\nwhich notice shall be promptly confirmed in writing within five days;\n<\/font>\n\n<\/p>
                  (c) Upon the request of the Lender, copies of all federal, state and local\ntax returns and reports filed by the Borrower or any of the Borrower\u0092s\naffiliates in respect of taxes measured by income (excluding sales, use and\nlike taxes); and\n<\/font>\n\n<\/p>
                  (d) Such other information respecting the financial condition of the\nBorrower as the Lender may from time to time reasonably request.\n<\/font>\n\n<\/p>
                  
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                  6.6 Indebtedness. The Borrower shall not create or suffer to exist any\nindebtedness except:\n<\/font>\n\n<\/p>
                  (a) The Loan;\n<\/font>\n\n<\/p>
                  (b) Current liabilities in respect of taxes, assessments and governmental\ncharges or levies incurred; and\n<\/font>\n\n<\/p>
                  (c) Indebtedness existing on the Effective Date and set forth on Exhibit\nC, or refinancings thereof which do not increase the principal amount thereof\nor provide for any\npayment of principal prior to the dates and in the amounts required under\nthe terms of the indebtedness being refinanced.\n<\/font>\n\n<\/p>
                  (d) Indebtedness secured by a purchase money mortgage.\n<\/font>\n\n<\/p>
                  (e) Indebtedness (other than as set forth in subparagraphs (a) through\n(d), above) not exceeding $5,000,000 in the aggregate.\n<\/font>\n\n<\/p>
7. EVENTS OF DEFAULT; ACCELERATION\n<\/font>\n<\/p>
                  7.1 Events of Default. Each of the following shall constitute an \u0093Event\nof Default\u0094:\n<\/font>\n\n<\/p>
                  (a) The Borrower shall fail to make any payment of principal or interest\non the Loan or other amounts due under the Loan Documents on the date which\nsuch payment is due;\n<\/font>\n\n<\/p>
                  (b) The Borrower shall fail to perform any term, covenant or agreement\ncontained in Sections 6.1(b) or 6.2 herein; or (ii) the Borrower shall fail to\nperform any other term, covenant or agreement contained herein or in any Loan\nDocument and such failure shall continue for fifteen (15) days after the\nearlier of the date on which (x) the Borrower becomes aware of such failure or\n(y) written notice of such failure has been given to the Borrower by the\nLender;\n<\/font>\n\n<\/p>
                  (c) Any representation or warranty of the Borrower in any Loan Document\nshall prove to have been false in any material respect upon the date when made;\n<\/font>\n\n<\/p>
                  (d) The Borrower\u0092s employment with the Lender shall be terminated for any\nreason or the Borrower shall materially breach any provision of any employment\nagreement that may be entered into between the Borrower and the Lender prior to\nthe time the Borrower repays the Loan in full;\n<\/font>\n\n<\/p>
                  (e) The Borrower shall default in the payment when due (whether by\nscheduled maturity, by required prepayment, by acceleration, by demand, or\notherwise) of any indebtedness for borrowed money owing to any other person, or\nany interest or premium thereon of any amount owing in respect of such\nindebtedness, in excess of $100,000; or the Borrower shall default in the\nperformance or observance of any obligation or condition with respect to such\nindebtedness or any other event shall occur or condition exist, if the effect\nof such default, event \n
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or condition is to accelerate the maturity of any such\nindebtedness or to permit (without regard to any required notice or lapse of\ntime) the holder or holders thereof, or any trustee or agent for such holders,\nto accelerate the maturity of any such indebtedness, or any such indebtedness\nshall become or be declared to be due and payable prior to its stated maturity\nother than as a result of a regularly scheduled payment date;\n<\/font>\n<\/p>
                  (f) The Borrower shall (i) apply for or consent to the appointment of, or\nthe taking of possession by, a receiver, custodian, trustee or liquidator; (ii)\nbe generally unable to pay the Borrower\u0092s debts as such debts become due; (iii)\nmake a general assignment for the\nbenefit of the Borrower creditors; (iv) commence a voluntary case under\nthe United States Bankruptcy Code (as now or hereafter in effect); (v) file a\npetition seeking to take advantage of any other law of any jurisdiction\nrelating to bankruptcy, insolvency, or composition or readjustment of debts;\n(vi) fail to controvert in a timely and appropriate manner, or acquiesce in\nwriting to, any petition filed against the Borrower in an involuntary case\nunder the United States Bankruptcy Code, or (vii) take any action for the\npurpose of effecting any of the foregoing;\n<\/font>\n\n<\/p>
                  (g) A proceeding or case shall be commenced, without the application or\nconsent of the Borrower, in any court of competent jurisdiction, seeking (i)\nthe liquidation of the Borrower\u0092s assets, or the composition or readjustment of\nthe Borrower\u0092s debts, (ii) the appointment of a trustee, receiver, custodian,\nliquidator or the like of any substantial part of the Borrower\u0092s assets, or\n(iii) similar relief in respect of the Borrower under any law of any\njurisdiction relating to bankruptcy, insolvency, or the composition or\nreadjustment of debts, and such proceedings or case shall continue undismissed,\nor an order, judgment or decree approving or ordering any of the foregoing\nshall be entered and continue unstayed and in effect for a period of sixty (60)\ndays; or an order for relief against the Borrower shall be entered in an\ninvoluntary case under any bankruptcy, insolvency, composition, readjustment of\ndebt, liquidation of assets or similar law of any jurisdiction;\n<\/font>\n\n<\/p>
                  (h) There shall remain in force, undischarged, unbonded, or unstayed, for\nmore than thirty (30) days, any final judgment against the Borrower that, with\nother outstanding final judgments, undischarged, against the Borrower exceeds\nin the aggregate $100,000;\n<\/font>\n\n<\/p>
                  (i) The Borrower shall die or become incapacitated;\n<\/font>\n\n<\/p>
                  (j) Any provision of the Pledge Agreement shall for any reason cease to be\nvalid and binding on the Borrower or the Borrower shall so state in writing; or\nthe Pledge Agreement shall for any reason cease to create a valid lien on the\nPledged Security purported to be covered thereby, or such lien shall cease to\nbe a perfected and first priority lien with respect to the Pledged Security, or\nthe Borrower shall so state in writing; or\n<\/font>\n\n<\/p>
                  (k) Any necessary approval, qualification or license of any governmental\nentity required in connection with any Loan Document or the transactions\ncontemplated thereby shall be revoked, terminated, withdrawn, suspended,\nmodified, withheld, or not renewed, which in the Lender\u0092s judgment, would\nindividually or in the aggregate have a Material Adverse Effect.\n<\/font>\n\n<\/p>
                  7.2 Remedies Upon Default. Immediately upon the occurrence of any Event\nof Default and during the continuance thereof, the Lender may declare the Loan,\nall interest \n
9<\/font>\n<\/p>
<\/p>
\n\n<\/p><\/font>\n\n<\/p>
thereon and all other amounts and obligations payable under any\nLoan Document to be forthwith due and payable, without presentment, demand,\nprotest or further notice of any kind, all of which are expressly waived by the\nBorrower; provided that, upon the occurrence of an Event of Default specified\nin subparagraphs (g) and (h) above, the Loan, all such interest and all such\namounts and obligations payable under any Loan Document shall automatically\nbecome due and payable, without presentment, demand, protest or any notice of\nany kind, all of which are hereby expressly waived by the Borrower. In\naddition to the remedies set forth above, the Lender shall have the rights and\nremedies (a) set forth in the Pledge Agreement, (b) in any other\ninstrument or agreement securing, evidencing, or relating to any of the\nobligations of the Borrower hereunder, (c) all the rights and remedies of a\nsecured party under the Uniform Commercial Code and (d) the Lender shall also\nhave the right to offset any amounts otherwise payable from the Lender to the\nExecutive (including, without limitation, any salary, bonus or severance\npayments) by the amount of such unpaid principal and\/or interest. The Borrower\nfurther waives and agrees not to assert any rights or privileges it may acquire\nunder Section 9-112 of the Uniform Commercial Code and the Borrower shall be\nliable for the deficiency if the proceeds of any sale or other disposition of\nthe Pledged Security are insufficient to pay all amounts to which the Lender is\nentitled, and the fees of any attorneys employed by the Lender to collect such\ndeficiency.\n<\/font>\n<\/p>
                  7.3 Regulatory Approval. To the extent necessary, the Borrower agrees to\nuse Borrower\u0092s best efforts to obtain all approvals, authorizations, consents\nand licenses or to provide any regulatory notices required by, any federal,\nstate, or local regulatory agency or governmental body with jurisdiction\nthereof in connection with any foreclosure with respect to the Pledged Security\nor subsequent sale or other disposition of any or all of the Pledged Security,\nor any change in the voting rights or control of the voting rights relating\nthereto upon the occurrence and continuance of an Event of Default, and, to the\nextent not otherwise unlawful, to deal with the Pledged Security in a manner\nconsistent with the best interests of the Lender, including selling the Pledged\nSecurity at the request of the Lender to any Person authorized to purchase\nPledged Security.\n<\/font>\n\n<\/p>
8. ARBITRATION\n<\/font>\n<\/p>
                  8.1 AGREEMENT TO BINDING ARBITRATION. THE PARTIES AGREE THAT ANY\nCONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER\nLOAN DOCUMENT OR THE BREACH THEREOF, SHALL AT EITHER PARTIES, ELECTION, BE\nSUBMITTED TO ARBITRATION BEFORE THE AMERICAN ARBITRATION ASSOCIATION IN\nACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION\nASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR MAY BE\nENTERED IN ANY COURT HAVING JURISDICTION THEREOF. EITHER PARTY MAY OBTAIN\nPROVISIONAL OR ANCILLARY REMEDIES SUCH AS INJUNCTIVE RELIEF OR THE APPOINTMENT\nOF A RECEIVER, OR EXERCISE SELF-HELP, AT ANY TIME WITHOUT WAIVING ITS RIGHT TO\nARBITRATION.\n<\/font>\n\n<\/p>
9. MISCELLANEOUS\n<\/font>\n<\/p>
                  9.1 Expenses. Whether or not any advances are made pursuant to the Loan,\nthe Lender agrees to pay all costs and expenses in connection with the\npreparation, execution, \n
10<\/font>\n<\/p>
<\/p>
\n\n<\/p><\/font>\n\n<\/p>
delivery, administration, and enforcement of the Loan\nand the Loan Documents and the perfection and continuation of the security\ninterest in the Pledged Security\n<\/font>\n<\/p>
                  9.2 Governing Law; Submission to Jurisdiction. This Agreement, the Pledge\nAgreement and the Note are contracts under the laws of the State of New York\nand shall for all purposes be governed by and construed in accordance with the\nlaws of the State of New York, without regard to its principals of conflicts of\nlaws. The Borrower and the Lender hereby submit to the nonexclusive\njurisdiction of the United States District Court for the Southern District of\nNew York and of any New York state court sitting in New York City for the\npurposes of all legal proceedings arising out of or relating to this Agreement\nor the transactions contemplated hereby. The Borrower and the Lender\nirrevocably waive, to the fullest extent permitted by applicable law, any\nobjection that the Borrower or the Lender may now or hereafter have to laying\nof the venue of any such proceedings brought in such a court and any claim that\nany such proceeding brought in such a court has been brought in an inconvenient\nforum.\n<\/font>\n\n<\/p>
                  9.3 Waiver of Jury Trial. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY\nWAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO\nTRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS\nAGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.\n<\/font>\n\n<\/p>
                  9.4 Further Assurances. Subject to Section 6.1(a), the Borrower shall, at\nany time, and from time to time, upon the written request of the Lender,\nexecute and deliver such further documents and do such further acts and things\nas the Lender may reasonably request to effect the purposes of this Agreement,\nincluding, in the case of the Borrower, delivering to the Lender at the request\nof the Lender a proxy with respect to the Pledged Security, and this Agreement\nshall constitute a proxy with respect to the Pledged Security.\n<\/font>\n\n<\/p>
                  9.5 Waivers. No course of dealing between any of the Borrower and the\nLender, nor any failure to exercise, nor any delay in exercising, any right,\npower or privilege of the Lender hereunder shall operate as a waiver thereof,\nnor shall any single or partial exercise of any right, power, or privilege\nhereunder preclude any other or further exercise thereof or the exercise of any\nother right, power or privilege.\n<\/font>\n\n<\/p>
                  9.6 Rights Cumulative. The rights and remedies provided herein, in the\nPledge Agreement, in the Note, and in all other agreements, instruments, and\ndocuments delivered pursuant to or in connection with this Agreement, and by\napplicable law are cumulative and are in addition to and not exclusive of any\nother rights or remedies provided by law.\n<\/font>\n\n<\/p>
                  9.7 Severability. The provisions of this Agreement are severable. If any clause or\nprovision hereof shall be held invalid or unenforceable in whole or in part in\nany jurisdiction, then such invalidity or unenforceability shall affect only\nsuch clause or provision or part thereof in such jurisdiction and shall not in\nany manner affect such clause or provision in any other jurisdiction or any\nother clause or provision in this Agreement in any jurisdiction.\n<\/font>\n\n<\/p>
                  
11<\/font>\n<\/p>
<\/p>
\n\n<\/p><\/font>\n\n<\/p>
                  9.8 Notices. All notices and other communications made or required to be\ngiven pursuant to the Loan Documents shall be in writing and shall be deemed\ngiven if delivered personally or by facsimile transmission (if receipt is\nconfirmed by the facsimile operator of the recipient), or delivered by\novernight courier service, or mailed by registered or certified mail (return\nreceipt requested), postage prepaid, to the parties at the following addresses\n(or at such other address for a party as shall be specified by like notice;\nprovided that notices of a change of address shall be effective only upon\nreceipt thereof):\n<\/font>\n\n<\/p>
\n<\/p><\/pre>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
 <\/font><\/td>\n(a)<\/font><\/td>\n <\/font><\/td>\nTo the Borrower:<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n <\/font><\/td>\n <\/font><\/td>\nReed Krakoff
\n162 East 70th Street
\nNew York, NY 10021<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n <\/font><\/td>\n <\/font><\/td>\nWith a copy to:<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n <\/font><\/td>\n <\/font><\/td>\nReed Krakoff
\n516 West 34th Street
\nNew York, NY 10001<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n(b)<\/font><\/td>\n <\/font><\/td>\nTo the Lender:<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n <\/font><\/td>\n <\/font><\/td>\nCoach, Inc.
\n516 West 34th Street
\nNew York, NY 10001
\nAttention: Carole P. Sadler, Esq.
\nFacsimile No: (212) 629-2398<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n <\/font><\/td>\n <\/font><\/td>\nWith a copy to:<\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n<\/tr>\n
 <\/font><\/td>\n <\/font><\/td>\n <\/font><\/td>\nLatham & Watkins
\n885 Third Avenue
\nNew York, NY 10022
\nAttention: Bradd L. Williamson, Esq.
\nFacsimile No.: (212) 751-4864<\/font><\/td>\n<\/tr>\n<\/table>\n
                  9.9 Successors and Assign. This Agreement shall inure to the benefit of
\nand shall be binding upon the successors and assigns of the parties hereto;
\nprovided, however, that the Borrower may not assign any rights or obligations
\nhereunder without the written consent of the Lender.
\n<\/font><\/p>\n
                  9.10 Counterparts. This Agreement may be executed in counterparts,
\neach of which shall be deemed to be an original and all of which shall
\nconstitute one document.
\n<\/font><\/p>\n
                  9.11 Termination. This Agreement shall terminate upon irrevocable payment
\nin cash in full of all obligations secured hereby, at which time the Lender
\nwill deliver all of the Pledged Security being held hereunder to the Borrower
\nor as otherwise instructed by the Borrower.
\n<\/font><\/p>\n
[signature page follows]
\n<\/font><\/p>\n
12<\/font>\n<\/p>\n<\/p>\n
\n
                  IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
\nduly executed and delivered as of the day and year first above written.
\n<\/font><\/p>\n<\/p>\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
 <\/td>\nBORROWER
\n        \/s\/  Reed Krakoff<\/p>\n
\n        Reed Krakoff
\n        LENDER
\n        By:\/s\/  Keith Monda<\/p>\n
\n        Name:  Keith Monda
\n        Title:  Chief Operating Officer<\/font><\/td>\n<\/tr>\n<\/table>\n
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