Exhibit 10.1

 

[EXECUTION COPY]

 

FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT, dated as of August 15, 2016 (this “Amendment”), modifies that certain
Second Amended and Restated Loan and Security Agreement, dated as of March 21,
2011 (as amended by that certain First Amendment to Second Amended and Restated
Loan and Security Agreement dated as of October 25, 2012, that certain Second
Amendment to Second Amended and Restated Loan and Security Agreement dated as of
December 12, 2013,  that certain Consent and Third Amendment to Second Amended
and Restated Loan and Security Agreement, dated as of January 15, 2016 and as
may be further amended, restated, amended and restated, extended, supplemented
or otherwise modified in writing from time to time, the “Loan and Security
Agreement”), among THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania
corporation (“Bon-Ton”), CARSON PIRIE SCOTT II, INC., a Florida corporation
(“CPS II”), BON-TON DISTRIBUTION, LLC, an Illinois limited liability company
(“Distribution”), MCRIL, LLC, a Virginia limited liability company (“McRIL”),
BONSTORES REALTY ONE, LLC, a Delaware limited liability company (“BR1LLC”),
BONSTORES REALTY TWO, LLC, a Delaware limited liability company (“BR2LLC” and,
together with Bon-Ton, CPS II, Distribution, McRIL, BR1LLC and any other person
from time to time a borrower thereunder, collectively, the “Borrowers”), each of
the other Obligors party thereto, the financial institutions party thereto from
time to time as lenders (collectively, the “Lenders”), BANK OF AMERICA, N.A., a
national banking association (“Bank of America”), as agent for the Lenders (in
such capacity, the “Agent”), Bank of America and WELLS FARGO BANK, NATIONAL
ASSOCIATION, acting as co-collateral Agents (in such capacity, the
“Co-Collateral Agents”) and CRYSTAL FINANCIAL LLC, acting as the documentation
agent for the Tranche A-1 Facility, and the other parties thereto.  Capitalized
terms used herein and not defined shall have the meaning assigned to such terms
in the Loan and Security Agreement, as amended by this Amendment.

 

W I T N E S S E T H:

 

A.                                    The Borrowers have requested that the
Agent and the Lenders agree to amend certain of the terms and provisions of the
Loan and Security Agreement as specifically set forth in this Amendment.

 

B.                                    The undersigned Lenders and the Agent are
prepared to amend the Loan and Security Agreement, subject to the conditions and
in reliance on the representations set forth herein.

 

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:

 

1.                                      Amendments to Loan and Security
Agreement.

 

(a)                                 The Loan and Security Agreement (excluding
the schedules and exhibits thereto, which shall remain in full force and effect,
except as specifically amended by Section 2 of this Amendment) is hereby amended
as set forth in Annex A attached hereto such that all of the newly

 

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inserted double underlined text (indicated textually in the same manner as the
following example: double-underlined text) and any formatting changes attached
hereto shall be deemed to be inserted and all stricken text (indicated textually
in the same manner as the following example: stricken text) shall be deemed to
be deleted therefrom.

 

2.                                      Amendments to Schedules and Exhibits to
Loan and Security Agreement.

 

(a)                                 Schedules 1.1(a) (Commitments of Lenders),
7.1(c) (Commercial Tort Claims), 7.2.1 (Secondary Operating Deposit Accounts),
7.3 (Mortgaged Real Estate), 8.2.1 (Existing Credit Card Arrangements), 8.5
(Deposit Accounts), 8.5(a) (Excluded Deposit and Disbursement Accounts),
8.5(b) (Excluded Trust Accounts), 8.6.1 (Chief Executive Offices and other
Business Locations), 9.1.4 (Names and Capital Structure), 9.1.5 (Former
Corporate Names and Trade Names), 9.1.12 (Intellectual Property), 9.1.22 (Labor
Contracts) to the Loan and Security Agreement are hereby deleted and replaced in
their entirety by the schedules attached hereto in Annex B.

 

(b)                                 The Loan and Security Agreement is hereby
amended by adding a new Schedule 14 (Agreement Among Tranche A Lenders and
Tranche A-1 Lenders) to the Loan and Security Agreement in the form attached
hereto as Annex C.

 

(c)                                  Exhibit B (Tranche A-1 Revolver Note) to
the Loan and Security Agreement is hereby deleted and replaced in its entirety
by the exhibit attached hereto as Exhibit B.

 

(d)                                 Exhibit C (Assignment and Assumption
Agreement) to the Loan and Security Agreement is hereby deleted and replaced in
its entirety by the exhibit attached hereto as Exhibit C.

 

(e)                                  The Loan and Security Agreement is hereby
amended by adding new Exhibit I-1, Exhibit I-2, Exhibit I-3 and Exhibit I-4 to
the Loan and Security Agreement in the forms attached hereto as Exhibit I.

 

3.                                      Refinancing of Existing Tranche A-1
Revolver Loans.  Each Obligor, and each of the undersigned Lenders, Issuing
Banks and the Agent hereby acknowledge that, immediately upon the occurrence of
the Fourth Amendment Closing Date, the existing Tranche A-1 Revolver Commitments
shall be deemed assigned by each of the Tranche A-1 Lenders holding a Tranche
A-1 Revolver Commitment prior to the occurrence of the Fourth Amendment Closing
Date (the “Existing Tranche A-1 Lenders”) to the Lenders holding Tranche A-1
Revolver Loans under the Loan and Security Agreement, as amended by this
Amendment (the “Fourth Amendment Tranche A-1 Lenders”).  Immediately after
giving effect to this Amendment, each Fourth Amendment Tranche A-1 Lender shall
hold a Tranche A-1 Revolver Commitment in the principal amount set forth
opposite such Fourth Amendment Tranche A-1 Lender’s name on Schedule
1.1(a) attached hereto.  The transactions described in this Section 3 are
referred to herein as the “Tranche A-1 Refinancing”.

 

4.                                      [Reserved].

 

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5.                                      Conditions Precedent.  This Amendment
shall become effective as of the date first written above (the “Fourth Amendment
Closing Date”) upon the satisfaction of each of the following conditions
precedent:

 

(a)                                 This Amendment shall have been duly executed
and delivered to the Agent by each of the Obligors, the Agent, and the Required
Lenders.

 

(b)                                 [Reserved].

 

(c)                                  The Agent shall have received an omnibus
reaffirmation agreement of the other Loan Documents duly executed by each of the
Obligors and the Agent.

 

(d)                                 [Reserved].

 

(e)                                  [Reserved].

 

(f)                                   The Agent shall have received a Borrowing
Base Certificate (and all supporting documents and schedules) dated as of the
Fourth Amendment Closing Date, in form and substance reasonably satisfactory to
it and providing a determination of the Tranche A Borrowing Base and the Tranche
A-1 Borrowing Base after giving effect to this Amendment, and the Agent shall be
satisfied that, both before and after giving effect to all extensions of credit
outstanding or to be made on the Fourth Amendment Closing Date, Excess
Availability under the Loan and Security Agreement, as amended by this
Amendment, shall not be less than $150,000,000.

 

(g)                                  The Agent and the Lenders shall be
satisfied that the Security Documents remain effective to create in favor of the
Agent a legal, valid and enforceable first priority (subject only to Permitted
Liens entitled to priority under Applicable Law) perfected security interest in
and Lien upon the Collateral.

 

(h)                                 The Obligors shall have delivered, and shall
have caused each Subsidiary to deliver, each Mortgage amendment, in form
reasonably acceptable to Agent, necessary to amend the Termination Date stated
in such Mortgage and to reflect the modifications to the Loan and Security
Agreement contemplated hereby.

 

(i)                                     The Agent shall have received
satisfactory updates with respect to all flood insurance certifications related
to any Collateral.

 

(j)                                    The Agent shall have received a
certificate, in form and substance reasonably satisfactory to the Agent, from
the chief financial officer or the treasurer of each Obligor certifying that
after giving effect to the transactions contemplated by this Amendment
(including the extension of the Tranche A-1 Revolver Loans on the Fourth
Amendment Closing Date), (x) Parent and its Subsidiaries, on a consolidated
basis, are Solvent and (y) each Borrower, individually, is Solvent.

 

(k)                                 The Agent shall have received a certificate
of a duly authorized officer of each Obligor (with such certification to be in
such Person’s capacity as an officer of such Obligor and not in such Person’s
individual capacity), (i) certifying (x) that such Obligor’s Organic Documents
certified by such Obligor to the Agent on the Closing Date remain in full force
and effect, without

 

3

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amendment (or, if such Organic Documents have been amended, attaching copies
thereof, certified by the Secretary of State or another official of such
Obligor’s jurisdiction of organization), and (y) that an attached copy of
resolutions authorizing execution and delivery of the Amendment is true and
complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this Amendment, and (ii) attaching good
standing or subsistence certificates, as applicable, for such Obligor, issued by
the Secretary of State or other appropriate official of such Obligor’s
jurisdiction of organization.

 

(l)                                     The Agent shall have received a written
opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, on behalf of the
Borrowers and each of the Guarantors, as well as any relevant local counsel to
Obligors, in form and substance reasonably satisfactory to the Agent and each of
the Lenders (including an opinion regarding the absence of any conflict between
the Loan and Security Agreement as amended hereby and the Senior Note Debt).

 

(m)                             The Borrowers shall have paid (i) to the Agent
all fees to be paid pursuant to that certain Fee Letter, dated as of August 9,
2016, by and among Agent and the Borrowers and (ii) to such other Person(s) as
are entitled thereto, all reasonable and documented fees and out-of-pocket
expenses to be paid to such Persons on the Fourth Amendment Closing Date
(including, without limitation, all reasonable and documented fees,
out-of-pocket charges and disbursements of counsel to the Agent), accounting,
appraisal, consulting and other reasonable and documented fees and out-of-pocket
expenses to the extent invoiced prior to or on the Fourth Amendment Closing
Date.

 

(n)                                 Both immediately before, and immediately
after giving effect to this Amendment and transactions hereunder, including all
extensions of credit to be made on the Fourth Amendment Closing Date, (i) no
Default or Event of Default shall exist and (ii) the representations and
warranties set forth in Section 9 of the Loan and Security Agreement shall be
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to the extent that any representation or
warranty is already qualified or modified by materiality in the text thereof) as
of the Fourth Amendment Closing Date, as though made on and as of such date
(except to the extent that such representation or warranty relates to an earlier
date or period, in which case as of such earlier date or period).

 

(o)                                 The Agent shall have received a detailed
monthly availability forecast prepared by management of the Borrowers, in a
format substantially similar to that contained in the Borrowing Base
Certificate, for the period beginning on the Fourth Amendment Closing Date and
ending on February 3, 2018.

 

(p)                                 Substantially concurrently with the Fourth
Amendment Closing Date, the Tranche A-1 Refinancing shall have occurred.

 

(q)                                 The Agent shall have received such
additional documents, instruments and information as are customary for
transactions of this type as the Agent may reasonably request to effect the
transactions contemplated hereby.

 

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For purposes of determining compliance with the conditions specified in this
Section 5, each Lender (including each Fourth Amendment A-1 Lender) that has
signed this Amendment shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Agent shall have received notice from such Lender prior to the proposed Fourth
Amendment Closing Date specifying its objection thereto.

 

6.                                      Representations and Warranties.  Each of
the Obligors hereby represents and warrants to the Agent and the Lenders as of
the date hereof as follows:

 

(a)                                 Authorization. The execution and delivery by
each Obligor of this Amendment and all other instruments and agreements required
to be executed and delivered by such Loan Party in connection with the
transactions contemplated hereby or referred to herein (collectively, the
“Amendment Documents”), and the performance by each of the Obligors of any of
its obligations and agreements under the Amendment Documents, the Loan and
Security Agreement and the other Loan Documents, as amended hereby (i) have been
duly authorized by all corporate, stockholder, partnership or limited liability
company action required to be taken by the Obligors and (ii) will not require
any consent or approval of any holders of Capital Stock of any Obligor, other
than those already obtained; (1) contravene the Organic Documents of any
Obligor; (2) violate or cause a material default under any Applicable Law or
Material Contract; or (3) result in or require the imposition of any Lien (other
than Permitted Liens and Liens granted under the Loan Documents) on any Property
of any Obligor.

 

(b)                                 Enforceability.  Each of this Amendment, the
other Amendment Documents, the Loan and Security Agreement and the other Loan
Documents, as amended hereby, is a legal, valid and binding obligation of each
Obligor party thereto, enforceable against each Obligor in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles.

 

(c)                                  Governmental Approvals.  No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Obligor of this Amendment, the other Amendment Documents, the Loan
and Security Agreement, as amended hereby, or the consummation by the Obligors
of the transactions among the parties contemplated hereby and thereby or
referred to herein.

 

(d)                                 Representations and Warranties.  The
representations and warranties set forth in Section 9 of the Loan and Security
Agreement are true and correct in all material respects (except that such
materiality qualifier shall not be applicable to the extent that any
representation or warranty is already qualified or modified by materiality in
the text thereof) as of the Fourth Amendment Closing Date, as though made on and
as of such date (except to the extent that such representation or warranty
relates to an earlier date or period, in which case as of such earlier date or
period).

 

(e)                                  No Default. No Default or Event of Default
has occurred and is continuing.

 

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(f)                                   No Material Adverse Effect. Since
January 30, 2016, there have been no changes in the financial condition of any
Obligor or Subsidiary that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

7.                                      Survival of Representations and
Warranties.  All representations and warranties made in this Amendment or in any
other Loan Document shall survive the execution and delivery of this Amendment. 
Such representations and warranties have been or will be relied upon by the
Agent and each Lender, regardless of any investigation made by the Agent or any
Lender or on their behalf and notwithstanding that the Agent or any Lender may
have had notice or knowledge of any Default at the time of any extension of
credit under the Loan and Security Agreement, and shall continue in full force
and effect as long as any Loan or any other Obligation under the Loan and
Security Agreement or any other Loan Document shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.

 

8.                                      Amendment as Loan Document.  This
Amendment constitutes a “Loan Document” under the Loan and Security Agreement.

 

9.                                      Amendment of Loan and Security
Agreement.  On the Fourth Amendment Closing Date, this Amendment shall amend the
Loan and Security Agreement.  On the Fourth Amendment Closing Date, the rights
and obligations of the parties evidenced by the Loan and Security Agreement
shall be evidenced by the Loan and Security Agreement, as amended by this
Amendment, and the other Loan Documents, and the grant of a security interest in
the Collateral by the relevant Obligors under the Loan and Security Agreement
and the other Loan Documents shall continue under but as amended by this
Amendment, and shall not in any event be terminated, extinguished or annulled
but shall hereafter be governed by the Loan and Security Agreement, as amended
by this Amendment, and the other Loan Documents.  All references to the Loan and
Security Agreement in any Loan Document or other document or instrument
delivered in connection therewith shall be deemed to refer to the Loan and
Security Agreement as amended by this Amendment.  Nothing contained herein shall
be construed as a novation of the Obligations outstanding under and as defined
in the Loan and Security Agreement, which shall remain in full force and effect,
except as modified hereby.

 

10.                               Governing Law.  THIS AMENDMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, NEW YORK GENERAL OBLIGATIONS
LAW SECTIONS 5-1401 AND 5-1402 (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO
NATIONAL BANKS).

 

11.                               Execution.  This Amendment may be executed in
counterparts, each of which taken together shall constitute one instrument. 
This Amendment may be executed and delivered by facsimile or electronic
transmission (including .pdf file), and they shall have the same force and
effect as manually signed originals.  The Agent may require confirmation by a
manually-signed original, but failure to request or deliver same shall not limit
the effectiveness or any facsimile or electronic transmission signature.

 

12.                               Limited Effect.  This Amendment relates only
to the specific matters expressly covered herein, shall not be considered to be
an amendment or waiver of any rights or remedies

 

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that the Agent or any Lender may have under the Loan and Security Agreement,
under any other Loan Document (except as expressly set forth herein) or under
Applicable Law, and shall not be considered to create a course of dealing or to
otherwise obligate in any respect the Agent or any Lender to execute similar or
other amendments or waivers or grant any amendments or waivers under the same or
similar or other circumstances in the future.

 

13.                               Ratification by Guarantors.  Each of the
Guarantors acknowledges that its consent to this Amendment is not required, but
each of the undersigned nevertheless does hereby agree and consent to this
Amendment and to the documents and agreements referred to herein.  Each of the
Guarantors agrees and acknowledges that (i) notwithstanding the effectiveness of
this Amendment, such Guarantor’s Guaranty shall remain in full force and effect
without modification thereto and (ii) nothing herein shall in any way limit any
of the terms or provisions of such Guarantor’s Guaranty or any other Loan
Document executed by such Guarantor (as the same may be amended from time to
time), all of which are hereby ratified, confirmed and affirmed in all
respects.  Each of the Guarantors hereby agrees and acknowledges that no other
agreement, instrument, consent or document shall be required to give effect to
this Section 13.  Each of the Guarantors hereby further acknowledges that the
Borrowers, the Agent and any Lender may from time to time enter into any further
amendments, modifications, terminations and/or amendments of any provisions of
the Loan Documents without notice to or consent from such Guarantor and without
affecting the validity or enforceability of such Guarantor’s Guaranty or giving
rise to any reduction, limitation, impairment, discharge or termination of such
Guarantor’s Guaranty.

 

14.                               Reaffirmation of Grant of Security Interests,
Etc.  Each Obligor hereby reaffirms its grant to Agent, for the benefit of
Secured Parties, of a continuing security interest in and Lien upon the
Collateral of such Obligor of every kind and nature, whether now owned or
hereafter acquired or arising, and wherever located, all as provided in the Loan
and Security Agreement and in the other Loan Documents, and each Obligor
reaffirms that the Obligations are and shall continue to be secured by the
continuing security interest and Lien granted by such Obligor to the Agent, for
the benefit of Secured Parties, pursuant to the Loan and Security Agreement and
the other Loan Documents.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to
Second Amended and Restated Loan and Security Agreement to be executed and
delivered as of the date first above written.

 

 

BORROWERS:

 

 

 

 

THE BON-TON DEPARTMENT STORES, INC.

 

 

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

CARSON-PIRIE SCOTT II, INC.

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

 Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

BON-TON DISTRIBUTION, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

MCRIL, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

BONSTORES REALTY ONE, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

[Bon-Ton — Consent and Fourth Amendment to Loan and Security Agreement]

 

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BONSTORES REALTY TWO, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

[Bon-Ton — Consent and Fourth Amendment to Loan and Security Agreement]

 

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The following Persons are signatories to this Fourth Amendment to Second Amended
and Restated Loan and Security Agreement in their capacity as Obligors and not
as Borrowers:

 

 

THE BON-TON STORES, INC.

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

THE BON-TON GIFTCO, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

BONSTORES HOLDINGS ONE, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

 

 

 

 

 

 

BONSTORES HOLDINGS TWO, LLC

 

 

 

 

By:

/s/ J. Gregory Yawman

 

Name:

J. Gregory Yawman

 

Title:

Vice President — General Counsel & Secretary

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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BANK OF AMERICA, N.A.,

 

as Agent, a Co-Collateral Agent, a Tranche A Lender and
an Existing Tranche A-1 Lender

 

 

 

 

 

 

By:

/s/ Andrew Cerussi

 

Name:

Andrew Cerussi

 

Title:

Director

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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CITIZENS BANK OF PENNSYLVANIA,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Don Cmar

 

Name:

Don Cmar

 

Title:

Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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BMO HARRIS BANK, N.A.,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Kara Goodwin

 

Name:

Kara Goodwin

 

Title:

Managing Director

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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FIFTH THIRD BANK,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Todd S. Robinson

 

Name:

Todd S. Robinson

 

Title:

Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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PNC BANK NATIONAL ASSOCIATION,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Jason Sylvester

 

Name:

Jason Sylvester

 

Title:

Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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SUNTRUST BANK,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Leena Stover

 

Name:

Leena Stover

 

Title:

Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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TD BANK, N.A.,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Cyntra A. Trani

 

Name:

Cyntra A. Trani

 

Title:

Senior Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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U.S. BANK NATIONAL ASSOCIATION,

 

as a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Carol Anderson

 

Name:

Carol Anderson

 

Title:

Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as a Co-Collateral Agent and a Tranche A Lender

 

 

 

 

 

 

By:

/s/ Ian Maccubbin

 

Name:

Ian Maccubbin

 

Title:

Vice President

 

[Bon-Ton — Fourth Amendment to Loan and Security Agreement]

 

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Annex A

 

[Please See Attached]

 

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Annex B

 

[Please See Attached]

 

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Schedule 1.1(a)

 

Commitments of Lenders

 

Lenders

 

Tranche A Revolver
Commitments

 

Tranche A-1 Revolver
Commitments

 

Bank of America, N.A.

 

$

154,800,000.00

 

$

150,000,000.00

 

Wells Fargo Bank, National Association

 

$

311,500,000.00

 

$

0.00

 

U.S. Bank National Association

 

$

56,900,000.00

 

$

0.00

 

Citizens Bank of Pennsylvania

 

$

50,000,000.00

 

$

0.00

 

BMO Harris Bank, N.A.

 

$

45,000,000.00

 

$

0.00

 

PNC Bank National Association

 

$

31,300,000.00

 

$

0.00

 

Fifth Third Bank

 

$

30,000,000.00

 

$

0.00

 

TD Bank, N.A.

 

$

29,500,000.00

 

$

0.00

 

SunTrust Bank

 

$

21,000,000.00

 

$

0.00

 

 

 

 

 

 

 

Total:

 

$

730,000,000.00

 

$

150,000,000.00

 

 

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Schedule 7.1(c)

 

Commercial Tort Claims

 

The Bon-Ton Department Stores, Inc. v. Utilityaccounts.com, Inc., et al, Case
No. 2010-11550 (filed November 2010 in Supreme Court of New York, County of
Erie). The suit arises out of the defendant’s failure to pay utility bills of
the Company pursuant to a contract for such services between the parties.
Judgment in the amount of $3.1 million was entered in favor of The Bon-Ton
Department Stores, Inc.. The defendant has ceased operations and has no assets
to pay the judgment.

 

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Schedule 7.2.1

 

Secondary Operating Deposit Accounts*

 

Deposit Accounts for which daily funds consolidation into the Borrower’s account
is not required:

 

Bank Name

 

Account Name

M & T Bank

 

The Bon Ton Stores Inc

Wells Fargo Bank

 

The Bon Ton Dept Stores

U.S. Bank, N.A.

 

The Bon-Ton Giftco LLC

 

--------------------------------------------------------------------------------

* Account numbers have been provided to the Agent on the Closing Date.

 

--------------------------------------------------------------------------------

 

Schedule 7.3

 

Mortgaged Real Estate

 

Store Number

 

Nameplate

 

Store Name

 

Address

4

 

Bon-Ton

 

Lewistown

 

111 East Market Street

Lewistown, PA 17044

31

 

Bon-Ton

 

Camp Hill

 

3525 Gettysburg Road

Camp Hill, PA 17011

36

 

Bon-Ton

 

Greensburg

 

Westmoreland Mall, 5256 Route 30

Greensburg, PA 15601

40

 

Bon-Ton

 

Frackville

 

Schuylkill Mall

Frackville, PA 17931

67

 

Bon-Ton

 

Lockport

 

5737 South Transit Road

Lockport, NY 14094

128

 

Elder-Beerman

 

Zanesville

 

3575 Maple Avenue

Zanesville, OH 43701

132

 

Elder-Beerman

 

Richmond

 

601 East Main Street

Richmond, IN 47374

310

 

Herberger’s

 

St. Cloud

 

600 West Saint Germain Street

St. Cloud, MN 56301

327

 

Herberger’s

 

Great Falls

 

1200 10th Avenue South

Great Falls, MT 59405

353

 

Herberger’s

 

Rosedale

 

600 Rosedale Shopping Center

Roseville, MN 55113

354

 

Herberger’s

 

Midway

 

1400 University Avenue

St. Paul, MN 55104

410

 

Younkers

 

Merle Hay

 

3800 Merle Hay Road, Suite 100

Des Moines, IA 50310

412

 

Younkers

 

Coralville

 

1421 Coral Ridge Avenue

Coralville, IA 52241

414

 

Younkers

 

Jordan Creek

 

101 Jordan Creek Parkway, Suite 6000

West Des Moines, IA 50265

432

 

Younkers

 

Eau Claire

 

4850 Golf Road

Eau Claire, WI 54701

438

 

Younkers

 

Muskegon

 

5580 Harvey Street

Muskegon, MI 49444

440

 

Younkers

 

Grandville

 

3668 Rivertown Parkway

Grandville, MI 49418

449

 

Younkers

 

Duluth

 

1600 Miller Trunk Highway

Duluth, MN 55811

501

 

Bergner’s

 

Bloomington

 

1601 Empire Street

Bloomington, IL 61701

503

 

Bergner’s

 

Pekin

 

3500 Court Street

Pekin, IL 61554

508

 

Bergner’s

 

Forsyth

 

1005 Hickory Point Mall

Forsyth, IL 62535

514

 

Carson’s

 

Aurora Northgate

 

970 North Lake Street

Aurora, IL 60506

516

 

Carson’s

 

Spring Hill

 

4000 Spring Hill Mall

Dundee, IL 60118

 

--------------------------------------------------------------------------------

 

Store Number

 

Nameplate

 

Store Name

 

Address

518

 

Bergner’s

 

White Oaks

 

2501 West Wabash

Springfield, IL 62704

521

 

Boston Store

 

Racine

 

5500 Durand Avenue

Racine, WI 53406

533

 

Carson’s

 

Edens Plaza

 

3200 Lake Avenue

Wilmette, IL 60091

549

 

Carson’s

 

Michigan City

 

305 West US Highway 20

Michigan City, IN 46360

550

 

Carson’s

 

Hawthorn

 

3 Hawthorne Center

Vernon Hills, IL 60061

556

 

Carson’s

 

Fox Valley

 

3 Fox Valley Center Drive

Aurora, IL 60504

572

 

Carson’s

 

Rochester Hills

 

400 North Adams Road

Rochester Hills, MI 48309

573

 

Carson’s

 

Partridge Creek

 

17480 Hall Road

Clinton, MI 48038

590

 

Carson’s

 

Rockford D.C.

 

4650 Shepherd Trail

Rockford, IL 61103

 

--------------------------------------------------------------------------------

 

Schedule 8.2.1

 

Existing Credit Card Arrangements

 

1.              The Private Label Credit Card Program Agreement between Comenity
Bank (formerly known as World Financial Network Bank) and The Bon-Ton
Stores, Inc., dated December 16, 2011, as amended.

 

2.              The Bank Card Merchant Agreement between The Bon-Ton Department
Stores, Inc. and Vantiv, LLC (formerly a segment of Fifth Third Bank), dated
May 13, 2004, as amended.

 

3.              The Agreement for American Expressâ Card Acceptance between The
Bon-Ton Department Stores, Inc. and American Express Travel Related Services
Company, Inc., dated December 13, 2005, as amended.

 

4.              The Merchant Services Agreement between The Bon-Ton Department
Stores, Inc. and Discover Financial Services LLC, dated March 3, 2006, as
amended.

 

--------------------------------------------------------------------------------

 

Schedule 8.5

 

Deposit Accounts*

 

Bank Name

 

Account Name
(as it appears on bank statement)

Bank of America, NA

 

The Bon-Ton Department Stores, Inc.

CBI Bank & Trust

 

The Bon-Ton Department Stores Inc Younkers Store 173

M & T Bank

 

The Bon Ton Stores Inc.

Park National Bank

 

Bon Ton Department Stores Inc FBO Bank of America, N.A.

PNC Bank

 

The Bon Ton Department Stores Inc.

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Lawson Accounts Payable

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Payroll Account

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Third Party Credit Card Receipts

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Concentration Account

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Private Label Credit Card Receipts

U.S. Bank, N.A.

 

The Bon-Ton Giftco LLC

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Store Deposit Receipt Account

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Accounts Payable EFT Account

U.S. Bank, N.A.

 

The Bon-Ton Dept Stores Inc.

United Bank

 

The Bon Ton Department Stores Inc F/B/O Bank of America N.A.

Wells Fargo Bank, N.A.

 

The Bon-Ton Department Stores

Wells Fargo Bank, N.A.

 

The Bon-Ton Department Stores

Wells Fargo Bank, N.A.

 

The Bon-Ton Department Stores

WoodTrust Bank, N.A.

 

The Bon-Ton Department Stores Inc.

 

--------------------------------------------------------------------------------

* Account numbers have been provided to the Agent on the Closing Date.

 

--------------------------------------------------------------------------------

 

Schedule 8.5(a)

 

Excluded Deposit and Disbursement Accounts*

 

(i)                                     Deposit Accounts used exclusively for
payroll, payroll taxes and employee benefits:

 

Bank Name

 

Account Name

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc — Payroll Account

 

(ii)                                  Disbursement accounts of the Obligors:

 

Bank Name

 

Account Name

U. S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Accounts Payable EFT Account

U.S. Bank, N.A.

 

The Bon-Ton Department Stores Inc. — Lawson Accounts Payable

Wells Fargo Bank, N.A.

 

The Bon Ton Department Stores Inc.

Wells Fargo Bank, N.A.

 

The Bon Ton Department Stores Inc.

 

--------------------------------------------------------------------------------

* Account numbers have been provided to the Agent on the Closing Date.

 

--------------------------------------------------------------------------------

 

Schedule 8.5(b)

 

Excluded Trust Accounts

 

None.

 

9

--------------------------------------------------------------------------------

 

Schedule 8.6.1

 

Chief Executive Offices and Other Locations of Collateral

 

Chief Executive Offices:

 

Obligor and Subsidiaries

 

Chief Executive Office

The Bon-Ton Stores, Inc.

 

2801 East Market Street, Bldg E, York, PA 17402

The Bon-Ton Department Stores, Inc.

 

2801 East Market Street, Bldg E, York, PA 17402

The Bon-Ton Giftco, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

Bon-Ton Distribution, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

McRIL, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

Carson Pirie Scott II, Inc.

 

2801 East Market Street, Bldg E, York, PA 17402

Bonstores Holdings One, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

Bonstores Holdings Two, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

Bonstores Realty One, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

Bonstores Realty Two, LLC

 

2801 East Market Street, Bldg E, York, PA 17402

 

Locations of Collateral:

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

51

 

Bon-Ton

 

York Corporate Office

 

2801 East Market Street, Bldg E, York, PA 17402

519/598/ 599

 

N/A

 

Milwaukee Corporate Office

 

331 West Wisconsin Avenue, Milwaukee, WI 53203

524

 

Bon-Ton

 

Milwaukee Data Center

 

331 West Wisconsin Avenue, Milwaukee, WI 53203

55

 

Bon-Ton

 

AP/Payroll/Information Systems

 

601 Memory Lane, Building A, York, PA 17402

191

 

Elder-Beerman

 

Dayton Corporate Office

 

3155 El-Bee Road, Dayton, OH 45439

392/399

 

Herberger’s

 

Administrative Facility

 

600 West St. Germain Street, St Cloud, MN 56301

597

 

N/A

 

Milwaukee Photo Studio

 

801 West Layton Ave., Milwaukee, WI 53221

969

 

N/A

 

New York Buying Office

 

469 7th Avenue, 5th Floor, New York, NY 10018

50/57/195

 

Bon-Ton

 

Whitehall Distribution Center

 

3585 South Church St., Whitehall, PA 18052

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

481/485

 

Bon-Ton

 

Dayton DC

 

2815 South Gettysburg Ave., Moraine, OH 45439

192

 

Bon-Ton

 

West Jefferson E Commerce Distribution Center

 

115 Enterprise Parkway, West Jefferson, OH 43162

194/198

 

Elder-Beerman

 

Fairborn Distribution Center

 

1340 E. Dayton-Yellow Springs Road, Fairborn, OH 45324

193/590

 

Carson Pirie Scott

 

Rockford Distribution Facility

 

4650 Shepherd Trail, Rockford, IL 61115

591

 

Carson Pirie Scott

 

Naperville Furniture Distribution Facility

 

1835 Jefferson Avenue, Naperville, IL 60540

980

 

Bon-Ton

 

Rockford Warehouse Annex

 

1818 Elmwood Road, Rockford, IL 61114

2

 

Bon-Ton

 

Hanover

 

400 Eisenhower Drive, Hanover, PA 17331

3

 

Bon-Ton

 

Hagerstown

 

17301 Valley Mall Road, Hagerstown, MD 21740

4

 

Bon-Ton

 

Lewistown

 

111 E. Market St., Lewistown, PA 17044

5

 

Bon-Ton

 

Martinsburg

 

800 Foxcroft Avenue, Martinsburg, WV 25401

6

 

Bon-Ton

 

Chambersburg

 

100 Chambersburg Mall, Chambersburg, PA 17201

7

 

Bon-Ton

 

Park City Furniture Gallery

 

870 Plaza Boulevard, Lancaster, PA 17601

8

 

Bon-Ton

 

Park City

 

600 Park City Center, Lancaster, PA 17601

9

 

Bon-Ton

 

Carlisle

 

750 E. High Street, Carlisle, PA 17013

12

 

Bon-Ton

 

Cumberland

 

Country Club Mall, 1262 Vocke Road, LaVale, MD 21502

14

 

Bon-Ton

 

Galleria

 

8 Galleria Mall, York, PA 17402

15

 

Bon-Ton

 

Uniontown

 

1800 Mall Run Road, Uniontown, PA 15401

16

 

Bon-Ton

 

Selinsgrove

 

1 Susquehanna Valley Mall, Suite 3, Selinsgrove, PA 17870

17

 

Bon-Ton

 

Indiana

 

2334 Oakland Ave. Ste 35, Indiana, PA 15701

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

18

 

Bon-Ton

 

Warren

 

4000 Market St. Ext., Warren, PA 16365

19

 

Bon-Ton

 

Wilton

 

3065 Rt. 50, Saratoga Springs, NY 12866

21

 

Bon-Ton

 

Oil City

 

6945 US 322, Cranberry, PA 16319

22

 

Bon-Ton

 

Brick

 

80 Brick Plaza, Brick, NJ 08723

24

 

Bon-Ton

 

Hamden

 

2300 Dixwell Ave., Hamden, CT 06514

25

 

Bon-Ton

 

Binghamton

 

Oakdale Mall, 601-635 Harry L Drive, Johnson City, NY 13790

26

 

Bon-Ton

 

Burlington

 

155 Dorset St., S. Burlington, VT, 05403

27

 

Bon-Ton

 

Williamsport

 

300 Lycoming Mall Circle, Suite 2074, Pennsdale, PA 17756

28

 

Bon-Ton

 

Bloomsburg

 

225 Columbia Mall Dr., Bloomsburg, PA 17815

29

 

Bon-Ton

 

Queensgate

 

2081 Springwood Rd., York, PA 17403

31

 

Bon-Ton

 

Camp Hill

 

3525 Gettysburg Rd., Camp Hill, PA 17011

32

 

Bon-Ton

 

Colonial Park

 

4600 Jonestown Rd., Harrisburg, PA 17109

33

 

Bon-Ton

 

Concord

 

270 Loudon Rd., Concord, NH 03301

35

 

Bon-Ton

 

Reading

 

Berkshire Mall/1665 State Hill Rd., Wyomissing, PA 19610

36

 

Bon-Ton

 

Greensburg

 

Westmoreland Mall, 5256 Route 30, Greensburg, PA 15601

37

 

Bon-Ton

 

Washington

 

1500 W. Chestnut St., Washington, PA 15301

38

 

Bon-Ton

 

Midway

 

Midway Shopping Center, Wyoming, PA 18644

39

 

Bon-Ton

 

Wilkes-Barre

 

14 Wyoming Valley Mall, Wilkes-Barre, PA 18702

40

 

Bon-Ton

 

Frackville

 

Schuylkill Mall, Frackville, PA 17931

43

 

Bon-Ton

 

Newburgh

 

1401 Rte. 300, Suite 139, Newburgh, NY 12550

44

 

Bon-Ton

 

Ithaca

 

Pyramid Mall, 40 Catherwood Rd., Ithaca, NY 14850

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

45

 

Bon-Ton

 

Johnstown

 

550 Galleria Drive, Johnstown, PA 15904

46

 

Bon-Ton

 

Jamestown

 

318 E. Fairmount Ave., Lakewood, NY 14750

47

 

Bon-Ton

 

Watertown

 

21073 Salmon Run Mall Loop W., Watertown, NY 13601

48

 

Bon-Ton

 

Westfield

 

443 E. Main St., Westfield, MA 01085

49

 

Bon-Ton

 

Glens Falls

 

578 Aviation Rd., Queensbury, NY 12804

61

 

Bon-Ton

 

Maine Mall

 

364 Maine Mall, South Portland, ME 04106

62

 

Bon-Ton

 

Eastern Hills

 

4545 Transit Rd., Williamsville, NY 14221

63

 

Bon-Ton

 

Sheridan

 

1706 Sheridan Dr., Buffalo, NY 14223

64

 

Bon-Ton

 

Southgate

 

1090 Union Rd., West Seneca, NY 14224

65

 

Bon-Ton

 

McKinley

 

3701 McKinley Pkway., Blasdell, NY 14219

67

 

Bon-Ton

 

Lockport

 

5737 S. Transit Rd., Lockport, NY 14094

68

 

Bon-Ton

 

Olean

 

402 N. Union St., Olean, NY 14760

69

 

Bon-Ton

 

Niagara Falls

 

6929 Williams Rd., Niagara Falls, NY 14304

70

 

Bon-Ton

 

State College

 

2901 East College Ave., Suite 600, State College, PA 16801

72

 

Bon-Ton

 

Bethlehem

 

2524 Schoenersville Rd, Bethlehem, PA 18017

73

 

Bon-Ton

 

Allentown South

 

3300 Lehigh Street, Allentown, PA 18103

76

 

Bon-Ton

 

Easton

 

Palmer Park Mall, Suite 146, 2455 Park Avenue, Easton, PA 18045

78

 

Bon-Ton

 

Quakertown

 

751 SW End Blvd., Quakertown, PA 18951

80

 

Bon-Ton

 

Phillipsburg

 

1200 Highway 22 East, Phillipsburg, NJ 08865

81

 

Bon-Ton

 

Doylestown

 

456 North Main St, Doylestown, PA 18901

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

82

 

Bon-Ton

 

Trexlertown

 

6900 Hamilton Blvd., Trexlertown, PA 18087

83

 

Bon-Ton

 

Stroudsburg

 

Rt 611 & Bridge St., Stroudsburg, PA 18360

84

 

Bon-Ton

 

Elmira

 

3300 Chambers Rd. Suite 5130, Horseheads, NY 14845

92

 

Bon-Ton

 

Massena

 

Rt 37 & 131, Massena, NY 13662

94

 

Bon-Ton

 

Camillus

 

5301 W. Genesee, Camillus, NY 13031

101

 

Elder-Beerman

 

Dayton Mall

 

2700 St. Rt. 725, Dayton, OH 45459

107

 

Elder-Beerman

 

Huber Heights

 

8821 Old Troy Pike, Huber Heights, OH 45424

115

 

Elder-Beerman

 

Beavercreek

 

2727 Fairfield Commons, Beavercreek, OH 45431

117

 

Elder-Beerman

 

Piqua Mall

 

987 E. Ash Street, Piqua, OH 45356

118

 

Elder-Beerman

 

Athens

 

1004 E. State Street, Athens, OH 45701

119

 

Elder-Beerman

 

New Philadelphia

 

400 Mill Avenue, New Philadelphia, OH 44663

121

 

Elder-Beerman

 

Kettering

 

2050 E. Dorothy Lane, Dayton, OH 45420

125

 

Elder-Beerman

 

Lancaster

 

1730 River Valley Circle South, Lancaster, OH 43130

126

 

Elder-Beerman

 

Newark

 

771 30th Street, Newark, OH 43056

127

 

Elder-Beerman

 

Defiance

 

1500 N. Clinton Street, Defiance, OH 43512

128

 

Elder-Beerman

 

Zanesville

 

3575 Maple Avenue, Zanesville, OH 43701

129

 

Elder-Beerman

 

Marion, OH

 

1475 Marion-Waldo, Marion, OH 43302

130

 

Elder-Beerman

 

Chillicothe

 

1080 N. Bridge Street, Chillicothe, OH 45601

132

 

Elder-Beerman

 

Richmond

 

601 Promenade, Richmond, IN 47374

135/921

 

Elder-Beerman

 

Middletown

 

3459 Town Mall Blvd., Franklin, OH 45005

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

137

 

Elder-Beerman

 

Sandusky

 

4314 Milan Road, Sandusky, OH 44870

138

 

Younkers

 

Plover

 

1780 Plover Road, Plover, WI 54467

140

 

Boston Store

 

Kohler

 

4030 Highway 28, Kohler, WI 53044

141

 

Bon-Ton

 

Dubois

 

300 Commons Drive, DuBois, PA 15801

142

 

Boston Store

 

West Bend

 

1291 W. Paradise Drive, West Bend, WI 53095

143

 

Younkers

 

Coldwater

 

373 North Willowbrook Rd., Suite Z, Coldwater, MI 49036

144

 

Elder-Beerman

 

Alliance

 

2500 W. State Street, Alliance, OH 44601

147

 

Elder-Beerman

 

Wooster

 

4095 Burbank Road, Wooster, OH 44691

148

 

Elder-Beerman

 

Morgantown Mall

 

9550 Mall Road, Morgantown, WV 26505

149

 

Bon-Ton

 

Erie

 

810 Mill Creek Mall Road, Erie, PA 16565

150

 

Carson’s

 

Warsaw

 

2856 Frontage Road, Warsaw, IN 46580

151

 

Elder-Beerman

 

Frankfort

 

202 Limestone Drive, Frankfort, KY 40601

152

 

Elder-Beerman

 

Findlay Village Mall

 

1800 Tiffin Avenue, Findlay, OH 45840

153

 

Elder-Beerman

 

Bowling Green

 

1234 N. Main Street, Bowling Green, OH 43402

154

 

Carson’s

 

Howell

 

3599 E. Grand River Avenue, Howell, MI 48843

155

 

Elder-Beerman

 

Westgate

 

3311 Secor Road, Toledo, OH 43606

158

 

Elder-Beerman

 

Adrian

 

1357 S. Main Street, Adrian, MI 49221

159

 

Carson’s

 

Monroe

 

2121 N. Monroe Street, Monroe, MI 48161

160

 

Carson’s

 

Benton Harbor

 

1800 Pipestone Road, Benton Harbor, MI 49022

161

 

Younkers

 

Midland Mall

 

6830 Eastman Road, Midland, MI 48642

163

 

Younkers

 

Jackson

 

1826 W. Michigan Avenue, Jackson, MI 49202

165

 

Elder-Beerman

 

Beloit

 

100 Beloit Mall, Beloit, WI 53511

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

171

 

Carson’s

 

Dekalb

 

2550 Sycamore Road, Dekalb, IL 60115

172

 

Carson’s

 

Marion, IN

 

1129 N. Baldwin, Marion, IN 46952

173

 

Younkers

 

Muscatine

 

1903 Park Avenue, Muscatine, IA 52761

174

 

Carson’s

 

Anderson

 

2101 State Road, Anderson, IN 46016

175

 

Carson’s

 

Mattoon

 

700 Broadway Avenue East, Mattoon, IL 61938

177

 

Carson’s

 

Danville

 

2917 N. Vermillion, Danville, IL 61832

178

 

Carson’s

 

Jasper

 

3875 Newton Street, Jasper, IN 47546

179

 

Carson’s

 

Honey Creek

 

3401 South US Hwy 41, Terre Haute, IN 47802

180

 

Elder-Beerman

 

Paducah

 

5105 Hinkleville Road #500, Paducah, KY 42001

181

 

Carson’s

 

Columbus

 

2104 25th Street, Columbus,IN 47201

182

 

Carson’s

 

Muncie

 

3501 N. Granville Avenue, Muncie, IN 47303

184

 

Carson’s

 

Kokomo

 

1540 East Boulevard, Kokomo, IN 46902

185

 

Carson’s

 

Elkhart

 

3701 South Main, Elkhart, IN 46517

186

 

Younkers

 

Green Bay Furniture Gallery

 

201 Bay Park Square, Green Bay, WI 54304

189/190

 

Elder-Beerman

 

South Towne Furniture Gallery

 

2400 State Route 725, Dayton, OH 45459

199

 

Carson’s

 

Glenbrook Square

 

4201 Coldwater Rd, Fort Wayne, IN 46805

203

 

Elder-Beerman

 

Clarksburg

 

2700 Meadowbrook Mall, Bridgeport, WV 26330

204

 

Elder-Beerman

 

Parkersburg

 

600 Grand Central Mall, PO Box 6084, Parkersburg, WV 26105

205

 

Elder-Beerman

 

Ashland

 

10699 US Route 60, Ashland, KY 41102

206

 

Elder-Beerman

 

Kanawha

 

125 Kanawha Mall, Charleston, WV 25387

207

 

Elder-Beerman

 

St. Clairsville

 

67800 Mall Road, St. Clairsville, OH 43950

209

 

Elder-Beerman

 

Winfield

 

200 Liberty Sq. Shopping Center, Hurricane, WV 25526

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

310

 

Herberger’s

 

Centre Square

 

600 W. Saint Germain Street, St. Cloud, MN 56301

311

 

Herberger’s

 

Thunderbird Mall

 

1440 South 12th Avenue, Virginia, MN 55792

312

 

Herberger’s

 

Cedar Mall

 

2900 South Main, Rice Lake, WI 54868

313

 

Herberger’s

 

Westridge Mall

 

2001 West Lincoln Ave, Fergus Falls, MN 56537

314

 

Herberger’s

 

Marketplaz Mall

 

110 North Minnesota Street, New Ulm, MN 56073

315

 

Herberger’s

 

Watertown Mall

 

1300 9th Avenue SE, Watertown, SD 57201

316

 

Herberger’s

 

Viking Plaza

 

3015 Hwy 29 S, Suite 4037, Alexandria, MN 56308

317

 

Herberger’s

 

Holiday Village Shopping Center — Havre

 

1753 Highway 2 NW, Havre, MT 59501

318

 

Herberger’s

 

Valley View Mall

 

4000 State Road 16, LaCrosse, WI 54601

319

 

Herberger’s

 

Northbridge Mall

 

2440 Bridge Avenue, Albert Lea, MN 56007

320

 

Herberger’s

 

Moorhead Center Mall

 

400 Center Avenue, Moorhead, MN 56560

321

 

Herberger’s

 

Kirkwood Mall

 

641 Kirkwood Mall, Bismarck, ND 58504

322

 

Herberger’s

 

Logan

 

1350 North Main Street, Logan, UT 84341

323

 

Herberger’s

 

Westgate Mall/Brainerd

 

14136 Baxter Drive, Suite 1, Baxter, MN 56425

324

 

Herberger’s

 

Pocatello

 

4235 Yellowstone Highway, Chubbuck, ID 83202

325

 

Herberger’s

 

Rimrock Mall

 

300 S. 24th Street West, Billings, MT 59102

326

 

Herberger’s

 

Quincy Place Shopping Center

 

1110 Quincy Avenue, Ottumwa, IA 52501

327

 

Herberger’s

 

Holiday Village Shopping Center — Great Falls

 

1200 10th Avenue S, Great Falls, MT 59405

328

 

Herberger’s

 

Rushmore Mall

 

2200 North Maple, Rapid City, SD 57701

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

329

 

Herberger’s

 

White Mountain Mall

 

2445 Foothill Boulevard, Rock Springs, WY 82901

330

 

Herberger’s

 

Prairie Hills Mall

 

1611 3rd Avenue W., Dickinson, ND 58601

331

 

Herberger’s

 

Dakota Square

 

2400 10th Street SW, Minot, ND 58701

332

 

Herberger’s

 

Kandi Mall

 

1605 1st Street South, Willmar, MN 56201

333

 

Boston Store

 

Heritage Village

 

1645 North Spring Street, Beaver Dam, WI 53916

334

 

Herberger’s

 

Sunset Plaza

 

1700 Market Lane, Norfolk, NE, 68701

335

 

Herberger’s

 

Imperial Mall Shopping Center

 

3001 West 12th, Suite 4, Hastings, NE, 68901

336

 

Herberger’s

 

The Mall

 

1100 South Dewey, North Platte, NE, 69101

338

 

Herberger’s

 

Hilltop Mall

 

4915 2nd Avenue, Kearney, NE, 68847

339

 

Herberger’s

 

Monument Mall

 

2302 Frontage Road, Box 29, Scottsbluff, NE, 69361

340

 

Herberger’s

 

Kalispell Center Mall

 

20 North Main, Kalispell, MT 59901

341

 

Herberger’s

 

Blaine

 

301 Northtown Drive Northeast, Blaine, MN 55434

342

 

Herberger’s

 

Stillwater

 

2001 Washington Avenue, Stillwater, MN 55082

343

 

Herberger’s

 

Lakewood Mall

 

3315 6th Ave SE, Suite 2, Aberdeen, SD 57401

344

 

Herberger’s

 

Mesa Mall

 

2424 US Hwy 6 & 50, Grand Junction, CO 81505

345

 

Herberger’s

 

River Hills Mall

 

1850 Adams Street, Mankato, MN 56001

348

 

Herberger’s

 

Paul Bunyan Mall

 

1201 Paul Bunyan Drive, Bemidji, MN 56601

349

 

Herberger’s

 

Butte Plaza Mall

 

3100 Harrison Avenue, Suite 5A, Butte, MT 59701

351

 

Herberger’s

 

Southgate Mall

 

2901 Brooks Avenue, Missoula, MT 59801

352

 

Herberger’s

 

West Acres Shopping Center

 

3902 13th Avenue S, Fargo, ND 58103

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

353

 

Herberger’s

 

Rosedale Shopping Center

 

600 Rosedale Shopping Center, Roseville, MN 55113

354

 

Herberger’s

 

Midway Marketplace

 

1400 University Place, St. Paul, MN 55104

355

 

Herberger’s

 

Southtown Mall

 

7831 Southtown Center, Bloomington, MN 55431

356

 

Herberger’s

 

Edina

 

300 Southdale Center, Edina, MN 55435

357

 

Herberger’s

 

Apache Mall

 

1201 12th Street SW, Rochester, MN 55902

401

 

Younkers

 

North Grand Mall

 

2801 North Grand Mall, Ames, IA 50010

402

 

Younkers

 

Southbridge Mall

 

102 South Delaware, Mason City, IA 50401

403

 

Younkers

 

Crossroads Mall

 

US Hwy 20 & South 29th St, Fort Dodge, IA 50501

404

 

Younkers

 

Marshall Town Center

 

2500 South Center Street, Marshalltown, IA 50158

406

 

Younkers

 

Oakview Mall

 

3201 South 144th Street, Omaha, NE, 68144

407

 

Younkers

 

College Square Mall

 

6301 University Avenue, Cedar Falls, IA 50613

408

 

Younkers

 

Crossroads Center

 

2060 Crossroads Boulevard, Waterloo, IA 50702

409

 

Younkers

 

Oak Park Mall

 

Highway 218 & 18th St. Northwest, Austin, MN 55912

410

 

Younkers

 

Merle Hay Mall

 

3800 Merle Hay Rd, Suite 100, Des Moines, IA 50310

412

 

Younkers

 

Coral Ridge Mall

 

1421 Coral Ridge Avenue, Coralville, IA 52241

413

 

Younkers

 

Lindale Mall

 

4444 1st Avenue NE, Cedar Rapids, IA 52402

414

 

Younkers

 

Jordan Creek

 

101 Jordan Creek Parkway, Suite 6000, West Des Moines, IA 50266

418

 

Younkers

 

Kennedy Mall

 

555 John F. Kennedy Road, Dubuque, IA 52002

419

 

Younkers

 

Westroads Mall

 

707 N. 102nd St., Omaha, NE, 68114

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

421

 

Younkers

 

Northpark Mall

 

320 West Kimberly Road, Davenport, IA 52806

422

 

Younkers

 

Southpark Mall

 

4200 16th Street, Moline, IL 61265

423

 

Younkers

 

Southridge Mall

 

1111 E Army Post Road, Suite 2003, Des Moines, IA 50315

424

 

Younkers

 

Empire Mall

 

3500 Empire Mall, Sioux Falls, SD 57106

428

 

Younkers

 

Westdale Mall

 

2600 Edgewood Road SW, Cedar Rapids, IA 52404

429

 

Younkers

 

Southern Hills Mall

 

4380 Sergeant Road, Sioux City, IA 51106

430

 

Younkers

 

Westland Mall

 

550 South Gear, West Burlington, IA 52655

432

 

Younkers

 

Oakwood Mall

 

4850 Golf Road, Eau Claire, WI 54701

437

 

Younkers

 

Valley West Mall

 

1551 Valley West Drive, West Des Moines, IA 50266

438

 

Younkers

 

Lakes Mall

 

5580 Harvey Street, Muskegon, MI 49444

439

 

Younkers

 

Downtown Historic Sturgeon Bay

 

58 North 3rd Avenue, Sturgeon Bay, WI 54235

440

 

Younkers

 

Rivertown Crossings

 

3668 Rivertown Parkway, Grandville, MI 49418

442

 

Younkers

 

Westwood Mall

 

3050 US Hwy 41 West, Marquette, MI 49855

443

 

Younkers

 

Cherryland Center

 

1776 South Garfield Avenue, Traverse City, MI 49686

445

 

Younkers

 

Lansing Mall

 

5330 West Saginaw Highway, Lansing, MI 48917

447

 

Younkers

 

Gateway Mall

 

6100 O Street, Lincoln, NE, 68505

448

 

Younkers

 

Shoppes at Woodridge

 

503 East Ives Street, Marshfield, WI 54449

449

 

Younkers

 

Miller Hill Mall

 

1600 Miller Trunk Highway, Duluth, MN 55811

451

 

Younkers

 

Conestoga Mall

 

3404 West 13th Street, Grand Island, NE, 68803

454

 

Younkers

 

Wausau Mall

 

300 Forest Street, Wausau, WI 54403

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

456

 

Younkers

 

Forest Mall

 

755 West Johnson Street, Fond Du Lac, WI 54935

457

 

Younkers

 

Bay Park Square

 

101 Bay Park Square, Green Bay, WI 54304

461

 

Younkers

 

Edgewater Plaza

 

700 E Magnolia Street, Manitowoc, WI 54220

462

 

Younkers

 

Fox River Mall

 

4301 W. Wisconsin Avenue, Appleton, WI 54913

463

 

Younkers

 

Westshore Mall

 

12331 James Street, Holland, MI 49424

464

 

Younkers

 

Merridian

 

1982 W. Grand River Avenue, Okemos, MI 48864

465

 

Carson’s

 

Birchwood Mall

 

4450 24th Avenue, Fort Gratiot, MI 48059

466

 

Younkers

 

Pine Tree Mall

 

2600 Roosevelt Road, Marinette, WI 54143

469

 

Younkers

 

Mariner Mall

 

69 North 28th St. East, Superior, WI 54880

475

 

Younkers

 

Bay City Mall

 

4131 E. Wilder Road, Bay City, MI 48706

501

 

Bergner’s

 

Eastland Mall

 

1601 Empire Street, Bloomington, IL 61701

502

 

Bergner’s

 

Peru Mall

 

3940 Route 251, Suite 01, Peru, IL 61354

503

 

Bergner’s

 

East Court Village

 

3536 Court Street, Pekin, IL 61554

504

 

Bergner’s

 

Marketplace Mall

 

2000 North Neil Street, Champaign, IL 61820

505

 

Bergner’s

 

Sandburg Mall

 

1150 West Carl Sandburg Drive, Galesburg, IL 61401

506

 

Bergner’s

 

Sheridan Village

 

4125 North Sheridan Road, Peoria, IL 61614

507

 

Bergner’s

 

Quincy Mall

 

3347 Broadway, Quincy, IL 62301

508

 

Bergner’s

 

Hickory Point Mall

 

1005 Hickory Point Mall, Forsyth, IL 62535

510

 

Boston Store

 

Janesville Mall

 

2500 Milton Avenue, Janesville, WI 53545

511

 

Bergner’s

 

Northland Mall

 

2900 East Lincolnway, Sterling, IL 61081

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

512

 

Bergner’s

 

Cherryvale Mall

 

7200 Harrison Avenue, Rockford, IL 61112

513/923

 

Bergner’s

 

Machesney Mall

 

8790 North 2nd Street, Machesney Park, IL 61115

514/920

 

Carson’s

 

Northgate Shopping Center

 

970 North Lake Street, Aurora, IL 60506

515

 

Carson’s

 

Joliet

 

3340 Mall Loop Drive, Joliet, IL 60435

516

 

Carson’s

 

Spring Hill Mall

 

4000 Spring Hill Mall, Dundee, IL 60118

517

 

Carson’s

 

Randhurst Mall

 

1025 Center Drive, Mount Prospect, IL 60056

518

 

Bergner’s

 

White Oaks Mall

 

2501 West Wabash, Springfield, IL 62704

519

 

Boston Store

 

Grand Avenue Mall

 

331 West Wisconsin Avenue, Milwaukee, WI 53203

520

 

Boston Store

 

Bay Shore Mall

 

5701 North Lydell Ave, Glendale, WI 53217

521

 

Boston Store

 

Regency Mall

 

5500 Durand Avenue, Racine, WI 53406

522

 

Boston Store

 

Brookfield Square

 

15875 West Bluemound Road, Brookfield, WI 53005

523

 

Boston Store

 

Southridge Mall

 

5300 South 76th Street, Greendale, WI 53129

526

 

Boston Store

 

East Towne Mall

 

53 East Towne Mall, Madison, WI 53704

527

 

Boston Store

 

Mayfair Mall

 

2400 North Mayfair Road, Milwaukee, WI 53226

528

 

Boston Store

 

West Towne Mall

 

36 West Towne Mall, Madison, WI 53719

529

 

Boston Store

 

Brookfield Furniture

 

18615 West Bluemound Road, Brookfield, WI 53045

530

 

Carson’s

 

Evergreen Mall

 

9700 South Western Avenue, Evergreen Park, IL 60805

531

 

Carson’s

 

Yorktown Mall

 

230 Yorktown Shopping Center, Lombard, IL 60148

532

 

Carson’s

 

Woodmar Mall

 

6600 Indianapolis Boulevard, Hammond, IN 46320

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

533

 

Carson’s

 

Eden’s Plaza

 

3200 Lake Avenue, Wilmette, IL 60091

535

 

Carson’s

 

Stratford Square

 

4 Stratford Square, Bloomingdale, IL 60108

536

 

Carson’s

 

Gateway Mall

 

120 South Riverside Plaza, Chicago, IL 60606

538

 

Carson’s

 

Chicago Ridge Mall

 

9800 South Ridgeland Avenue, Chicago Ridge, IL 60415

539

 

Carson’s

 

Harlem-Irving Mall

 

4200 N. Harlem Avenue, Norridge, IL 60706

540

 

Carson’s

 

Lincoln Mall

 

300 Lincoln Mall, Matteson, IL 60443

541

 

Carson’s

 

North Riverside Park Mall

 

7505 West Cermak Road, North Riverside, IL 60546

542

 

Carson’s

 

Westfield Shoppingtown Southlake

 

1995 Southlake Mall, Merrillville, IN 46410

543

 

Carson’s

 

Orland Square

 

4 Orland Square, Orland Park, IL 60462

546

 

Carson’s

 

Yorktown Furniture

 

2 Yorktown Mall, Lombard, IL 60148

547

 

Carson’s

 

Eden Furniture

 

3232 Lake Avenue, Ste 330, Wilmette, IL 60091

548

 

Carson’s

 

Schaumburg Furniture

 

830 East Golf Road, Schaumburg, IL 60173

549

 

Carson’s

 

Marquette Mall

 

305 West US Hwy 20, Michigan City, IN 46360

550

 

Carson’s

 

Westfield Shoppingtown - Hawthorn

 

3 Hawthorne Center, Vernon Hills, IL 60061

551

 

Carson’s

 

Ford City Mall

 

7601 South Cicero Avenue, Chicago, IL 60652

552

 

Carson’s

 

Lincolnwood Town Center

 

3333 West Touhy, Lincolnwood, IL 60712

553

 

Carson’s

 

Northfield Square Mall

 

1602 North State Rt. 50, Bourbonnais, IL 60914

554

 

Carson’s

 

Charlestowne Mall

 

3850 East Main Street, St. Charles, IL 60174

555

 

Carson’s

 

Hawthorn Furniture Gallery

 

480 Ring Drive, Vernon Hills, IL 60061

556

 

Carson’s

 

Fox Valley Mall

 

3 Fox Valley Center, Aurora, IL 60504

 

--------------------------------------------------------------------------------

 

Location
Number

 

Nameplate

 

Location/Store Name

 

Address

561

 

Carson’s

 

Orland Square Furniture Gallery

 

66 Orland Square, Orland Park, IL 60462

562

 

Carson’s

 

Streets of Woodfield

 

601 North Martingale Road, Schaumburg, IL 60173

563

 

Bergner’s

 

The Shoppes at Grand Prairie

 

5203 West War Memorial Drive, Peoria, IL 61615

564

 

Carson’s

 

Circle Centre

 

1 West Washington Street, Indianapolis, IN 46204

571

 

Carson’s

 

Laurel Park Place

 

17625 Newburgh Road, Livonia, MI 48152

572

 

Carson’s

 

Meadowbrook Village

 

400 North Adams Road, Rochester Hills, MI 48309

573

 

Carson’s

 

Partridge Creek

 

17480 Hall Road, Clinton, MI 48038

579

 

Carson’s

 

Naperville Furniture Clearance

 

1835 Jefferson Avenue, Naperville, IL 60540

927

 

Boston Store

 

Boston Store Clearance Center

 

5659 S. 27th Street, Milwaukee, WI 53221

928

 

Carson’s

 

Carson’s Clearance Center

 

16727 Torrence Avenue, Lansing, IL 60438

929

 

Carson’s

 

Carson’s Clearance Center

 

7234 Dempster, Morton Grove, IL 60053

930

 

Herberger’s

 

Herberger’s Clearance Center

 

1717 Beam Avenue, Maplewood, MN 55109

972

 

N/A

 

Huntington

 

925-939 Third Avenue, Huntington, WV 25701

 

--------------------------------------------------------------------------------

 

Schedule 9.1.4

 

Names and Capital Structure

 

 

 

 

 

 

 

Authorized

 

Number and/or

 

Holders

 

 

 

 

 

 

Equity

 

% of Equity

 

of Equity

Issuer

 

Jurisdiction

 

Securities

 

Interests

 

Interests

 

Interests

Carson Pirie Scott II, Inc.

 

Florida

 

Common Stock

 

1,000 shares

 

100 shares

 

The Bon-Ton Department Stores, Inc.

McRIL, LLC

 

Virginia

 

Limited Liability Company Interests

 

N/A

 

100%

 

Carson Pirie Scott II, Inc.

Bon-Ton Distribution, LLC

 

Illinois

 

Limited Liability Company Interests

 

N/A

 

100%

 

Carson Pirie Scott II, Inc.

The Bon-Ton Department Stores, Inc.

 

Pennsylvania

 

Common Stock

 

40,000,000 shares

 

10 shares

 

The Bon-Ton Stores, Inc.

 

 

 

 

Class A Common Stock

 

20,000,000 shares

 

0 shares

 

N/A

 

 

 

 

Preferred Stock

 

5,000,000 shares

 

0 shares

 

N/A

The Bon-Ton Giftco, LLC

 

Virginia

 

Limited Liability Company Interests

 

N/A

 

100%

 

The Bon-Ton Department Stores, Inc.

Bonstores Holdings One, LLC

 

Delaware

 

Limited Liability Company Interests

 

N/A

 

100%

 

The Bon-Ton Department Stores, Inc.

Bonstores Holdings Two, LLC

 

Delaware

 

Limited Liability Company Interests

 

N/A

 

100%

 

The Bon-Ton Department Stores, Inc.

Bonstores Realty One, LLC

 

Delaware

 

Limited Liability Company Interests

 

N/A

 

100%

 

Bonstores Holdings One, LLC

Bonstores Realty Two, LLC

 

Delaware

 

Limited Liability Company Interests

 

N/A

 

100%

 

Bonstores Holdings Two, LLC

 

--------------------------------------------------------------------------------

 

Schedule 9.1.5

 

Former Corporate Names and Trade Names:

 

Former Corporate Names:

 

Legal Name

 

Type of

 

 

 

Termination

 

Surviving

of Entity

 

Organization

 

Jurisdiction

 

Date

 

Entity

The Bon-Ton Corp.

 

C-Corporation

 

Delaware

 

4/1/2006

 

The Bon-Ton Stores, Inc.

The Bon-Ton Properties - Irondequoit G.P., Inc.

 

C-Corporation

 

New York

 

12/31/2007

 

The Bon-Ton Department Stores, Inc.

The Bon-Ton Properties - Irondequoit, L.P.

 

Limited Partnership

 

Delaware

 

12/31/2007

 

None

The Bon-Ton Trade Corp.

 

C-Corporation

 

Delaware

 

4/1/2006

 

The Bon-Ton Trade, LLC

Capital City Commons Realty, Inc.

 

C-Corporation

 

Pennsylvania

 

2/3/2007

 

The Bon-Ton Department Stores, Inc.

Carson Pirie Scott, LLC

 

Limited Liability Company

 

Alabama

 

12/31/2007

 

The Bon-Ton Department Stores, Inc.

Carson Pirie Scott, Inc.

 

C-Corporation

 

Alabama

 

10/28/2006

 

Carson Pirie Scott, LLC

Elder-Beerman Holdings, Inc.

 

C-Corporation

 

Ohio

 

12/31/2007

 

The Elder-Beerman Stores Corp.

Elder-Beerman Operations, LLC

 

Limited Liability Company

 

Ohio

 

12/31/2007

 

The Elder-Beerman Stores Corp.

Elder-Beerman West Virginia, Inc.

 

C-Corporation

 

West Virginia

 

12/31/2008

 

The Elder-Beerman Stores Corp.

Herberger’s Department Stores, LLC

 

Limited Liability Company

 

Minnesota

 

12/31/2007

 

The Bon-Ton Department Stores, Inc.

Bon-Ton Distribution, Inc.

 

C-Corporation

 

Illinois

 

12/31/2013

 

Bon-Ton Distribution, LLC

The Bon-Ton Giftco, Inc.

 

C-Corporation

 

Florida

 

1/23/2013

 

The Bon-Ton Giftco, LLC

The Bon-Ton Properties - Eastview G.P., Inc.

 

C-Corporation

 

New York

 

9/17/2012

 

The Bon-Ton Department Stores, Inc.

The Bon-Ton Properties - Eastview, L.P.

 

Limited Partnership

 

Delaware

 

9/1/2012

 

None

 

--------------------------------------------------------------------------------

 

Legal Name

 

Type of

 

 

 

Termination

 

Surviving

of Entity

 

Organization

 

Jurisdiction

 

Date

 

Entity

The Bon-Ton Properties - Greece Ridge G.P., Inc.

 

C-Corporation

 

New York

 

9/17/2012

 

The Bon-Ton Department Stores, Inc.

The Bon-Ton Properties - Greece Ridge, L.P.

 

Limited Partnership

 

Delaware

 

9/1/2012

 

None

The Bon-Ton Properties- Marketplace G.P., Inc.

 

C-Corporation

 

New York

 

3/13/14

 

The Bon-Ton Department Stores, Inc

The Bon-Ton Properties - Marketplace, L.P.

 

Limited Partnership

 

Delaware

 

3/10/14

 

None

The Bon-Ton Stores of Lancaster, Inc.

 

C-Corporation

 

Pennsylvania

 

2/2/2014

 

The Bon-Ton Department Stores, Inc.

The Bon-Ton Trade, LLC

 

Limited Liability Company

 

Delaware

 

12/22/2011

 

The Bon-Ton Department Stores, Inc.

Carson Pirie Scott II, Inc.

 

C-Corporation

 

Mississippi

 

1/22/2013

 

Carson Pirie Scott II, Inc. (a FL corp.)

The Elder-Beerman Stores Corp.

 

C-Corporation

 

Ohio

 

12/31/2012

 

The Bon-Ton Department Stores, Inc.

 

Acquisitions

 

Parisian:  Effective October 31, 2006, pursuant to an Asset Purchase Agreement
dated October 25, 2006 between The Bon-Ton Stores, Inc. (“Parent”) and Belk,
Inc., which was assigned by Parent to The Bon-Ton Department Stores, Inc., The
Bon-Ton Department Stores, Inc. acquired four Parisian department stores and the
rights for the construction of a fifth Parisian store.

 

Trade Names:

 

Entity

 

Trade Names Used

The Bon-Ton Department Stores, Inc.

 

Bon-Ton; Boston Store; Capital City Commons; Carson Pirie Scott; Carson’s;
Elder-Beerman; Herberger’s; Parisian; Younkers

Bon-Ton Distribution, LLC

 

Carson Pirie Scott Furniture Clearance Center

The Bon-Ton Giftco, LLC

 

Bon-Ton

Carson Pirie Scott II, Inc.

 

Bon-Ton; Boston Store; Herberger’s; Younkers

McRIL, LLC

 

Bergner’s; Carson Pirie Scott; Carson’s; Carson Pirie Scott Furniture Gallery;
Younkers

 

--------------------------------------------------------------------------------

 

Schedule 9.1.12

 

Intellectual Property

 

Trademarks

 

Owner: The Bon-Ton Department Stores, Inc.

 

Trademark Name

 

Registration/Serial
Number

 

Registration Date/Filing
Date

BEAUTY STATION

 

86/433,458

 

10/24/2014

BOSTON STORE

 

Wisconsin 6,482

 

8/3/1988

BOSTON STORE

 

3,666,012

 

8/11/2009

BT♦JEWELED (WORD AND DESIGN)

 

3,842,899

 

8/31/2010

CHEF’S QUARTERS

 

86/532,617

 

2/12/2015

CHEF’S QUARTERS

 

86,979,074

 

2/12/2015

CUDDLE BEAR

 

2,001,829

 

9/17/1996

CUDDLE BEAR

 

4,552,374

 

6/17/2014

DESIGN DISTRICT

 

85/920,357

 

5/1/2013

ELDER-BEERMAN (stylized)

 

1,332,638

 

4/23/1985

EXERTEK

 

3,528,518

 

11/4/2008

EXERTEK

[g167821kg13i001.gif]

 

 

 

 

 

 

4,736,593

 

5/12/2015

(DESIGN)

 

 

 

 

JENNY BUCHANAN

 

2,006,731

 

10/8/1996

JENNY BUCHANAN

 

2,015,870

 

11/12/1996

JENNY BUCHANAN

 

2,015,874

 

11/12/1996

LET US FIND IT

 

4,626,285

 

10/21/2014

LIVING GREEN

 

3,854,437

 

9/28/2010

LOVESTYLEREWARDS

 

87,063,073

 

6/7/2016

ONE · PHILOSOPHY (WORD AND DESIGN)

 

3,778,686

 

4/20/2010

RAMPED UP

 

3,908,977

 

1/18/2011

RU RAMPED UP (WORD AND DESIGN)

 

3,909,005

 

1/18/2011

SANTA’S PANTRY

 

87,019,592

 

4/29/2016

STYLE ON THE STREET

 

85/850,871

 

2/15/2013

STYLEREWARDS

 

87,063,086

 

6/7/2016

SUSQUEHANNA TRAIL OUTFITTERS

 

1,397,712

 

6/17/1986

THE BON-TON

 

1,680,687

 

3/24/1992

THE BON-TON (DESIGN)

 

1,661,242

 

10/15/1991

TRENDÉVOUS

 

4,496,279

 

3/11/2014

 

--------------------------------------------------------------------------------

 

Trademark Name

 

Registration/Serial
Number

 

Registration Date/Filing
Date

YOUR MODERN AMERICAN SYTLE SOURCE

 

86/813,313

 

11/9/2015

YOUR MODERN AMERICAN STYLE RESOURCE

 

86/813,434

 

11/9/2015

 

[g167821kg13i002.jpg]

 

 

86/719,486

 

8/10/2015

 

[g167821kg13i003.jpg]

 

 

86/719,495

 

8/10/2015

 

[g167821kg13i004.jpg]

 

 

86/719,465

 

8/10/2015

 

[g167821kg13i005.jpg]

 

 

86/719,481

 

8/10/2015

 

[g167821kg13i006.jpg]

 

 

86/719,476

 

8/10/2015

 

[g167821kg13i007.jpg]

 

 

86/719,490

 

8/10/2015

 

[g167821kg13i008.jpg]

 

 

86/719,473

 

8/10/2015

ZOE&BELLA @BT

 

4,259,055

 

12/14/2011

ZOE&BELLA @BT

 

4,357,088

 

6/25/2013

ZOE&BELLA @BT

 

86/898,865

 

2/5/2016

 

Owner: Carson Pirie Scott II, Inc.

 

Trademark Name

 

Registration/Serial
Number

 

Registration Date/Filing
Date

BERGNER’S

 

3,892,546

 

12/21/2010

BRECKENRIDGE (stylized)

 

966,580

 

8/21/1973

BRECKENRIDGE

 

3,022,152

 

11/29/2005

BRECKENRIDGE
(Canada)

 

TMA230293

 

9/15/1978; Assigned to Saks 10/16/2003. Assigned to CPS II, Inc.

CARSON PIRIE SCOTT

 

1,143,734

 

12/16/1980

CARSONS

 

1,395,289

 

5/27/1986

 

--------------------------------------------------------------------------------

 

Trademark Name

 

Registration/Serial
Number

 

Registration Date/Filing
Date

CELEBRATIONS REGISTRY FOR VERY SPECIAL OCCASIONS (WORD AND DESIGN)

 

3,628,605

 

5/26/2009

CELEBRATIONS REGISTRY FOR VERY SPECIAL OCCASIONS

 

3,632,950

 

6/2/2009

CEZANI

 

1,869,666

 

12/27/1994

CHANTEUSE

 

3,069,447

 

3/14/2006

CHARGE AGAINST BREAST CANCER

 

2,412,363

 

12/12/2000

COME TO THE RIGHT PLACE

 

2,021,357

 

12/3/1996

CONSENSUS

 

2,363,348

 

6/27/2000

DOGS HEAD CIRCLE (DESIGN)

 

4,143,662

 

12/9/2010

HERBERGER’S

 

2,278,878

 

9/21/1999

INTIMATE ESSENTIALS

 

3,483,180

 

8/12/2008

JB (WORD AND DOGS HEAD CIRCLE DESIGN )

 

4,143,891

 

5/15/2012

KENNETH ROBERTS

 

3,881,265

 

11/23/2010

KENNETH ROBERTS

 

4,139,987

 

5/8/2012

KENNETH ROBERTS PLATINUM

 

3,436,925

 

5/27/2008

LITTLE MISS ATTITUDE

 

3,709,384

 

11/10/2009

LIVING QUARTERS

 

2,385,966

 

9/12/2000

LIVING QUARTERS

 

2,493,154

 

9/25/2001

LIVING QUARTERS

 

3,909,131

 

1/18/2011

LIVING QUARTERS (Canada)

 

Reg. TMA688504

 

5/29/2007

MISS ATTITUDE

 

3,848,434

 

9/14/2010

MISS ATTITUDE

 

2,934,000

 

3/15/2005

PARADISE COLLECTION

 

3,292,860

 

9/18/2007

PARADISE COLLECTION

 

4,361,044

 

7/2/2013

PARADISE COLLECTION (NEW PALM TREE DESIGN)

 

4,532,638

 

5/20/2014

RELATIVITY

 

2,384,258

 

9/5/2000

(RELATIVITY)

 

2,635,572

 

10/15/2002

STUDIO WORKS

 

2,407,600

 

11/28/2000

STUDIO WORKS

 

3,570,064

 

2/3/2009

TECH TREK

 

3,127,728

 

8/8/2006

YOUNKERS (Stylized)

 

1,795,407

 

9/28/1993

 

--------------------------------------------------------------------------------

 

Copyrights

 

Owner:  The Bon-Ton Department Stores, Inc.

 

Copyright

 

Copyright No.

 

Registration Date

Doing a good business: 100 years at the Bon-Ton

 

TX4880277

 

10/28/98

 

Owner:  The Bon-Ton Department Stores, Inc. (registered in the name of 
“Elder-Beerman Stores Corporation” which merged into The Bon-Ton Department
Stores, Inc.)

 

Copyright

 

Copyright No.

 

Registration Date

Elder-Beerman Stores Corporation: A Tradition of Success.

 

TX 1896055

 

7/1/86

 

Owner:  Carson Pirie Scott II, Inc. (registered in the name of McRae’s, Inc.,
which merged into Carson Pirie Scott II, Inc.)

 

Copyright

 

Copyright No.

 

Registration Date

A Tale from Flurryville: The Berg’s Big Surprise/written and illustrated by Todd
Lamerton

 

TX5900922

 

1/13/04

Wow! What a Cow: A Tale from Funky Farm/written and illustrated by Todd Lamerton

 

TX5744198

 

4/29/03

A Tale from Flurryville: Arctic Bart Finds His Happy Heart/written and
illustrated by Todd Lamerton

 

TX5638101

 

11/19/02

Holiday celebrations with recipes from Younkers

 

TX5658257

 

12/27/02

 

Owner:  The Bon-Ton Stores, Inc.

 

Copyright

 

Copyright No.

 

Registration Date

Baxter shares his bear

 

TX6497902

 

1/9/07

 

--------------------------------------------------------------------------------

 

Owner:  The Bon-Ton Department Stores, Inc. (registered in the name of Carson
Pirie Scott, Inc., which merged into The Bon-Ton Department Stores, Inc.)

 

Copyright

 

Copyright No.

 

Registration Date

Parisian celebrating a century of service
(originally registered in the name of Parisian, Inc.)

 

TX2217381

 

1/21/88

Presentation—a manual of standards and guidelines
(originally registered in the name of Parisian, Inc.)

 

TX3196448

 

11/21/91

Riverchase Galleria, a Parisian Grand Opening
(originally registered in the name of Giancarlo Imiglia)

 

VA239074

 

9/5/86

Made in Wisconsin
(originally registered in the name of Boston Store)

 

VA81949

 

2/23/81

Cratchits’ Christmas dinner*
(originally registered in the name of Joanna Strauss)

 

VA00006480

 

6/8/78

 

--------------------------------------------------------------------------------

*This copyright listed “Carson Pirie Scott” instead of “Carson Pirie
Scott, Inc.”

 

--------------------------------------------------------------------------------

 

Schedule 9.1.22

 

Labor Contracts

 

Collective Bargaining Agreements:

 

1.              Agreement, dated as of May 1, 2005, by and between Carson Pirie
Scott d/b/a Boston Store and Local 86 UNITE HERE (Union of
Needletrades, Industry, Textiles Employees).

 

2.              Agreement, dated as of May 1, 2004, by and between Carson Pirie
Scott & Co. and Local 134 of the International Brotherhood of Electrical
Workers, AFL-CIO.

 

3.              Agreement, dated as of June 8, 2003, by and between Local Union
No. 147, affiliated with the International Brotherhood of Teamsters, and Saks
Incorporated.

 

4.              Terms of Agreement, ratified by union members on October 3,
2005, by and between Carson Pirie Scott & Co., and International Union of
Operating Engineers, Local Union No. 399, affiliated with the AFL-CIO.

 

5.              Agreement, dated May 1, 2004, by and between Saks Incorporated
and the Heartland Regional Counsel of Carpenters, Local Union No. 106, United
Brotherhood of Carpenters & Joiners of America.

 

6.              Agreement, dated January 1, 2002, between Saks Incorporated and
Des Moines, Iowa Local Union #347 of the International Brotherhood of Electrical
Workers, affiliates of the AFL-CIO, CLC.

 

7.              Agreement, dated May 1, 1998, by and between Painters Local
Union No. 246, affiliated with the Brotherhood of Painters and Allied Trades and
Younkers.

 

8.              Milwaukee Inside Wiremen Agreement, effective June 1, 1994, by
and between the Electrical Contractors Association Milwaukee Chapter,
N.E.C.A., Inc. and Local Union 494, I.B.E.W.

 

9.              Agreement, dated as of June 1, 1984, between Milwaukee Boston
Store Company and Electrical Workers Local Union 494, I.B.E.W., AFL-CIO, of
Milwaukee, Wisconsin.

 

Note:  The Agreements listed above have no active members and have lapsed, but
have not been formally terminated.

 

--------------------------------------------------------------------------------

 

Consulting Agreements

 

The Bon-Ton Stores, Inc. and/or The Bon-Ton Department Stores, Inc. has entered
into the following consulting agreements:

 

1.              Letter Agreement with Henry Doneger Associates, Inc.

 

2.              Letter Agreement with Directives West Consultants to Retail (now
a division of Henry Donegar Associates, Inc.).

 

3.              Letter Agreement with Mercer Health & Benefits, LLC.

 

4.              Letter Agreement with Kurt Salmon Associates, Inc.

 

5.              Letter Agreement with Towers Watson Delaware, Inc.

 

6.              Consulting Agreement with HRC Advisory, LLC

 

7.              Letter Agreement with Meridian Compensation Partners, LLC

 

--------------------------------------------------------------------------------

 

Annex C

 

[Please See Attached]

 

--------------------------------------------------------------------------------

 

Exhibit B

 

Tranche A-1 Revolver Note

 

EXHIBIT B

to

Second Amended and Restated Loan and Security Agreement

 

TRANCHE A-1 REVOLVER NOTE

 

  [             ] 20  

$                   

New York, New York

 

THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania corporation (“Bon-Ton”),
CARSON PIRIE SCOTT II, INC., a Florida corporation (“CPS II”), BON-TON
DISTRIBUTION, LLC, an Illinois limited liability company (“Distribution”),
MCRIL, LLC, a Virginia limited liability company (“McRIL”), BONSTORES REALTY
ONE, LLC, a Delaware limited liability company (“BR1LLC”), BONSTORES REALTY TWO,
LLC, a Delaware limited liability company (“BR2LLC” and, together with Bon-Ton,
CPS II, Distribution, McRIL, BR1LLC and any other person from time to time a
borrower under the Loan Agreement (as hereinafter defined), collectively, the
“Borrowers”), for value received, hereby unconditionally promise to pay, on a
joint and several basis, to the order of                             
(“Lender”), in Dollars and immediately available funds and otherwise in
accordance with the provisions of the Loan Agreement, the principal amount of
the Tranche A-1 Revolver Loans made by the Lender, together with interest on the
unpaid principal amount of such Tranche A-1 Revolver Loans from the date of such
Tranche A-1 Revolver Loans until such principal amount is paid in full, at such
interest rates and at such times as provided in the Loan Agreement.  Terms are
used herein as defined in the Second Amended and Restated Loan and Security
Agreement dated as of March 21, 2011, as such agreement may be amended,
modified, renewed or extended from time to time (the “Loan Agreement”), among
the Borrowers, each of the other Obligors party thereto, the financial
institutions party thereto from time to time as lenders (collectively,
“Lenders”), BANK OF AMERICA, N.A., a national banking association, as agent for
the Lenders (“Agent”) and the other agents and arrangers from time to time party
thereto.  Capitalized terms not otherwise defined herein shall have the same
respective meanings given to such terms in the Loan Agreement.

 

Principal of and interest on this Tranche A-1 Revolver Note from time to time
outstanding shall be due and payable in such amounts and on such dates as
provided in the Loan Agreement.  This Tranche A-1 Revolver Note is issued
pursuant to and evidences Tranche A-1 Revolver Loans under the Loan Agreement,
to which reference is made for a statement of the rights and obligations of
Lender and the duties and obligations of Borrowers.  The Loan Agreement contains
provisions for acceleration of the maturity of this Tranche A-1 Revolver Note
upon the happening of certain stated events.

 

The holder of this Tranche A-1 Revolver Note is hereby authorized by Borrowers
to record on a schedule annexed to this Tranche A-1 Revolver Note (or on a
supplemental schedule) the

 

--------------------------------------------------------------------------------

 

amounts owing with respect to Tranche A-1 Revolver Loans and the payment
thereof.  Failure to make any notation, however, shall not affect the rights of
the holder of this Tranche A-1 Revolver Note or any obligations of Borrowers
hereunder or under any other Loan Documents.

 

Time is of the essence of this Tranche A-1 Revolver Note.  Each Borrower and all
endorsers, sureties and guarantors of this Tranche A-1 Revolver Note hereby
severally waive demand, presentment for payment, protest, notice of protest,
notice of intention to accelerate the maturity of this Tranche A-1 Revolver
Note, diligence in collecting, the bringing of any suit against any party, and
any notice of or defense on account of any extensions, renewals, partial
payments, or changes in any manner of or in this Tranche A-1 Revolver Note or in
any of its terms, provisions and covenants, or any releases or substitutions of
any security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.

 

In no event whatsoever shall the amount paid or agreed to be paid to the holder
of this Tranche A-1 Revolver Note for the use, forbearance or detention of money
advanced hereunder exceed the highest lawful rate permitted under Applicable
Law.  If any such excess amount is inadvertently paid by Borrowers or
inadvertently received by the holder of this Tranche A-1 Revolver Note, such
excess shall be returned to Borrowers or credited as a payment of principal, in
accordance with the Loan Agreement.  It is the intent hereof that Borrowers not
pay or contract to pay, and that holder of this Tranche A-1 Revolver Note not
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by Borrowers under Applicable Law.

 

This Tranche A-1 Revolver Note was issued with original issue discount.  The
Lender may obtain the information described in Treasury Regulations
Section 1.1275-3(b)(1)(i) by writing to:

 

The Bon-Ton Department Stores, Inc.

2801 East Market Street, Building E

Attention: Chief Financial Officer

 

This Tranche A-1 Revolver Note shall be governed by the laws of the State of New
York, including, without limitation, New York General Obligations Law Sections
5-1401 and 5-1402 (but giving effect to federal laws relating to national
banks).

 

[Remainder of this page intentionally left blank.]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Tranche A-1 Revolver Note is executed as of the date
set forth above.

 

 

THE BON-TON DEPARTMENT STORES, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

CARSON PIRIE SCOTT II, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

BON-TON DISTRIBUTION, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

MCRIL, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

BONSTORES REALTY ONE, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

BONSTORES REALTY TWO, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

 

Amount of
Loan Made

 

Amount of
Principal or
Interest
Paid This
Date

 

Outstanding
Principal
Balance
This Date

 

Notation
Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Exhibit C

 

Assignment and Assumption Agreement

 

EXHIBIT C
to
Second Amended and Restated Loan and Security Agreement

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below (the “Effective Date”) and is entered into by
and between [the][each](1) Assignor identified in item 1 below ([the][each, an]
“Assignor”) and [the][each](2) Assignee identified in item 2 below ([the][each,
an] “Assignee”).  [It is understood and agreed that the rights and obligations
of [the Assignors][the Assignees](3) hereunder are several and not joint.](4) 
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Loan Agreement identified below (the “Loan Agreement”),
receipt of a copy of which is hereby acknowledged by [the][each] Assignee.  The
Standard Terms and Conditions for Assignment and Assumption set forth in Annex 1
attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

 

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Loan Agreement, as of the Effective Date (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Loan Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below (including, without limitation,
the Letters of Credit and the Swingline Loans included in such facilities) and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of [the Assignor (in its capacity as
a Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Loan Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned by [the][any]
Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being
referred to herein collectively as [the][an] “Assigned Interest”).  Each such
sale and assignment is without recourse to [the][any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the][any] Assignor.

 

--------------------------------------------------------------------------------

(1)  For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language.  If the assignment is from multiple Assignors, choose the
second bracketed language.

 

(2)  For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language.  If the assignment is to multiple Assignees, choose the
second bracketed language.

 

(3)  Select as appropriate.

 

(4)  Include bracketed language if there are either multiple Assignors or
multiple Assignees.

 

--------------------------------------------------------------------------------

 

1.                                      Assignor[s]:

 

2.                                      Assignee[s]:

 

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

3.                                      Borrower(s): The Bon-Ton Department
Stores, Inc., Carson Pirie Scott II, Inc., Bon-Ton Distribution, LLC, McRIL,
LLC, Bonstores Realty One, LLC, Bonstores Realty Two, LLC and any other person
from time to time a borrower under the Loan Agreement

 

4.                                      Agent: Bank of America, N.A., as the
Agent under the Loan Agreement

 

5.                                      Loan Agreement: Second Amended and
Restated Loan and Security Agreement, dated as of March 21, 2011, as amended,
among the Borrowers, the other Obligors party thereto, the Lenders from time to
time party thereto, and Bank of America, N.A., as the Agent and the other
parties thereto

 

6.                                      Assigned Interest[s]:

 

Assignor[s](5)

 

Assignee[s](6)

 

Facility
Assigned(7)

 

Aggregate
Amount of
Commitment/Loans
for all Lenders(8)

 

Amount of
Commitment/Loans
Assigned

 

Percentage
Assigned of
Commitment/
Loans(9)

 

CUSIP
Number

 

 

 

 

 

 

 

$

                

 

$

                     

 

%

 

 

 

 

 

 

 

 

 

$

                

 

$

                     

 

%

 

 

 

 

 

 

 

 

 

$

                

 

$

                     

 

%

 

 

 

 

[7.                                  Trade Date:                              
                  ](10)

 

Effective Date:                   , 20   [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

--------------------------------------------------------------------------------

(5)  List each Assignor, as appropriate.

 

(6)  List each Assignee, as appropriate.

 

(7)  Fill in the appropriate terminology for the types of facilities under the
Loan Agreement that are being assigned under this Assignment (e.g. “Tranche A
Revolver Commitment”, “Tranche A-1 Revolver Commitment”, etc.).

 

(8)  Amounts in this column and in the column immediately to the right to be
adjusted by the counterparties to take into account any payments or prepayments
made between the Trade Date and the Effective Date.

 

(9)  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

 

(10)  To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

--------------------------------------------------------------------------------

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

Name:

 

Title:

  [Consented to and](11) Accepted:

 

 

 

BANK OF AMERICA, N.A.,

 

as Agent

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

 

[Consented to:](12)

 

 

 

By:

 

 

 

Name:

 

Title:

 

 

--------------------------------------------------------------------------------

(11)  To be added only if the consent of the Agent is required by the terms of
the Loan Agreement.

 

(12)  To be added only if the consent of the Borrower Agent and/or other parties
(e.g., Swingline Lender, Issuing Bank) is required by the terms of the Loan
Agreement.

 

--------------------------------------------------------------------------------

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.                          Representations and Warranties.

 

1.1.                Assignor.  [The][Each] Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned
Interest, (ii) [the][such] Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby; and
(b) assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Loan Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrowers, any of their
respective Subsidiaries or Affiliates or any other Person obligated in respect
of any Loan Document or (iv) the performance or observance by the Borrowers, any
of their respective Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

 

1.2.                Assignee.  [The][Each] Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Loan
Agreement, (ii) it meets all the requirements to be an Eligible Assignee under
the Loan Agreement (subject to such consents, if any, as may be required under
the Loan Agreement), (iii) from and after the Effective Date, it shall be bound
by the provisions of the Loan Agreement as a Lender thereunder and, to the
extent of [the][the relevant] Assigned Interest, shall have the obligations of a
Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by [the][such] Assigned Interest and either it,
or the Person exercising discretion in making its decision to acquire
[the][such] Assigned Interest, is experienced in acquiring assets of such type,
(v) it has received a copy of the Loan Agreement, and has received or has been
accorded the opportunity to receive copies of the most recent financial
statements delivered pursuant to Section 10.1.2 thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase [the][such] Assigned Interest, (vi) it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase
[the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached
hereto is any documentation required to be delivered by it pursuant to the terms
of the Loan Agreement, duly completed and executed by [the][such] Assignee; and
(b) agrees that (i) it will, independently and without reliance upon the Agent,
[the][any] Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.

 

2.                          Payments.  From and after the Effective Date, the
Agent shall make all payments in respect of [the][each] Assigned Interest
(including payments of principal, interest, fees and other amounts) to [the][the
relevant] Assignor for amounts which have accrued to but excluding the Effective
Date and to [the][the relevant] Assignee for amounts which have accrued from and
after the Effective Date.

 

3.                          General Provisions.  This Assignment and Assumption
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy or

 

--------------------------------------------------------------------------------

 

electronic (including .pdf) transmission shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.

 

--------------------------------------------------------------------------------

 

Exhibit I

 

U.S. Tax Compliance Certificates

 

EXHIBIT I-1

 

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to that certain Second Amended and Restated Loan
Agreement dated as of March 21, 2011 (as amended, amended and restated,
restated, supplemented or otherwise modified and in effect from time to time,
the “Loan Agreement”), by and among The Bon-Ton Department Stores, Inc., a
Pennsylvania corporation (“Bon-Ton”), Carson Pirie Scott II, Inc., a Florida
corporation (“CPS II”), Bon-Ton Distribution, LLC, an Illinois limited liability
company (“Distribution”) and McRIL, LLC, a Virginia limited liability company
(“McRIL”), Bonstores Realty One, LLC, a Delaware limited liability company
(“BR1LLC”), Bonstores Realty Two, LLC, a Delaware limited liability company
(“BR2LLC”) and, together with Bon-Ton, CPS II, Distribution, McRIL, BR1LLC,
BR2LLC and any other person from time to time a borrower thereunder,
collectively, the “Borrowers”), each of the other Obligors party thereto, the
financial institutions party thereto from time to time as lenders (collectively,
“Lenders”), Bank of America, N.A., as agent for the Lenders (in such capacity,
the “Agent”) and the other agents and arrangers from time to time party thereto.

 

Pursuant to the provisions of Section 5.8.5 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the IRC, (iii) it is not a ten percent shareholder of
any Borrower within the meaning of Section 871(h)(3)(B) of the IRC and (iv) it
is not a controlled foreign corporation related to any Borrower as described in
Section 881(c)(3)(C) of the IRC.

 

The undersigned has furnished the Agent and the Borrower Agent with a
certificate of its non-U.S. Person status on IRS Form W-8BENE (or W-8BEN, as
applicable).  By executing this certificate, the undersigned agrees that (1) if
the information provided on this certificate changes, the undersigned shall
promptly so inform the Borrower Agent and the Agent, and (2) the undersigned
shall have at all times furnished the Borrower Agent and the Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

[NAME OF LENDER]

 

 

 

By:

 

 

Name:

 

Title:

 

Date:            , 20[  ]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT I-2

 

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to that certain Second Amended and Restated Loan
Agreement dated as of March 21, 2011 (as amended, amended and restated,
restated, supplemented or otherwise modified and in effect from time to time,
the “Loan Agreement”), by and among The Bon-Ton Department Stores, Inc., a
Pennsylvania corporation (“Bon-Ton”), Carson Pirie Scott II, Inc., a Florida
corporation (“CPS II”), Bon-Ton Distribution, LLC, an Illinois limited liability
company (“Distribution”) and McRIL, LLC, a Virginia limited liability company
(“McRIL”), Bonstores Realty One, LLC, a Delaware limited liability company
(“BR1LLC”), Bonstores Realty Two, LLC, a Delaware limited liability company
(“BR2LLC”) and, together with Bon-Ton, CPS II, Distribution, McRIL, BR1LLC,
BR2LLC and any other person from time to time a borrower thereunder,
collectively, the “Borrowers”), each of the other Obligors party thereto, the
financial institutions party thereto from time to time as lenders (collectively,
“Lenders”), Bank of America, N.A., as agent for the Lenders (in such capacity,
the “Agent”) and the other agents and arrangers from time to time party thereto.

 

Pursuant to the provisions of Section 5.8.5 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the IRC,
(iii) it is not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the IRC, and (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
IRC.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BENE (or W-8BEN, as applicable).  By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender in writing, and (2) the undersigned shall have at all times
furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

[NAME OF PARTICIPANT]

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Date:            , 20[  ]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT I-3

 

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to that certain Second Amended and Restated Loan
Agreement dated as of March 21, 2011 (as amended, amended and restated,
restated, supplemented or otherwise modified and in effect from time to time,
the “Loan Agreement”), by and among The Bon-Ton Department Stores, Inc., a
Pennsylvania corporation (“Bon-Ton”), Carson Pirie Scott II, Inc., a Florida
corporation (“CPS II”), Bon-Ton Distribution, LLC, an Illinois limited liability
company (“Distribution”) and McRIL, LLC, a Virginia limited liability company
(“McRIL”), Bonstores Realty One, LLC, a Delaware limited liability company
(“BR1LLC”), Bonstores Realty Two, LLC, a Delaware limited liability company
(“BR2LLC”) and, together with Bon-Ton, CPS II, Distribution, McRIL, BR1LLC,
BR2LLC and any other person from time to time a borrower thereunder,
collectively, the “Borrowers”), each of the other Obligors party thereto, the
financial institutions party thereto from time to time as lenders (collectively,
“Lenders”), Bank of America, N.A., as agent for the Lenders (in such capacity,
the “Agent”) and the other agents and arrangers from time to time party thereto.

 

Pursuant to the provisions of Section 5.8.5 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the IRC, (iv) none of its
direct or indirect partners/members is a ten percent shareholder of any Borrower
within the meaning of Section 871(h)(3)(B) of the IRC and (v) none of its direct
or indirect partners/members is a controlled foreign corporation related to any
Borrower as described in Section 881(c)(3)(C) of the IRC.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BENE (or
W-8BEN, as applicable) or (ii) an IRS Form W-8IMY accompanied by an IRS
Form W-8BENE (or W-8BEN, as applicable) from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption.  By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

[NAME OF PARTICIPANT]

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Date:            , 20[  ]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT I-4

 

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to that certain Second Amended and Restated Loan
Agreement dated as of March 21, 2011 (as amended, amended and restated,
restated, supplemented or otherwise modified and in effect from time to time,
the “Loan Agreement”), by and among The Bon-Ton Department Stores, Inc., a
Pennsylvania corporation (“Bon-Ton”), Carson Pirie Scott II, Inc., a Florida
corporation (“CPS II”), Bon-Ton Distribution, LLC, an Illinois limited liability
company (“Distribution”) and McRIL, LLC, a Virginia limited liability company
(“McRIL”), Bonstores Realty One, LLC, a Delaware limited liability company
(“BR1LLC”), Bonstores Realty Two, LLC, a Delaware limited liability company
(“BR2LLC”) and, together with Bon-Ton, CPS II, Distribution, McRIL, BR1LLC,
BR2LLC and any other person from time to time a borrower thereunder,
collectively, the “Borrowers”), each of the other Obligors party thereto, the
financial institutions party thereto from time to time as lenders (collectively,
“Lenders”), Bank of America, N.A., as agent for the Lenders (in such capacity,
the “Agent”) and the other agents and arrangers from time to time party thereto.

 

Pursuant to the provisions of Section 5.8.5 of the Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (ii) its direct or indirect partners/members are
the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing
such Loan(s)), (iii) with respect to the extension of credit pursuant to this
Loan Agreement or any other Loan Document, neither the undersigned nor any of
its direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the IRC, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of any Borrower within
the meaning of Section 871(h)(3)(B) of the IRC and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to any
Borrower as described in Section 881(c)(3)(C) of the IRC.

 

The undersigned has furnished the Agent and the Borrower Agent with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BENE (or W-8BEN, as applicable) or (ii) an IRS Form W-8IMY accompanied
by an IRS Form W-8BENE (or W-8BEN, as applicable) from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption.  By executing this certificate, the undersigned agrees that (1) if
the information provided on this certificate changes, the undersigned shall
promptly so inform the Borrower Agent and the Agent, and (2) the undersigned
shall have at all times furnished the Borrower Agent and the Agent with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

[NAME OF LENDER]

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Date:            , 20[  ]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Published Deal CUSIP:  09776RAA1

Published Tranche A CUSIP:  09776RAB9

Published Tranche A-1 CUSIP:  09776RAC7

 

 

THE BON-TON DEPARTMENT STORES, INC.,
THE ELDER-BEERMAN STORES CORP.,
CARSON PIRIE SCOTT II, INC.,
BON-TON DISTRIBUTION, INC.,
and
LLC,

MCRIL, LLC,

BONSTORES REALTY ONE, LLC

and

BONSTORES REALTY TWO, LLC,

as Borrowers,

 

and

 

the other Obligors party hereto,

 

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Dated as of March 21, 20112011,

as amended October 25, 2012,

as further amended December 12, 2013,

as further amended January 15, 2016 and

as further amended August 15, 2016

 

$625,000,000880,000,000

 

--------------------------------------------------------------------------------

 

CERTAIN FINANCIAL INSTITUTIONS,
as Lenders

 

and

 

BANK OF AMERICA, N.A.,
as Agent

 

--------------------------------------------------------------------------------

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

 

GE CAPITAL MARKETS, INC.,

and

 

WELLS FARGO CAPITAL FINANCE, LLCBANK, NATIONAL ASSOCIATION,
as Joint Lead Arrangers and Joint Book Runners,

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

and

 

--------------------------------------------------------------------------------

 

WELLS FARGO CAPITAL FINANCE, LLCBANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,Agent

 

--------------------------------------------------------------------------------

 

BANK OF AMERICA, N.A. and GENERAL ELECTRIC CAPITAL CORPORATIONWELLS FARGO BANK,
NATIONAL ASSOCIATION,

 

--------------------------------------------------------------------------------

 

as Co-Collateral Agents

 

--------------------------------------------------------------------------------

 

CITIZENS BANK OF PENNSYLVANIA and U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agents for the Tranche A Facility

 

--------------------------------------------------------------------------------

 

CRYSTAL FINANCIAL LLC,
as Documentation Agent for the Tranche A-1 Facility

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

SECTION 1.

        DEFINITIONS; RULES OF CONSTRUCTION

1

 

 

 

1.1.

Definitions

1

 

 

 

1.2.

Accounting Terms

4446

 

 

 

1.3.

Certain Matters of Construction

4446

 

 

 

1.4.

Letter of Credit Amounts

4547

 

 

 

1.5.

Certifications

4547

 

 

 

1.6.

Times of Day 45; Rates

47

 

 

 

1.7.

Borrowing Notices (CashPro)

4547

 

 

 

SECTION 2.

        CREDIT FACILITIES

4548

 

 

 

2.1.

Commitment

4548

 

 

 

 

2.1.1.

Loans

4648

 

 

 

 

 

2.1.2.

Evidence of Debt; Notes

4648

 

 

 

 

 

2.1.3.

Use of Proceeds

4648

 

 

 

 

 

2.1.4.

Overadvances

4648

 

 

 

 

 

2.1.5.

Protective Advances

4749

 

 

 

2.2.

Voluntary Reduction or Termination ofor Reduction of Tranche A Revolver
Commitments

4749

 

 

 

 

2.2.1.

Voluntary Reduction or Termination of Tranche A Revolver Commitments

4749

 

 

 

 

 

2.2.2.

Voluntary Reduction or Termination of Tranche A-1 Revolver Commitments

4849

 

 

 

2.3.

Letter of Credit Facility

4850

 

 

 

 

2.3.1.

Issuance of Letters of Credit

4850

 

 

 

 

 

2.3.2.

Reimbursement; Participations

5152

 

 

 

 

 

2.3.3.

Cash Collateral

5253

 

 

 

 

 

2.3.4.

Role of Issuing Bank

5354

 

 

 

 

 

2.3.5.

Applicability of ISP 53 and UCP; Limitation of Liability

54

 

 

 

2.4.

Increase in Tranche A Revolver Commitments

5355

 

 

 

 

2.4.1.

Request for Increase, Etc

5355

 

 

 

 

 

2.4.2.

Conditions to Effectiveness of Increase

5455

 

 

 

SECTION 3.

        INTEREST, FEES AND CHARGES

5455

 

 

 

3.1.

Interest

5455

 

 

 

 

3.1.1.

Rates and Payment of Interest

5455

 

i

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

3.1.2.

Application of Adjusted LIBOR to Outstanding Loans

5556

 

 

 

 

 

3.1.3.

Interest Periods

5557

 

 

 

 

 

3.1.4.

Interest Rate Not Ascertainable

5657

 

 

 

3.2.

Fees

5658

 

 

 

 

3.2.1.

Unused Line Fee

5658

 

 

 

 

 

3.2.2.

LC Facility Fees

5658

 

 

 

 

 

3.2.3.

Agent Fees

5758

 

 

 

 

 

3.2.4.

Tranche A-1 Prepayment Premium

58

 

 

 

3.3.

Computation of Interest, Fees, Yield Protection

5759

 

 

 

3.4.

Reimbursement Obligations

5759

 

 

 

3.5.

Illegality

5760

 

 

 

3.6.

Increased Costs

5860

 

 

 

3.7.

Capital Adequacy

5962

 

 

 

3.8.

Mitigation

5962

 

 

 

3.9.

Funding Losses

5962

 

 

 

3.10.

Maximum Interest

6062

 

 

 

SECTION 4.

        LOAN ADMINISTRATION

6063

 

 

 

4.1.

Manner of Borrowing and Funding Loans

6063

 

 

 

 

4.1.1.

Notice of Borrowing

6063

 

 

 

 

 

4.1.2.

Fundings by Lenders

6163

 

 

 

 

 

4.1.3.

Swingline Loans; Settlement

6164

 

 

 

 

 

4.1.4.

Notices

6264

 

 

 

4.2.

Defaulting Lender

6264

 

 

 

4.3.

Number and Minimum Amount of LIBOR Loans; Determination of Rate

6365

 

 

 

4.4.

Borrower Agent

6365

 

 

 

4.5.

One Obligation 63Reserved

66

 

 

 

4.6.

Effect of Termination

6366

 

 

 

SECTION 5.

        PAYMENTS

6466

 

 

 

5.1.

General Payment Provisions

6466

 

 

 

5.2.

Repayment of Loans

6467

 

 

 

 

5.2.1.

Certain Other Voluntary Prepayments of Loans

67

 

ii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

5.2.2.

Mandatory RepaymentsPrepayments of the Loans and Reduction of Commitments       
64

67

 

 

 

5.3.

Payment of Other Obligations

6568

 

 

 

5.4.

Marshaling; Payments Set Aside

6568

 

 

 

5.5.

Allocation of Payments 65Application of Proceeds

68

 

 

 

 

5.5.1.

Pre-Default Allocation of Payments 65Proceeds

68

 

 

 

 

 

5.5.2.

Post-Default Allocation of Payments 66Proceeds

69

 

 

 

 

 

5.5.3.

Erroneous Application

6771

 

 

 

5.6.

Application of Payments 67Dominion Account Proceeds

71

 

 

 

5.7.

Loan Account; Account Stated

6771

 

 

 

 

5.7.1.

Loan Account

6771

 

 

 

 

 

5.7.2.

Entries Binding

6871

 

 

 

5.8.

Taxes

6871

 

 

 

 

5.8.1.

Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes

71

 

 

 

 

 

5.8.2.

Payment of Other Taxes by the Borrowers

72

 

 

 

 

 

5.8.3.

Tax Indemnifications

72

 

 

 

 

 

5.8.4.

Evidence of Payments

73

 

 

 

 

 

5.8.5.

Status of Lenders; Tax Documentation

73

 

 

 

 

 

5.8.6.

Treatment of Certain Refunds

74

 

 

 

 

 

5.8.7.

Survival

75

 

 

 

5.9.

Withholding Tax Exemption 68[Reserved]

75

 

 

 

5.10.

Nature and Extent of Each Borrower’s Liability

6975

 

 

 

 

5.10.1.

Joint and Several Liability

6975

 

 

 

 

 

5.10.2.

Waivers

7076

 

 

 

 

 

5.10.3.

Extent of Liability; Contribution

7076

 

 

 

 

 

5.10.4.

Joint Enterprise

7177

 

 

 

 

 

5.10.5.

Subordination

7177

 

iii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

SECTION 6.

        CONDITIONS PRECEDENT

7177

 

 

 

6.1.

Conditions Precedent to Initial Loans

7177

 

 

 

6.2.

Conditions Precedent to All Credit Extensions

7480

 

 

 

6.3.

Limited Waiver of Conditions Precedent

7480

 

 

 

SECTION 7.

        COLLATERAL

7480

 

 

 

7.1.

Grant of Security Interest

7480

 

 

 

7.2.

Lien on Deposit Accounts; Cash Collateral

7581

 

 

 

 

7.2.1.

Deposit Accounts

7581

 

 

 

 

 

7.2.2.

Cash Collateral

7682

 

 

 

7.3.

Real Estate Collateral

7682

 

 

 

7.4.

Other Collateral

7783

 

 

 

 

7.4.1.

Commercial Tort Claims

7783

 

 

 

 

 

7.4.2.

Certain After-Acquired Collateral

7783

 

 

 

7.5.

No Assumption of Liability

7783

 

 

 

7.6.

Further Assurances

7783

 

 

 

7.7.

Foreign Subsidiary Stock

7783

 

 

 

7.8.

Lien Releases

7783

 

 

 

SECTION 8.

        COLLATERAL ADMINISTRATION

7783

 

 

 

8.1.

Borrowing Base Certificates

7783

 

 

 

8.2.

Administration of Accounts and Credit Card Receivables

7884

 

 

 

 

8.2.1.

Credit Card Notifications; Records

7884

 

 

 

 

 

8.2.2.

Account Verification

7884

 

 

 

 

 

8.2.3.

Maintenance of Dominion Accounts

7884

 

 

 

 

 

8.2.4.

Proceeds of Collateral

7985

 

 

 

8.3.

Administration of Inventory

7985

 

 

 

 

8.3.1.

Records and Reports of Inventory

7985

 

 

 

 

 

8.3.2.

Returns of Inventory

7985

 

 

 

 

 

8.3.3.

Acquisition, Sale and Maintenance

7985

 

 

 

8.4.

Administration of Equipment

7985

 

 

 

 

8.4.1.

Records and Schedules of Equipment

7985

 

 

 

 

 

8.4.2.

Dispositions of Equipment

7985

 

 

 

 

 

8.4.3.

Condition of Equipment

7986

 

iv

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

8.5.

Administration of Deposit Accounts

8086

 

 

 

8.6.

General Provisions

8086

 

 

 

 

8.6.1.

Location of Collateral

8086

 

 

 

 

 

8.6.2.

Insurance of Collateral; Condemnation Proceeds

8187

 

 

 

 

 

8.6.3.

Protection of Collateral

8187

 

 

 

 

 

8.6.4.

Defense of Title to Collateral

8187

 

 

 

8.7.

Power of Attorney

8187

 

 

 

SECTION 9.

        REPRESENTATIONS AND WARRANTIES

8288

 

 

 

9.1.

General Representations and Warranties

8288

 

 

 

 

9.1.1.

Organization and Qualification

8288

 

 

 

 

 

9.1.2.

Power and Authority

8288

 

 

 

 

 

9.1.3.

Enforceability

8288

 

 

 

 

 

9.1.4.

Capital Structure

8288

 

 

 

 

 

9.1.5.

Corporate Names; Locations

8389

 

 

 

 

 

9.1.6.

Title to Properties; Priority of Liens

8389

 

 

 

 

 

9.1.7.

Security Documents

8389

 

 

 

 

 

9.1.8.

Financial Statements

8389

 

 

 

 

 

9.1.9.

Surety Obligations

8389

 

 

 

 

 

9.1.10.

Taxes

8389

 

 

 

 

 

9.1.11.

Brokers

8389

 

 

 

 

 

9.1.12.

Intellectual Property

8389

 

 

 

 

 

9.1.13.

Governmental Approvals

8490

 

 

 

 

 

9.1.14.

Compliance with Laws

8490

 

 

 

 

 

9.1.15.

Compliance with Environmental Laws

8490

 

 

 

 

 

9.1.16.

Burdensome Contracts

8490

 

 

 

 

 

9.1.17.

Litigation

8490

 

 

 

 

 

9.1.18.

Insurance

8490

 

 

 

 

 

9.1.19.

No Defaults

8591

 

 

 

 

 

9.1.20.

ERISA 85.

91

 

 

 

 

 

9.1.21.

Trade Relations

8591

 

 

 

 

 

9.1.22.

Labor Relations

8591

 

 

 

 

 

9.1.23.

Not a Regulated Entity

8591

 

v

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

9.1.24.

Margin Stock

8591

 

 

 

 

 

9.1.25.

Plan Assets

8591

 

 

 

 

 

9.1.26.

Complete Disclosure

8591

 

 

 

 

 

9.1.27.

Anti-Terrorism

8692

 

 

 

 

 

9.1.28.

Anti-Corruption Laws

8692

 

 

 

 

 

9.1.29.

EEA Financial Institution

92

 

 

 

SECTION 10.

        COVENANTS AND CONTINUING AGREEMENTS

8692

 

 

 

10.1.

Affirmative Covenants

8692

 

 

 

 

10.1.1.

Inspections; Appraisals

8692

 

 

 

 

 

10.1.2.

Financial and Other Information

8793

 

 

 

 

 

10.1.3.

Notices

8996

 

 

 

 

 

10.1.4.

Storage Agreements

9097

 

 

 

 

 

10.1.5.

Compliance with Laws; Organic Documents; Material Contracts

9097

 

 

 

 

 

10.1.6.

Taxes

9197

 

 

 

 

 

10.1.7.

Insurance

9197

 

 

 

 

 

10.1.8.

Licenses

9197

 

 

 

 

 

10.1.9.

Future Subsidiaries; Designation of Subsidiaries

9197

 

 

 

 

 

10.1.10.

Lien Waivers

9198

 

 

 

 

 

10.1.11.

Preservation of Existence

9198

 

 

 

 

 

10.1.12.

Maintenance of Properties

9298

 

 

 

 

 

10.1.13.

Books and Records

9298

 

 

 

 

 

10.1.14.

Operation and Maintenance Plan

9298

 

 

 

 

 

10.1.15.

Anti-Corruption Laws

9298

 

 

 

10.2.

Negative Covenants

9299

 

 

 

 

10.2.1.

Permitted Debt

9299

 

 

 

 

 

10.2.2.

Permitted Liens

94101

 

 

 

 

 

10.2.3.

Cash Accumulation

96103

 

 

 

 

 

10.2.4.

Distributions; Upstream Payments

96103

 

 

 

 

 

10.2.5.

Restricted Investments

96103

 

 

 

 

 

10.2.6.

Disposition of Assets

97103

 

 

 

 

 

10.2.7.

Loans

97103

 

 

 

 

 

10.2.8.

Restrictions on Payment of Certain Debt

97103

 

vi

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

 

10.2.9.

Fundamental Changes

98104

 

 

 

 

 

10.2.10.

Subsidiaries

98104

 

 

 

 

 

10.2.11.

Organic Documents

98104

 

 

 

 

 

10.2.12.

Tax Consolidation

98105

 

 

 

 

 

10.2.13.

Accounting Changes

98105

 

 

 

 

 

10.2.14.

Restrictive Agreements

98105

 

 

 

 

 

10.2.15.

Hedging Agreements

99105

 

 

 

 

 

10.2.16.

Conduct of Business

99105

 

 

 

 

 

10.2.17.

Affiliate Transactions

99105

 

 

 

 

 

10.2.18.

Plans

99105

 

 

 

 

 

10.2.19.

Amendments to Certain Material Contracts

99105

 

 

 

 

 

10.2.20.

No Speculative Transactions

99106

 

 

 

 

 

10.2.21.

Passive Company Status 99 [Reserved]

106

 

 

 

 

 

10.2.22.

General Partner

99106

 

 

 

 

 

10.2.23.

Sale-Leaseback Transactions

99106

 

 

 

 

 

10.2.24.

Debt under Senior Note Debt Documents

100106

 

 

 

 

 

10.2.25.

Use of Proceeds

100106

 

 

 

 

 

10.2.26.

No Inconsistent Agreements

100106

 

 

 

 

 

10.2.27.

Stay, Extension and Usury Laws

100106

 

 

 

 

 

10.2.28.

Sanctions

100107

 

 

 

 

 

10.2.29.

Anti-Corruption Laws

100107

 

 

 

10.3.

Financial Covenants

100107

 

 

 

 

10.3.1.

Minimum Excess Availability

100107

 

 

 

 

 

10.3.2.

Springing FCCR

107

 

 

 

SECTION 11.

        EVENTS OF DEFAULT; REMEDIES ON DEFAULT

101107

 

 

 

11.1.

Events of Default

101107

 

 

 

11.2.

Remedies upon Default

102109

 

 

 

11.3.

License

103110

 

 

 

11.4.

Setoff

103110

 

 

 

11.5.

Remedies Cumulative; No Waiver

103110

 

 

 

 

11.5.1.

Cumulative Rights

103110

 

 

 

 

 

11.5.2.

Waivers

104110

 

vii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

SECTION 12.

        AGENT

104110

 

 

 

12.1.

Appointment, Authority and Duties of Agent

104110

 

 

 

 

12.1.1.

Appointment and Authority

110

 

 

 

 

 

12.1.2.

Duties

104111

 

 

 

 

 

12.1.3.

Agent Professionals

104112

 

 

 

 

 

12.1.4.

Instructions of Required Lenders

105112

 

 

 

 

 

12.1.5.

Co-Collateral Agents

105112

 

 

 

 

 

12.1.6.

No Fiduciary Relationship

105112

 

 

 

12.2.

Agreements Regarding Collateral and Field Examination Reports

105113

 

 

 

 

12.2.1.

Lien Releases; Care of Collateral

105113

 

 

 

 

 

12.2.2.

Possession of Collateral

105113

 

 

 

 

 

12.2.3.

Reports

106113

 

 

 

12.3.

Reliance By Agent

106113

 

 

 

12.4.

Action Upon Default

106114

 

 

 

12.5.

Ratable Sharing

106114

 

 

 

12.6.

Indemnification of Agent Indemnitees

106114

 

 

 

 

12.6.1.

INDEMNIFICATION

106114

 

 

 

 

 

12.6.2.

Proceedings

107114

 

 

 

12.7.

Limitation on Responsibilities of Agent

107115

 

 

 

12.8.

Successor Agent

107115

 

 

 

 

12.8.1.

Resignation; Successor Agent

107115

 

 

 

 

 

12.8.2.

Separate Collateral Agent

108115

 

 

 

12.9.

Due Diligence and Non-Reliance

108116

 

 

 

12.10.

Replacement of Certain Lenders

108116

 

 

 

12.11.

Remittance of Payments and Collections

109117

 

 

 

 

12.11.1.

Remittances Generally

109117

 

 

 

 

 

12.11.2.

Failure to Pay

109117

 

 

 

 

 

12.11.3.

Recovery of Payments

109117

 

 

 

12.12.

Agent in its Individual Capacity

109117

 

 

 

12.13.

Agent Titles

110117

 

 

 

12.14.

No Third Party Beneficiaries

110117

 

 

 

12.15.

Junior Debt Intercreditor Agreements

110118

 

viii

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

12.16.

Mortgage Intercreditor Agreement 110Agent May File Proofs of Claim

118

 

 

 

12.17.

Post-Closing Agreement 110Bank Product Providers

118

 

 

 

SECTION 13.

        BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

110118

 

 

 

13.1.

Successors and Assigns

110118

 

 

 

13.2.

Assignments

110119

 

 

 

 

13.2.1.

Assignments by Lenders

110119

 

 

 

 

 

13.2.2.

Register

112121

 

 

 

 

 

13.2.3.

Certain Pledges

112121

 

 

 

 

 

13.2.4.

Electronic Execution of Assignments and Certain Other Documents

112121

 

 

 

 

 

13.2.5.

Assignment by MLPFS

121

 

 

 

13.3.

Participations

112121

 

 

 

 

13.3.1.

Participations

121

 

 

 

 

 

13.3.2.

Limitations upon Participant Rights

113122

 

 

 

 

13.4.

Tax Treatment

113122

 

 

 

13.5.

Representation of Lenders

113122

 

 

 

SECTION 14.

        MISCELLANEOUS

113123

 

 

 

14.1.

Consents, Amendments and Waivers

113123

 

 

 

 

14.1.1.

Amendment

113123

 

 

 

 

 

14.1.2.

Limitations

114123

 

 

 

 

 

14.1.3.

Payment for Consents

114124

 

 

 

 

 

14.1.4.

Generally

114124

 

 

 

14.2.

Indemnity

114124

 

 

 

14.3.

Notices and Communications

115125

 

 

 

 

14.3.1.

Notice Address

115125

 

 

 

 

 

14.3.2.

Electronic Communications; Voice Mail

116125

 

 

 

 

 

14.3.3.

Non-Conforming Communications

116126

 

 

 

 

 

14.3.4.

Change of Address, Etc

126

 

 

 

14.4.

Performance of Borrowers’ Obligations

116126

 

 

 

14.5.

Credit Inquiries

116126

 

 

 

14.6.

Severability

116127

 

 

 

14.7.

Cumulative Effect; Conflict of Terms

116127

 

ix

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

14.8.

Counterparts; Facsimile Signatures

117127

 

 

 

14.9.

Entire Agreement

117127

 

 

 

14.10.

Obligations of Lenders

117127

 

 

 

14.11.

Confidentiality

117127

 

 

 

14.12.

GOVERNING LAW

118128

 

 

 

14.13.

Consent to Forum

118128

 

 

 

 

14.13.1.

Forum

118

 

 

 

14.14.

Waivers by Borrowers

118128

 

 

 

14.15.

Patriot Act Notice

118128

 

 

 

14.16.

Survival of Representations and Warranties

118129

 

 

 

14.17.

No Advisory or Fiduciary Responsibility

119129

 

 

 

14.18.

Resignation as Issuing Bank or Provider of Swingline Loans after Assignment

119129

 

 

 

14.19.

Amendment and Restatement of Existing Loan Agreement

120130

 

 

 

14.20.

Keepwell

120130

 

 

 

14.21.

Acknowledgment and Consent to Bail-In of EEA Financial Institutions

130

 

 

 

14.22.

Agreement Among Tranche A Lenders and the Tranche A-1 Lenders

131

 

x

--------------------------------------------------------------------------------

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A

 

Tranche A Revolver Note

Exhibit B

 

Tranche A-1 Revolver Note

Exhibit C

 

Assignment and Assumption Agreement

Exhibit D

 

Compliance Certificate

Exhibit E

 

Credit Card Notification

Exhibit F

 

Guaranty

Exhibit G

 

Co-Collateral Agent Rights Agreement

Exhibit H

 

Joinder to Credit Agreement

Exhibit I

 

U.S. Tax Compliance Certificates

 

Schedule 1.1(a)

 

Commitments of Lenders

Schedule 1.1(b)

 

Restricted Investments Existing on the Closing Date

Schedule 1.1(c)

 

Certain Existing Bank Products

Schedule 2.3.2

 

Existing Letters of Credit

Schedule 7.1(c)

 

Commercial Tort Claims

Schedule 7.2.1

 

Secondary Operating Deposit Accounts

Schedule 7.3

 

Mortgaged Real Estate

Schedule 8.2.1

 

Existing Credit Card Arrangements

Schedule 8.5

 

Deposit Accounts

Schedule 8.5(a)

 

Excluded Deposit and Disbursement Accounts

Schedule 8.5(b)

 

Excluded Trust Accounts

Schedule 8.6.1

 

Chief Executive Offices and other Business Locations

Schedule 9.1.4

 

Names and Capital Structure

Schedule 9.1.5

 

Former Corporate Names and Trade Names

Schedule 9.1.12

 

Intellectual Property

Schedule 9.1.15

 

Environmental Matters

Schedule 9.1.16

 

Restrictive Agreements

Schedule 9.1.17

 

Litigation

Schedule 9.1.22

 

Labor Contracts

Schedule 10.2.1

 

Existing Debt

Schedule 10.2.2

 

Existing Liens

Schedule 10.2.2(c)

 

Existing Tax Liens

Schedule 10.2.17

 

Existing Affiliate Transactions

Schedule 14

 

Agreement Among Tranche A Lenders and Tranche A-1 Lenders

 

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as may be amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Loan Agreement”) is dated as of March 21, 2011, by and among THE BON-TON
DEPARTMENT STORES, INC. (“Bon-Ton”), a Pennsylvania corporation, THE
ELDER-BEERMAN STORES CORP., an Ohio corporation (“Elder-Beerman”), CARSON PIRIE
SCOTT II, INC., a MississippiFlorida corporation (“CPS II”), BON-TON
DISTRIBUTION, INC.LLC, an Illinois corporationlimited liability company
(“Distribution”) and, MCRIL, LLC, a Virginia limited liability company
(“McRIL”), THE BON-TON STORES OF LANCASTER, INC., a Pennsylvania corporation
(“LancasterBONSTORES REALTY ONE, LLC, a Delaware limited liability company
(“BR1LLC”), and BONSTORES REALTY TWO, LLC, a Delaware limited liability company
(“BR2LLC” and, together with Bon-Ton, Elder-Beerman, CPS II, Distribution,
McRIL, BR1LLC and any other person from time to time a borrower hereunder,
collectively, the “Borrowers”), each of the other Obligors party hereto, the
financial institutions party to this Loan Agreement from time to time as lenders
(collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking
association, as administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, the “Agent”), with MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED, GE CAPITAL MARKETS, INC. and WELLS
FARGO CAPITAL FINANCE, LLCBANK, NATIONAL ASSOCIATION, acting as joint lead
arrangers and joint bookrunners hereunder (in such capacity, the “Joint Lead
Arrangers”), GENERAL ELECTRIC COMPANY (as successor in interest by merger to
General Electric Capital Corporation) and WELLS FARGO CAPITAL FINANCE, LLC , as
co-WELLS FARGO BANK, NATIONAL ASSOCIATION, as syndication agentsagent (in such
capacity, the “Co-Syndication AgentsAgent”), BANK OF AMERICA, N.A., and GENERAL
ELECTRIC COMPANY (as successor in interest by merger to General Electric Capital
Corporation)WELLS FARGO BANK, NATIONAL ASSOCIATION acting as co-collateral
agents hereunder (in such capacity, together with their permitted successors and
assigns in such capacity, the “Co-Collateral Agents”), and CITIZENS BANK OF
PENNSYLVANIA and U.S. BANK NATIONAL ASSOCIATION, acting as co-documentation
agents hereunderfor the Tranche A Facility and CRYSTAL FINANCIAL LLC, acting as
documentation agent for the Tranche A-1 Facility (in such capacity, the
“Documentation Agents”).

 

R E C I T A L S:

 

Borrowers have requested that Lenders make available a credit facility, to be
used by Borrowers to finance their mutual and collective business enterprise. 
Lenders are willing to provide such credit facility on the terms and conditions
set forth in this Loan Agreement.

 

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:

 

SECTION 1.                         DEFINITIONS; RULES OF CONSTRUCTION

 

1.1.                            Definitions.  As used herein, the following
terms have the meanings set forth below:

 

Account - as defined in the UCC, including all rights to payment for goods sold
or leased, or for services rendered.

 

Account Control Agreements - each deposit account control agreement and other
bank account control agreement required pursuant to Section 7.2.1 or
Section 8.5, in each case, in form and substance reasonably satisfactory to
Agent.

 

Account Debtor - a Person who is obligated under an Account, Chattel Paper or
General Intangible.

 

--------------------------------------------------------------------------------

 

Adjusted LIBOR -— (a) for any Interest Period, with respect to LIBOR Loans, the
rate per annum rate of interest (rounded upward, if necessary, to the nearest
1/16th of 1%) equal to the British Bankers Association per annum LIBOR Rate or
the successor thereto if the British Bankers Association is no longer making a
LIBOR rate available (“LIBOR”), as published byequal to the London Interbank
Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is approved
by the Agent, as published on the applicable Reuters screen page (or such other
commercially available source providing such quotations of LIBOR as may be
designated by the Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period.  If such rate is not available at such
time for any reason, then “Adjusted LIBOR” for such Interest Period shall be;

 

(b)                                 for any interest calculation with respect to
a Base Rate Loan on any date, the rate per annum (rounded upward, if necessary,
to the nearest 1/16th of 1%) equal to the rate determined by Agent to be the
rate at which deposits in Dollars for delivery on the first day of such Interest
Period in same day funds in the approximate amount of the LIBOR Loan being made,
continued or converted by Bank of America and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major
banks in the London interbank eurodollar market at their requestequal to LIBOR
or a comparable or successor rate, which rate is approved by the Agent, as
published on the applicable Reuters screen page (or such other commercially
available source providing such quotations as may be designated by the Agent
from time to time) at approximately 11:00 a.m., (London time), two Business Days
prior to the commencement of such Interest Period).  Ifsuch date for Dollar
deposits with a term of one month commencing that day; and

 

(c)                                  if Adjusted LIBOR shall be less than zero,
such rate shall be deemed zero for purposes of this Loan Agreement;

 

provided that to the extent a comparable or successor rate is approved by the
Agent in connection herewith, the approved rate shall be applied in a manner
consistent with market practice; provided, further that to the extent such
market practice is not administratively feasible for the Agent, such approved
rate shall be applied in a manner as otherwise reasonably determined by the
Agent.  If the Board of Governors shall impose a Reserve Percentage with respect
to LIBOR deposits, then Adjusted LIBOR shall equal the amount determined above,
divided by (1 minus the Reserve Percentage).  Notwithstanding the foregoing,
Adjusted LIBOR for purposes of LIBOR Tranche A-1 Revolver Loans shall at no time
be less than one percent (1%) per annum.

 

Affiliate - with respect to any Person, another Person (a) who directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such first Person; (b) who beneficially owns 10% or
more of the voting securities or any class of Equity InterestsCapital Stock of
such first Person; (c) at least 10% of whose voting securities or any class of
Equity InterestsCapital Stock is beneficially owned, directly or indirectly, by
such first Person; or (d) who is an officer, director, partner or managing
member of such first Person.  “Control” means the possession, directly or
indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through ownership of Equity InterestsCapital
Stock, by contract or otherwise.

 

Agent — as defined in the Preamble.

 

Agent Indemnitees - Agent and its Related Parties.

 

Agent Parties - as defined in Section 10.1.2.

 

2

--------------------------------------------------------------------------------

 

Agent Professionals - attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.

 

Aggregate Borrowing Base — means, on any date of determination, collectively,
the sum of the Tranche A Borrowing Base and the Tranche A-1 Borrowing Base on
such date.

 

Allocable Amount - as defined in Section 5.10.3.

 

Amendment Closing Date - October 25, 2012.

 

Anti-Terrorism Laws - any laws relating to terrorism or money laundering,
including the Patriot Act.

 

Applicable Law - all laws, rules, regulations and governmental guidelines
applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law, common law and equitable principles, and
all provisions of constitutions, treaties, statutes, rules, regulations, orders
and decrees of Governmental Authorities.

 

Applicable Margin -— (a) with respect to any Type of Tranche A Revolver Loan,
the margin set forth below, as determined by the average daily Availability
Percentage during the Fiscal Quarter most recently then ended:

 

Level

 

Availability 
Percentage

 

LIBOR 
Tranche 
A 
Revolver 
Loans

 

LIBOR 
Tranche 
A-1 
Revolver 
Loans

 

Base 
Rate 
Tranche 
A 
Revolver 
Loans

 

Base 
Rate 
Tranche 
A-1 
Revolver 
Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

I

 

Greater than 60%

 

1.50

%

3.25

%

0.50

%

2.25

%

II

 

Less than or equal to 60% and greater than 30%

 

1.75

%

3.50

%

0.75

%

2.50

%

III

 

Less than or equal to 30%

 

2.00

%

3.75

%

1.00

%

2.75

%

 

The margins shall be subject to increase or decrease on a quarterly basis.  Not
more than ten (10) Business Days after the first day of each Fiscal Quarter,
Agent shall determine the Applicable Margin for such Fiscal Quarter (which shall
be effective as of the first Business Day of such Fiscal Quarter) based on the
average daily Availability Percentage for the prior Fiscal Quarter; provided
that notwithstanding the foregoing, (i) from and after the date that the
aggregate amount of the Tranche A Real Estate Availability Amount and the
Tranche A-1 Real Estate Amount included in the Aggregate Borrowing Base (as
reflected in the Borrowing Base Certificate delivered pursuant to Section 8.1)
exceeds $65,000,000 and until the Termination Date, the margins shall be
increased by 25 basis points per annum at each Level for each Type of Tranche A
Revolver Loan;

 

3

--------------------------------------------------------------------------------

 

and

 

(ii) the Applicable Margin shall not be less than the margins corresponding to
Level II above until March 1, 2014.b) with respect to any LIBOR Tranche A-1
Revolver Loans, 9.50% per annum; and

 

(c) with respect to any Base Rate Tranche A-1 Revolver Loans, 8.50% per annum.

 

Appraised Value - the fair market value of any Eligible Real Estate as
determined pursuant to the most recent appraisal received by Agent from an
independent third-party appraiser reasonably acceptable to Required Lenders,
pursuant to Section 10.1.1(b).

 

Approved Fund - any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

Approved Shipper - any reputable and creditworthy shipper or freight forwarder
transporting finished goods Inventory to a Borrower’s Distribution Center.

 

Asset Disposition - a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including a disposition of Property in
connection with a sale-leaseback transaction or synthetic lease; provided,
however, that in no event shall a termination of a lease be deemed to be an
Asset Disposition.

 

Assignee Group - two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

 

Assignment and Assumption Agreement - an assignment and assumption agreement
between a Lender and Eligible Assignee, substantially in the form of Exhibit C.

 

Available Basket Amount - means, on any date of determination, an amount equal
to the result of (i) the aggregate amount of cash proceeds actually received by
an Obligor from the issuance of any Equity InterestsCapital Stock (or capital
contributions in respect of Equity InterestsCapital Stock held in an Obligor)
after the Closing Date (“equity issuance proceeds”), minus (ii) such equity
issuance proceeds which have been utilized by the Obligors and their
Subsidiaries to make Investments after the Closing Date.

 

Availability Percentage —- means, on any date of determination, the quotient
(expressed as a percentage) of (a) Excess Availability divided by (b) the lesser
of (i) the aggregate Commitments and (ii) the Aggregate Borrowing Base on such
date.

 

Availability Reserve - the sum (without duplication) of (a) the Inventory
Reserve; (b) Credit Card Receivables Reserve, (c) the Rent and Charges Reserve;
(d) the Bank Product Reserve; (e) such reserves which Agent may establish from
time to time in the reasonable exercise of its credit judgment with respect to
any liabilities secured by Liens upon Collateral that are or which may become
senior to Agent’s Liens (irrespective of whether such liabilities or Liens are
permitted hereunder and provided that imposition of any such reserve shall not
waive an Event of Default arising therefrom); (f) reserves in respect of store
closures or liquidations as Agent in the reasonable exercise of its credit
judgment may elect to impose from time to time, (g) reserves in respect of such
claims against or liabilities as Agent in the reasonable exercise of its credit
judgment determines may need to be satisfied in connection with any realization
on the Collateral, (h) reserves in respect of consignment arrangements and any
proceeds arising therefrom (but limited to the amount of the associated
consignment payable) as Agent in the reasonable exercise of its credit judgment
may elect to impose from time to time, unless Agent has received a Consignment

 

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Agreement in respect of such arrangements, (i) reserves in respect of Debt in an
aggregate principal amount of $25,000,000 or more maturing within 45 days of the
date of determination as Agent in the reasonable exercise of its credit judgment
may elect to impose from time to time and (j) such additional reserves, in such
amounts and with respect to such matters (including, without limitation,
reserves which Agent may establish from time to time, in its reasonable exercise
of its credit judgment, as being appropriate to reflect impediments to Agent’s
ability to realize the full value of the Collateral in a liquidation) as Agent
in its reasonable exercise of its credit judgment may elect to impose from time
to time.

 

Bail-In Action - means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

 

Bail-In Legislation - means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

 

Bank of America - Bank of America, N.A., a national banking association, and its
successors and permitted assigns.

 

Bank of America Indemnitees - Bank of America and its officers, directors,
employees, Affiliates, agents, advisors and attorneys.

 

Bank Product - any of the following products, services or facilities extended to
Parentany Obligor or any Subsidiary by any Tranche A Lender or any of its
Affiliates: (a) Cash Management Services; (b) products under Hedging Agreements;
(c) commercial credit card and purchasing cards extended to Parentany Obligor or
suchany Subsidiary; (d) other banking products or services as may be requested
by Parentany Obligor or any Subsidiary, other than letters of credit and leases;
(e) those other bank products and services set forth on Schedule 1.1(c); and
(f) supply chain financing; provided, however, that for any of the foregoing to
be included for purposes of a distribution under Section 5.5.1(j) or
Section 5.5.2(kl) (as applicable), the applicable bank product provider and
Obligor must have provided written notice to Agent of (i) the existence of such
Bank Product, (ii) the maximum dollar amount of obligations arising thereunder
to be included as a Bank Product Reserve (““Bank Product Amount”“), and
(iii) the methodology to be used by such parties in determining the Bank Product
Debt owing from time to time (which notice, in the case of a distribution under
Section 5.5.2(kl), must have been received prior to the occurrence of the Event
of Default resulting in the application of Section 5.5.2(kl)).  The Bank Product
Amount may be changed from time to time upon written notice to Agent by the
Secured Party and Obligor.  Notwithstanding anything to the contrary contained
herein, Bank Products provided by Bank of America or any of its branches or
Affiliates shall not be subject to the requirements in the proviso of the first
sentence of this definition in order for such Bank Products to be included as an
“Obligation” for purposes of a distribution under Section 5.5.1(j) or
Section 5.5.2(kl) (as applicable).

 

Bank Product Amount - as defined in the definition of Bank Product.

 

Bank Product Debt - Debt and other obligations of an Obligor or any Subsidiary
relating to Bank Products.

 

Bank Product Reserve - the aggregate amount of reserves established by Agent in
the reasonable exercise of its credit judgment from time to time, in
consultation with the Borrower Agent, in respect of Bank Product Debt.

 

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Bankruptcy Code - Title 11 of the United States Code, as amended and in effect.

 

Base Rate - for any day, a fluctuating rate per annum equal to the highest of
(a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America as its
“prime rate,” and (c) the Adjusted LIBOR for a one-month Interest Period in
effect for such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1.00%; and if the Base Rate shall be less than
zero, such rate shall be deemed zero for purposes of this Agreement. 
Notwithstanding the foregoing, Base Rate for purposes of any interest
calculation with respect to Tranche A-1 Revolver Loans, including pursuant to
the last sentence of Section 3.1.1(a), shall at no time be less than two percent
(2%) per annum.  The “prime rate” is a rate set by Bank of America based upon
various factors including Bank of America’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such publicly
announced rate.  Any change in the Base Rate due to a change in any of the
foregoing shall take effect at the opening of business on the day specified in
the public announcement of such change.

 

Base Rate Loan - any Loan that bears interest based on the Base Rate.

 

Base Rate Tranche A Revolver Loan - a Tranche A Revolver Loan that bears
interest at the Base Rate plus the Applicable Margin for Base Rate Tranche A
Revolver Loans.

 

Base Rate Tranche A-1 Revolver Loan - a Tranche A-1 Revolver Loan that bears
interest at the Base Rate plus the Applicable Margin for Base Rate Tranche A-1
Revolver Loans.

 

Board of Directors - (a) with respect to a corporation, the board of directors
of the corporation or, except in the context of the definitions of “Change of
Control” and “Continuing Directors,” a duly authorized committee thereof;
(b) with respect to a partnership, the Board of Directors of the general partner
of the partnership or, if the partnership has more than one general partner, the
managing general partner of the partnership; and (c) with respect to any other
Person, the board or committee of such Person serving a similar function.

 

Board of Governors - the Board of Governors of the Federal Reserve System.

 

Bon-Ton - as defined in the Preamble.

 

Borrowed Money - with respect to any Obligor, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Obligor, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables owing in the Ordinary Course of
Business), or (iv) was issued or assumed as full or partial payment for
Property; (b) Capital Leases; (c) reimbursement obligations with respect to
letters of credit; and (d) guaranties of any Debt of the foregoing types owing
by another Person.

 

Borrower Account - a special account established by Borrowers, at Bank of
America or another bank reasonably acceptable to Agent, subject to a control
agreement in favor of Agent, for the benefit of the Lenders, in form and
substance reasonably satisfactory to Agent.

 

Borrower Agent - as defined in Section 4.4.

 

Borrowing - a group of Loans of one Type that are made on the same day or are
converted into Loans of one Type on the same day.

 

Borrowing Base Certificate - a certificate, in form and substance reasonably
satisfactory to

 

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Agent, by which Borrowers certify calculation of the Tranche A Borrowing Base
and, the Tranche A-1 Borrowing Base, and the Tranche A-1 Utilization Amount.

 

Business Day - any day (a) excluding Saturday, Sunday and any other day on which
banks are permitted to be closed under the laws of the State of New York and
(b) when used with reference to a LIBOR Loan, also excluding any day on which
banks do not conduct dealings in Dollar deposits on the London interbank market.

 

Capital Adequacy Regulation - any law, rule, regulation, guideline, request or
directive of any central bank or other Governmental Authority, whether or not
having the force of law, regarding capital adequacy or liquidity of a bank or
any Person controlling a bank.

 

Capital Expenditures - all liabilities incurred, expenditures made or payments
due (whether or not made) by Parent or any Subsidiary for the acquisition of any
fixed assets, or any improvements, replacements, substitutions or additions
thereto, in each case that are required to be capitalized for financial
reporting purposes in accordance with GAAP.

 

Capital Lease - any lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

 

Capital Stock - (a) in the case of a corporation, corporate stock; (b) in the
case of an association or other business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock; (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or, limited, limited
liability or joint venture); and (d) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

 

Cash Collateral - cash, and any interest or other income earned thereon, that is
delivered to Agent to Cash Collateralize any Obligations.

 

Cash Collateral Account - a demand deposit, money market or other account
established by Agent at such financial institution as Agent may select in its
discretion, which account shall be subject to Agent’s Liens for the benefit of
Secured Parties.

 

Cash Collateralize - the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 103%
of the aggregate LC Obligations, and (b) with respect to any inchoate or
contingent Obligations (including Obligations arising under Bank Products),
Agent’s good faith estimate of the amount due or to become due, including all
fees and other amounts relating to such Obligations.  “Cash Collateralized” and
“Cash Collateralization” has ashall have correlative meaningmeanings.

 

Cash Equivalents - (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the United States
government, maturing within 12 months of the date of acquisition;
(b) certificates of deposit, time deposits and bankers’ acceptances maturing
within 12 months of the date of acquisition, and overnight bank deposits, in
each case which are issued by a commercial bank organized under the laws of the
United States or any state or district thereof, rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s at the time of acquisition, and (unless issued by a
Lender) not subject to offset rights; (c) repurchase obligations with a term of
not more than 30 days for underlying investments of the types described in
clauses (a) and (b) entered into with any bank meeting the qualifications
specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or
P-1 (or better) by Moody’s, and maturing within nine months of the date of
acquisition; and (e) shares of any money market fund that has substantially all
of its assets invested continuously in the types of investments referred to
above, has net assets of at least

 

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$500,000,000 and has the highest rating obtainable from either Moody’s or S&P.

 

Cash Management Services - any services provided from time to time by any
Tranche A Lender or any of its Affiliates to Parentany Obligor or any Subsidiary
in connection with operating, collections, payroll, trust, or other depository
or disbursement accounts, including automatic clearinghouse, controlled
disbursement, depository, electronic funds transfer, information reporting,
lockbox, stop payment, overdraft and/or wire transfer services.

 

CERCLA - the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).

 

Change of Control - means the occurrence of any of the following: (a) the direct
or indirect sale, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the properties or assets of the Parent and the other
Obligors, taken as a whole, to any “person” (as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934); (b) the adoption by
the shareholders of Parent of a plan relating to the liquidation or dissolution
of the Parent; (c) the Parent (by way of a report or any other filing pursuant
to Section 13(d) of the Securities Exchange Act of 1934, proxy, vote, written
notice or otherwise) becomes aware of the acquisition by any “person” or “group”
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities
Exchange Act of 1934, or any successor provision), including any group acting
for the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, or any
successor provision), other than the Permitted Holders, in a single transaction
or in a series of related transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, or any successor
provision) of 50% or more of the total voting power of the Voting Stock of the
Parent; (d) the first day on which a majority of the members of the Board of
Directors of the Parent are not Continuing Directors; (e) the Parent
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into, the Parent, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Parent or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where (A) the Voting Stock of
the Parent outstanding immediately prior to such transaction is converted into
or exchanged for Voting Stock (other than Disqualified Stock) of the surviving
or transferee Person constituting a majority of the voting power of the
outstanding shares of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance) and (B) immediately after
such transaction, no “person” or “group” (as such terms are used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934) other than a
Permitted Holder becomes, directly or indirectly, the beneficial owner (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, or any
successor provision) of 50% or more of the voting power of the Voting Stock of
the surviving or transferee Person or (f) the failure of (x) Bon-Ton to be a
wholly-owned direct Subsidiary of the Parent or (y) any Borrower (other than
Bon-Ton) to be a wholly-owned indirect Subsidiary of the Parent.

 

Chattel Paper - as defined in the UCC.

 

Check Processor - any Person, reasonably acceptable to the Agent, that acts as a
processor that converts checks accepted by a Borrower into electronic receipts
directed to a designated account of such Borrower.

 

Check Receivables - collectively, all present and future rights of a Borrower to
payment from any Check Processor arising from sales of goods or rendition of
services to customers who have purchased such goods or services using a check.

 

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Claims - as defined in Section 14.2.

 

CAA - the Clean Air Act (42 U.S.C. §7401 et. seq.)

 

Closing Date - as defined in Section 6.1.

 

Closing Date Facility Usage Percentage — means the Facility Usage calculated for
the Closing Date (after giving effect to any Loans made, and all Letters of
Credit issued or outstanding, on the Closing Date) divided by the aggregate
Commitments on the Closing Date.

 

Co-Collateral Agents — as defined in the Preamble.

 

Co-Collateral Agent Rights Agreement — a letter agreement by and among Agent,
the Co-Collateral Agents and the Obligors setting for the rights of the
Co-Collateral Agents concerning certain matters, substantially in the form of
Exhibit G hereto.

 

Co-Documentation Agents — as defined in the Preamble.

 

Co-Syndication Agents — as defined in the Preamble.

 

Collateral - all Property described in Section 7.1, all Property described in
any Security Documents as security for any Obligations, and all other Property
that now or hereafter secures (or is intended to secure) any Obligations.

 

Commercial Tort Claim - as defined in the UCC.

 

Commitment - for any Lender, the aggregate amount of such Lender’s Tranche A
Revolver Commitment and Tranche A-1 Revolver Commitment.  “Commitments” means
the aggregate amount of all Tranche A Revolver Commitments and Tranche A-1
Revolver Commitmentsshall have a correlative meaning.

 

Commitment Termination Date - the earliest to occur of (a) the Termination Date;
(b) the date on which Borrowers terminate the Tranche A Revolver Commitments
pursuant to Section 2.2 and repay, in full, in cash all Obligations (including,
for the avoidance of doubt, all Tranche A-1 Revolver Loans) other than
contingent indemnification obligations with respect to which no claim has been
asserted in writing; or (c) the date on which the Commitments are terminated (or
deemed terminated) and the Obligations are accelerated (or deemed accelerated)
pursuant to Section 11.2.

 

Commodity Exchange Act -  means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

Compliance Certificate - a certificate, substantially in the form of Exhibit D
hereto, by which Borrowers certify compliance with Section 10.3 and calculate
the applicable Level for the Applicable Margin and Unused Line Fee Rate.

 

Connection Income Taxes - Other Connection Taxes that are imposed on or measured
by net income (however denominated) or that are franchise Taxes or branch
profits Taxes.

 

Consignment Agreement - a written agreement by the relevant consignor and
consignee Obligor in favor of the Agent, in form and substance reasonably
satisfactory to Agent, expressly acknowledging that (x) such goods are held on
consignment and the consignor thereof retains title to such goods, (y) the
consignor of such goods shall disclaim any interest or Lien it may have in the
proceeds of such goods, and (z) consignee shall segregate such consigned goods
from the consignee’s other personal Property.

 

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Consolidated EBITDA - for any period, for the Parent and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period
plus (a) the following to the extent deducted in calculating such Consolidated
Net Income: (i) Consolidated Fixed Charges for such period, (ii) the provision
for Federal, state, local and foreign income taxes of the Parent and its
Subsidiaries for such period, (iii) depreciation and amortization expense,
(iv) all cash proceeds of business interruption insurance received by the
Obligors to the extent not included in Consolidated Net Income, (v) non-cash
losses in respect of obligations under Hedging Agreements, (vi) cost savings in
connection with any Permitted Acquisition to the extent (A) actually realized,
(B) projected or anticipated and permitted or required under Regulation S-K
under the Securities Laws or Regulation S-X under the Securities Laws or
(C) reasonably expected to be realized (and, in the case of clause (c),
reasonably approved by the Agent as such) within the next four (4) Fiscal
Quarters after such Permitted Acquisition is effected; provided that all such
cost savings shall be set forth in an officer’s certificate from a Senior
Officer of the Borrowers in reasonable detail describing and quantifying such
cost savings, (vii) non-cash impairment charges, asset write-offs or charges due
to the disposal of long-lived assets under GAAP to the extent such impairment
charge, asset write-off or charge reduced Consolidated Net Income, (viii) the
cumulative non-cash effect of accounting changes to the extent such changes
result in a reduction of Consolidated Net Income, (ix) any non-cash losses,
expenses or charges reducing Consolidated Net Income, excluding any non-cash
charge that, in the ordinary course of business, results in an accrual of a
reserve for cash charges in any future period, (x) expenses reducing
Consolidated Net Income incurred to the extent reimbursed in cash by
indemnification provisions in any agreement in connection with any Permitted
Acquisition and such reimbursed amount was not included within the calculation
of Consolidated Net Income, (xi) non-cash losses recognized and expenses
incurred in connection with the effect of currency and exchange rate
fluctuations on intercompany balances and other balance sheet items, and
(xii) other non-recurring or unusual expenses of the Obligors and their
Subsidiaries which are allowed in accordance with GAAP to be classified as
non-recurring or unusual expenses to the extent reducing such Consolidated Net
Income; provided that such expenses shall not exceed $20,000,000 in any period
of four consecutive Fiscal Quarters and minus (b) the following to the extent
included in calculating such Consolidated Net Income: (i) Federal, state, local
and foreign income tax credits of the Parent and its Subsidiaries for such
period, (ii) all non-cash items increasing Consolidated Net Income for such
period, (iii) amounts paid in cash in respect of non-cash charges which were
added back to Consolidated EBITDA in a prior period and (iv) other non-recurring
or unusual income of the Obligors and their Subsidiaries which are allowed in
accordance with GAAP to be classified as non-recurring or unusual income to the
extent increasing such Consolidated Net Income and in excess of $20,000,000 in
any period of four consecutive Fiscal Quarters.

 

Consolidated Fixed Charges - for any period, for the Parent and its Subsidiaries
on a consolidated basis, the sum of cash payments made or required to be made on
a pro forma basis for (a) all scheduled permanent principal payments, interest,
premium payments, debt discount, fees (excluding (x) any fees incurred in
connection with the Loan Documents, including, without limitation, any waiver,
amendment, extension, supplement or other modification with respect thereto,
(y) any fees incurred in connection with the incurrence, creation or assumption
by any Obligor or any Subsidiary thereof of any Debt permitted hereunder,
including, without limitation, in connection with any Refinancing of the Senior
Note Debt, and (z) any premium payments in connection with any Refinancing of
the Senior Note Debt), charges and related expenses of the Parent and its
Subsidiaries in connection with Borrowed Money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case
determined in accordance with GAAP, (b) the portion of rent expense of the
Parent and its Subsidiaries with respect to such period under Capital Leases
determined in accordance with GAAP and (c) Distributions made during such
period.

 

Consolidated Fixed Charge Coverage Ratio - as of any date of determination, the
ratio of

 

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(a) the result of (i) Consolidated EBITDA for the four prior Fiscal Quarter
period (or, for purposes of Section 10.1.2(n), Section 10.1.2(o), and
Section 10.3.2, twelve consecutive fiscal months) ending on such date, minus
(ii) Capital Expenditures (net of landlord or vendor contributions for Capital
Expenditures) for such period (but not less than zero), minus (iii) cash
Federal, state, local or foreign income taxes (net of tax refunds in cash) of
the Parent and its Subsidiaries paid for such period (but not less than zero),
to (b) Consolidated Fixed Charges for such period.

 

Consolidated Net Income - for any period, for the Parent and its Subsidiaries on
a consolidated basis, the net income of the Parent and its Subsidiaries
(excluding extraordinary gains and extraordinary losses, in each case determined
in accordance with GAAP) for that period.

 

Contingent Obligation - any obligation of a Person arising from a guaranty,
indemnity or other assurance of payment or performance of any Debt, lease,
dividend or other obligation (“primary obligations”) of another obligor
(“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of such Person under any (a) guaranty, endorsement, co-making or sale
with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof; provided that
“Contingent Obligation” shall not include any product warranties given in the
ordinary course of business.  The amount of any Contingent Obligation shall be
deemed to be the stated or determinable amount of the primary obligation (or, if
less, the maximum amount for which such Person may be liable under the
instrument evidencing the Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto.

 

Continuing Directors - as of any date of determination, those members of the
Board of Directors of the Parent, each of whom: (1) was a member of such Board
of Directors on the Closing Date; or (2) was nominated for election or elected
to such Board of Directors with the approval of a majority of the then
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.

 

Convertible Note Debt - unsecured Debt of Bon-Ton and any other Obligor which
may be convertible, exercisable or exchangeable for or into Capital Stock of
Bon-Ton or any other Obligor (other than Disqualified Stock).

 

Convertible Note Debt Documents - all agreements, instruments and documents from
time to time executed in favor of all or any of the holders of the Convertible
Note Debt.

 

Copyright Security Agreements - each memorandum of grant of security interest in
copyrights or other copyright security agreement pursuant to which an Obligor
grants to Agent, for the benefit of Secured Parties, a Lien on such Obligor’s
interests in copyrights, as security for the Obligations.

 

Credit Card Issuer — collectively (x) MasterCard International, Inc., Visa,
U.S.A., Inc., Visa International and American Express, World Financial Network
National Bank and Discover and (y) HSBC, as issuer of the Borrowers’ private
label credit card program, and any replacement thereof that is reasonably
acceptable to Agent.

 

Credit Card Notification - as defined in Section 6.1(n).

 

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Credit Card Processor - any Person that acts as a credit card clearinghouse or
processor with respect to any sales transactions involving credit card purchases
by customers using credit cards issued by any Credit Card Issuer.

 

Credit Card Receivables - collectively, all present and future rights of
Obligors to payment from (a) any Credit Card Issuer or Credit Card Processor
arising from sales of goods or rendition of services to customers who have
purchased such goods or services using a credit or debit card and (b) any Credit
Card Issuer or Credit Card Processor in connection with the sale or transfer of
Accounts arising pursuant to the sale of goods or rendition of services to
customers who have purchased such goods or services using a credit card or a
debit card, including, but not limited to, all amounts at any time due or to
become due from any Credit Card Issuer or Credit Card Processor under the Credit
Card Notifications or otherwise.

 

Credit Card Receivables Reserve - reserves, established by Agent in its
reasonable exercise of its credit judgment, to reflect factors that may
negatively impact the value of Credit Card Receivables (including, without
limitation, for chargeback or other accrued liabilities or offsets by Credit
Card Processors and amounts to adjust for material claims, offsets, defenses or
counterclaims or other material disputes with an Account Debtor).

 

CWA - the Clean Water Act (33 U.S.C. §§ 1251 et seq.).

 

Debt - as applied to any Person, without duplication, whether or not included as
indebtedness or liabilities in accordance with GAAP (a) all obligations of such
Person for borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments; (b) all direct
or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments; (c) net obligations of such Person under
any Hedging Agreement; (d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts payable in the
ordinary course of business); (e) indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse; (f) Capital Leases and synthetic lease
obligations; (g) all obligations of such Person in respect of Disqualified
Stock; and (h) all Guarantees of such Person in respect of any of the
foregoing.  For all purposes hereof, the Debt of any Person shall include the
Debt of any partnership or joint venture (other than a joint venture that is
itself a corporation or limited liability company) in which such Person is a
general partner or a joint venturer, unless such Debt is expressly made
non-recourse to such Person.

 

Default - an event or condition that, with the lapse of time or giving of
notice, would constitute an Event of Default.

 

Default Rate - for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2% plus the interest rate otherwise applicable
thereto.

 

Defaulting Lender - any Lender that (a) has failed to fund any portion of the
Loans or any payment in respect of an LC Obligation required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder unless such failure has been cured, (b) has otherwise failed to pay
over to any Agent or any other Lender any other amount required to be paid by it
hereunder within one Business Day of the date when due unless the subject of a
good faith dispute or unless such failure has been cured, (c) has been deemed
insolvent or become the subject of an Insolvency Proceeding or a Bail-In Action,
(d) with respect to which the Agent or any Issuing Bank has a good faith belief
that such Lender has defaulted in fulfilling its obligations under one or more
other syndicated credit facilities or (e) with respect to which an entity that
controls such

 

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Lender has been deemed insolvent or become subject to an Insolvency Proceeding.

 

Deposit Account - as defined in the UCC.

 

Designated Jurisdiction - means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

 

Disqualified Institution - a business competitor of the Borrowers and their
Subsidiaries identified by the Borrower Agent in its reasonable discretion and
in writing to the Agent from time to time, and any Persons known by Agent to be
an Affiliate of such competitor.

 

Disqualified Stock - any Capital Stock that, by its terms (or by the terms of
any security into which it is convertible, or for which it is exchangeable, in
each case at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is six months after the
Termination Date.  Notwithstanding the preceding sentence, any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof have
the right to require the Parent to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Parent
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 10.2.4.  The term
“Disqualified Stock” shall also include any options, warrants or other rights
that are convertible into Disqualified Stock or that are redeemable at the
option of the holder, or required to be redeemed, prior to the date that is six
months after the Termination Date.

 

Distribution - any declaration or payment of a distribution, interest or
dividend on any Equity InterestCapital Stock (other than payment-in-kind); any
distribution, advance or repayment of Debt to a holder of Equity
InterestsCapital Stock; or any purchase, redemption, or other acquisition or
retirement for value of any Equity InterestCapital Stock.

 

Distribution Center - the warehouse and distribution facilities operated by the
Obligors and located at 3585 S. Church Street, Whitehall, Pennsylvania, 1340
East Dayton-Yellow Springs Road, Fairborn, Ohio, 4650 Shepard Trial,
Rockford, Illinois and 1835 Jefferson Avenue, Naperville, Illinois, and any
other warehouse and distribution facilities operated by the Borrowers.

 

Document - as defined in the UCC.

 

Documentation Agents - as defined in the Preamble.

 

Dollars - lawful money of the United States.

 

Dominion Account - each special account established by Borrowers at Bank of
America or another bank reasonably acceptable to Agent, over which Agent has
exclusive control for withdrawal purposes.

 

EEA Financial Institution - means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

EEA Member Country - means any of the member states of the European
Union, Iceland, Liechtenstein, and Norway.

 

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EEA Resolution Authority - means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

Eligible Assignee - means (a) with respect to any Tranche A Revolver Loans, a
Person that is (ai) a Lender, U.S.-based Affiliate of a Lender or Approved Fund;
(bprovided that no Tranche A-1 Lender, Affiliate of a Tranche A-1 Lender or
Approved Fund of a Tranche A-1 Lender may be an Eligible Assignee pursuant to
this clause (i) without the written approval of Agent; (ii) any other financial
institution approved by Agent (such approval not to be unreasonably withheld or
delayed) and, so long as no Event of Default under Section 11.1(a) or
Section 11.1(k) has occurred and is continuing, Borrower Agent (which approval
by Borrower Agent shall not be unreasonably withheld or delayed, and shall be
deemed given unless Borrower Agent shall object thereto by written notice to
Agent within two (2) Business Days after notice of the proposed assignment),
that is organized under the laws of the United States or any state or district
thereof, has total assets in excess of $5,000,000,000, extends asset-based
lending facilities in its ordinary course of business and whose becoming an
assignee would not result in a breach of Section 13.5; provided that the
foregoing criteria in this clause (ii) may be waived pursuant to the written
approval of both of Agent and Borrower Agent; and (iii) during any Event of
Default under Section 11.1(a) or Section 11.1(k), any Person acceptable to Agent
in its discretion, and (b) with respect to any Tranche A-1 Revolver Loans, a
Person that is (i) a Lender, an Affiliate of a Lender or an Approved Fund,
(ii) any other financial institution approved by Agent (such approval not to be
unreasonably withheld or delayed) and, so long as no Event of Default under
Section 11.1(a) or Section 11.1(k) has occurred and is continuing, Borrower
Agent (which approval by Borrower Agent shall not be unreasonably withheld or
delayed, and shall be deemed given if no objection is madeunless Borrower Agent
shall object thereto by written notice to Agent within two (2) Business Days
after notice of the proposed assignment), that is organized under the laws of
the United States or any state or district thereof, has total assets in excess
of $5 billion, extends asset-based lending facilities in its ordinary course of
business and whose becoming an assignee would not constitute a prohibited
transaction underresult in a breach of Section 4975 of ERISA or any other
Applicable Law; provided that the foregoing criteria in this clause (b) may be
waived pursuant to the written approval of both of Agent and Borrower Agent; and
(c13.5, (iii) any other entity (other than a natural Person) that is an
“accredited investor” (as defined in Regulation D under the Securities Act) that
extends credit or buys loans as one of its businesses, including insurance
companies, investment or mutual funds, or lease financing companies, (iv) during
any Event of Default under Section 11.1(a) or Section 11.1(k), any Person
acceptable to Agent in its discretion; provided that notwithstanding the
foregoing, in any event, “Eligible Assignee” shall not include (iw) any Obligor
or any Affiliate or Subsidiary of any Obligor and (ii, (x) any Defaulting Lender
or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder,
would constitute any of the foregoing Persons described in this clause (x),
(y) any natural Person (or a holding company, investment vehicle or trust for,
or owned and operated for the primary benefit of a natural Person) or (z) any
Disqualified Institution who is identified by the Borrower Agent as such prior
to an assignment.

 

Eligible Check Receivables - at the time of any determination thereof, each
Check Receivable that satisfies the following criteria at the time of creation
and continues to meet the same at the time of such determination: such Check
Receivable has been earned by performance and represents the bona fide amounts
due to a Borrower from a Check Processor, and originated in the ordinary course
of business of such Borrower.  Without limiting the foregoing, to qualify as an
Eligible Check Receivable, the related Account or Payment Intangible shall
indicate no Person other than a Borrower as payee or remittance party.  In
determining the amount to be so included, the face amount of the related Account
or Payment Intangible shall be reduced by, without duplication, to the extent
not reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that a Borrower may be obligated to

 

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rebate to a customer or a Check Processor pursuant to the terms of any agreement
or understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account or Payment Intangible but not yet applied by
the Obligors to reduce the amount of such Check Receivable.  Any Check
Receivables meeting the foregoing criteria shall be deemed Eligible Check
Receivables but only as long as such Check Receivable is not included within any
of the following categories, in which case such Check Receivable shall not
constitute an Eligible Check Receivable:

 

(a)                              Check Receivables which do not constitute an
“Account” or “Payment Intangible” (each, as defined in the UCC);

 

(b)                              Check Receivables due from Check Processors
that have been outstanding for more than five (5) Business Days from the date of
acceptance of the underlying checks at the point of sale;

 

(c)                               Check Receivables that are not denominated in
U.S. dollars;

 

(d)                              Check Receivables with respect to which the
Borrowers do not have good, valid and marketable title thereto;

 

(e)                               Check Receivables due from Check Processors
that (i) are not subject to a first priority (other than Permitted Liens
permitted pursuant to any of clauses (c), (d), (f), (o), (t), (u), (w) or (x) of
such definition and entitled to priority under Applicable Law) perfected
security interest in favor of Agent for the benefit of the Secured Parties or
(ii) are subject to any Liens except for (x) Liens in favor of the Agent and
(y) Liens permitted pursuant to clauses (c) through (x) of Section 10.2.2, so
long as such Liens (other than Permitted Liens entitled to priority under
Applicable Law) are junior to the Liens granted to Agent;

 

(f)                                Check Receivables due from Check Processors
which are disputed between a Borrower and a Check Processor, or with respect to
which a claim, counterclaim, offset or chargeback has been asserted, by the
related Check Processor (but only to the extent of such dispute, claim,
counterclaim, offset or chargeback);

 

(g)                               Check Receivables due from Check Processors as
to which the Check Processor has the right under certain circumstances to
require the Borrowers to repurchase such Accounts from such Check Processor;

 

(h)                              Except as otherwise approved by Agent, Check
Receivables due from Check Processors as to which the Agent has not received a
notification (which shall be in form and substance reasonably satisfactory to
the Agent and provide, among other things, that the Check Processor agrees to
make payment therefor into a designated account);

 

(i)                                  Check Receivables due from a Check
Processor of the applicable check which is the subject of any proceeding under
any debtor relief law;

 

(j)                                 Check Receivables which are not a valid,
legally enforceable obligation of the applicable Check Processor with respect
thereto;

 

(k)                              Check Receivables which are evidenced by
“chattel paper” or an “instrument” of any kind (which for the avoidance of doubt
shall not include the underlying checks themselves) unless such “chattel paper”
or “instrument” is in the possession of Agent, and to the extent necessary or
appropriate as reasonably determined by the Agent, endorsed to Agent; or

 

(l)                                  Check Receivables due from Check Processors
which Agent determines, in its reasonable credit judgment, to be unlikely to be
collected.

 

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Notwithstanding the above, Agent reserves the right, at any time and from time
to time after the Amendment Closing Date, to adjust the criteria set forth
above, to establish new criteria and to adjust the applicable advance rate with
respect to Eligible Check Receivables, in its reasonable credit judgment,
subject to the approval of the Supermajority Lenders in the case of adjustments
of criteria or establishment of new criteria which have the effect of making
more credit available or subject to the approval of all Lenders (except
Defaulting Lenders as provided in Section 4.2) in the case of changes in the
applicable advance rates which have the effect of making more credit available.

 

Eligible Credit Card Accounts - at the time of any determination thereof, each
Credit Card Receivable that satisfies the following criteria at the time of
creation and continues to meet the same at the time of such determination: such
Credit Card Receivable has been earned by performance and represents the bona
fide amounts due to a Borrower from a Credit Card Processor and/or Credit Card
Issuer, and in each case originated in the ordinary course of business of such
Borrower.  Without limiting the foregoing, to qualify as an Eligible Credit Card
Account, an Account shall indicate no Person other than a Borrower as payee or
remittance party.  In determining the amount to be so included, the face amount
of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that a Borrower may be obligated to rebate to a customer, a Credit Card
Processor or Credit Card Issuer pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the Obligors to
reduce the amount of such Credit Card Receivable.  Any Credit Card Receivables
meeting the foregoing criteria shall be deemed Eligible Credit Card Accounts but
only as long as such Credit Card Receivable is not included within any of the
following categories, in which case such Credit Card Receivable shall not
constitute an Eligible Credit Card Account:

 

(a)                              Credit Card Receivables which do not constitute
an “Account” (as defined in the UCC);

 

(b)                              Credit Card Receivables due from Credit Card
Processors that have been outstanding for more than five (5) Business Days from
the date of sale;

 

(c)                               Credit Card Receivables that are not
denominated in U.S. dollars;

 

(d)                              Credit Card Receivables with respect to which
the Borrowers do not have good, valid and marketable title thereto;

 

(e)                               Credit Card Receivables due from Credit Card
Processors or Credit Card Issuers that (i) are not subject to a first priority
(other than Permitted Liens permitted pursuant to any of clauses (c), (d), (f),
(o), (t), (u), (w) or (x) of such definition and entitled to priority under
Applicable Law) perfected security interest in favor of Agent for the benefit of
the Secured Parties or (ii) are subject to any Liens except for (x) Liens in
favor of the Agent and (y) Liens permitted pursuant to clauses (c) through
(x) of Section 10.2.2, so long as such Liens (other than Permitted Liens
entitled to priority under Applicable Law) are junior to the Liens granted to
Agent;

 

(f)                                Credit Card Receivables due from Credit Card
Processors or Credit Card Issuers which are disputed between a Borrower and a
Credit Card Processor or Credit Card Issuers, or with respect to which a claim,
counterclaim, offset or chargeback has been asserted, by the related Credit Card
Processor or Credit Card Issuers (but only to the extent of such dispute, claim,
counterclaim, offset or chargeback);

 

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(g)                               Credit Card Receivables due from Credit Card
Processors or Credit Card Issuers as to which the Credit Card Processor or the
Credit Card Issuers has the right under certain circumstances to require the
Borrowers to repurchase such Accounts from such Credit Card Processor or such
Credit Card Issuers;

 

(h)                              Except as otherwise approved by Agent, Credit
Card Receivables due from Credit Card Processors or Credit Card Issuers as to
which the Agent has not received a Credit Card Notification;

 

(i)                                  Credit Card Receivables due from a Credit
Card Processor or Credit Card Issuer of the applicable credit card which is the
subject of any proceeding under any debtor relief law;

 

(j)                                 Credit Card Receivables which are not a
valid, legally enforceable obligation of the applicable Credit Card Processor or
Credit Card Issuer with respect thereto;

 

(k)                              Credit Card Receivables which are evidenced by
“chattel paper” or an “instrument” of any kind unless such “chattel paper” or
“instrument” is in the possession of Agent, and to the extent necessary or
appropriate as reasonably determined by the Agent, endorsed to Agent; or

 

(l)                                  Credit Card Receivables due from Credit
Card Issuers or Credit Card Processors which Agent determines, in its reasonable
credit judgment, to be unlikely to be collected.

 

Notwithstanding the above, Agent reserves the right, at any time and from time
to time after the Closing Date, to adjust the criteria set forth above, to
establish new criteria and to adjust the applicable advance rate with respect to
Eligible Credit Card Accounts, in its reasonable credit judgment, subject to the
approval of the Supermajority Lenders in the case of adjustments of criteria or
establishment of new criteria which have the effect of making more credit
available or subject to the approval of all Lenders (except Defaulting Lenders
as provided in Section 4.2) in the case of changes in the applicable advance
rates which have the effect of making more credit available.

 

Eligible Inventory - Inventory owned by a Borrower that Agent, in its reasonable
credit judgment, deems, based on (i) the most recent Borrowing Base Certificate
delivered to Agent, (ii) the salability, at retail, of such Inventory (valued at
the lower of cost or market), (iii) such other factors as affect the
marketability of such Inventory and (iv) other information available to Agent,
in its reasonable credit judgment, to be “Eligible Inventory” for purposes of
this Loan Agreement.  Without limiting the foregoing, no Inventory shall be
Eligible Inventory unless (a) it is finished goods and not work-in-process, raw
materials, packaging or shipping materials, labels, samples, display items,
bags, replacement parts or manufacturing supplies; (b) it is not held on
consignment; (c) it is in new and saleable condition and is not damaged,
defective, shopworn or otherwise unfit for sale; (d) it is not slow-moving,
obsolete or unmerchantable, and does not constitute returned to vendor or
repossessed goods; (e) to the knowledge of the Obligors it meets all standards
imposed by any Governmental Authority, and does not constitute hazardous
materials under any Environmental Law; (f) [reserved]; (g) it is (unless such
Inventory constitutes Eligible L/C Inventory) subject to Agent’s duly perfected,
first priority Lien, and is free and clear from all Liens or rights of any
person (including, without limitation, the rights of any purchaser that has made
progress payments and the rights of any surety that has issued a bond to assure
such Borrower’s performance with respect to the Inventory) except (x) Agent and
the Lenders and (y) Liens permitted pursuant to clauses (c) through (w) of
Section 10.2.2, so long as such Liens (other than

 

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Permitted Liens permitted pursuant to any of clauses (c), (d), (f), (o), (t),
(u) or (w) of such definition and entitled to priority under Applicable Law) are
junior to the Liens granted to Agent and the Lenders; (h) it is within the
continental United States, is not in transit except between locations of
Borrowers where such locations are in compliance with the provisions of clause
(k) below (unless such Inventory constitutes Eligible In-Transit Inventory or
Eligible L/C Inventory) and is not consigned to any Person; (i) it is not
subject to any warehouse receipt or negotiable Document unless such document has
been delivered to the Agent or other Persons acceptable to it with all necessary
endorsements free and clear of all Liens other than (x) Liens in Agent’s favor
and (y) Liens permitted pursuant to clauses (c) through (w) of Section 10.2.2,
so long as such Liens (other than Permitted Liens permitted pursuant to any of
clauses (c), (d), (f), (o), (t), (u) or (w) of such definition and entitled to
priority under Applicable Law) are junior to the Liens granted to Agent and the
Lenders; (j) if it has a value exceeding $500,000 in the aggregate, it is not
subject to any License or other arrangement that restricts such Borrower’s or
Agent’s right to dispose of such Inventory, unless Agent has received an
appropriate Lien Waiver; (k) it is not located on leased premises (1) consisting
of a Large Inventory Location or (2) located in a Landlord Lien State, or in the
possession of a warehouseman, processor, repairman, mechanic, shipper, freight
forwarder or other Person unless, in each case, the lessor or such Person has
delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been
established; (l) it is reflected in the details of the current inventory stock
ledger of the applicable Borrower; (m) it is of a type held for sale in the
ordinary course of such Borrower’s business; (n) the representations or
warranties pertaining to Inventory set forth in this Loan Agreement and the
other Loan Documents are true in all material respects as to such Inventory;
(o) it does not consist of any costs associated with advertising load or
unearned discounts; and (p) it is covered by casualty insurance reasonably
acceptable to Agent.

 

Eligible In-Transit Inventory - means without duplication of other Eligible
Inventory, all finished goods Inventory (valued at the lower of cost or market)
owned by Borrowers, not covered by Letters of Credit, which Inventory (a) is
located in the continental United States and in transit to one of the Borrower’s
facilities and which Inventory (i) is owned by a Borrower and either (A) has
been paid for with a draw of an Eligible Trade L/C by a Borrower or (B) payment
for which is not yet due and has not yet been paid for by a Borrower but which
is located at one of the Borrower’s distribution facilities and has not yet been
recorded on a Borrower’s inventory stock ledger in the ordinary course; (ii) is
fully insured; (iii) is subject to a first priority security interest in and
Lien upon such goods in favor of Agent (except for any possessory Lien upon such
goods in the possession of a freight carrier or shipping company securing only
the freight charges for the transportation of such goods to such Borrower);
(iv) is evidenced or deliverable pursuant to Documents that have been delivered
to Agent or an agent acting on its behalf pursuant to a Lien Waiver or
designating Agent as consignee; and (v) is otherwise “Eligible Inventory”
hereunder; or (b) is in transit for not more than forty (40) days directly from
a point of shipment outside of the continental United States to one of the
Obligors’ owned or leased locations within the continental United States,
provided that, with respect to this clause (b), (i) a Borrower has title to such
Inventory, and either (X) such Inventory is not subject to a negotiable bill of
lading or other document of title and the shipping documents relating to such
Inventory (including, without limitation, so-called “forwarders cargo receipts”
or “non-negotiable express bills of lading”) reasonably acceptable to the Agent
have been delivered to the Agent or an agent acting on behalf of the Agent and
such shipping documents name a Borrower as consignee and shipper (or such other
arrangements reasonably satisfactory to the Agent relating to such shipping
documents in respect of such Inventory shall have been made) or (Y) in the event
such Inventory is subject to negotiable bills of lading or other documents of
title, such negotiable bills of lading or other documents of title have been
(1) upon the request of the Agent, issued with the Agent as consignee and a
Borrower as shipper and (2) delivered to the Agent or an agent acting on behalf
of the Agent (or such other arrangements reasonably satisfactory to the Agent
relating to such negotiable bills of lading or other documents of title in
respect of such Inventory shall have been made), (iii) such Inventory is
subject, to the reasonable satisfaction of Agent, to a first priority perfected
security

 

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interest in favor of Agent, (iv) at the request of Agent, the vendor or the
supplier of such Inventory has agreed to waive its claims in or to such
Inventory (including any right to stop such Inventory in transit), in a manner
reasonably acceptable to Agent, once such Inventory is delivered to a freight
forwarder or other representative of the Borrowers who has entered into an
agreement of the type described in clause (vi) below, (v) such Inventory is
covered by insurance reasonably acceptable to Agent, (vi) at the request of the
Agent, each relevant freight carrier, freight forwarder, customs broker and
shipping company in possession of such in-transit Inventory shall have
(A) entered into bailee arrangements reasonably satisfactory to Agent and
(B) indicated or otherwise acknowledged Agent’s security interest in such
Inventory and in any shipping documents issued or carried by such freight
carrier or shipping company (including, without limitation, waybills, airway
bills, seaway bills, receipts, or any similar document), in each case, in a
manner reasonably satisfactory to Agent, and (vii) such Inventory would
otherwise satisfy all of the requirements of “Eligible Inventory” hereunder. 
Notwithstanding the foregoing, in no event shall the Aggregate Borrowing Base
comprised of Eligible In-Transit Inventory under clause (b) above exceed
$15,000,000.

 

Eligible L/C Inventory — as of any date of determination, without duplication of
other Eligible Inventory, all finished goods Inventory (valued at the lower of
cost or market) covered by an Eligible Trade L/C issued for the account of a
Borrower, which inventory (a) meets all of the requirements for Eligible
Inventory, (b) will be Eligible In-Transit Inventory upon a draw of the subject
Eligible Trade Letter of Credit, and (c) will be received by a Borrower in the
United States not later than 90 days from the date of determination (as
determined by the Borrowers consistent with their past practices).

 

Eligible Real Estate - Real Estate owned by a Borrower described on Schedule 7.3
(as may be updated pursuant to, and in accordance with, Section 7.3) and which
Agent, in its reasonable discretion, deems to be Eligible Real Estate.  Without
limiting the generality of the foregoing, no Real Estate shall be Eligible Real
Estate unless: (a) it is located in the United States; (b) it is subject to
Agent’s duly perfected, first priority Lien, and no other Lien except Permitted
Liens; (c) it is subject to a title insurance policy reasonably acceptable to
Agent and Agent has received title searches, reasonably acceptable to it, with
respect to such Real Estate; (d) it has been appraised by a third party
appraiser reasonably acceptable to Required Lenders; (e) Agent has received an
environmental site assessment of such Real Estate reasonably acceptable to
Agent, which such environmental site assessment shall include Phase I reports
and, if requested by Agent, Phase II reports; (f) if requested by Agent, Agent
has received estoppel agreements reasonably acceptable to Agent, from ground
lessors; (g) Agent has received all other Related Real Estate Documents
requested by it with respect to such Real Estate and such Related Real Estate
Documents are reasonably satisfactory to Agent and (h) such Real Estate is
improved by fully constructed buildings occupied by a Borrower or a Guarantor. 
For the avoidance of any doubt, Real Estate owned by any SPE shall not be deemed
“Eligible Real Estate” prior to the occurrence of the SPE Real Estate Effective
Date applicable to such Real Estate.

 

Eligible Trade L/C - any Letter of Credit issued in compliance with
Section 2.3.1(e) for payment of the purchase price of finished goodgoods
Inventory which will be Eligible In-Transit Inventory upon presentation of a
draft under such Letter of Credit.

 

Enforcement Action - any rightful action to enforce any Obligations or Loan
Documents or to realize upon any Collateral (whether by judicial action,
self-help, notification of Account Debtors, exercise of setoff or recoupment, or
otherwise).

 

Environmental Agreement - each agreement of Obligors with respect to any Real
Estate subject to a Mortgage, pursuant to which Obligors agree to indemnify and
hold harmless Agent and Lenders from liability under any Environmental Laws,
except for liability caused by any actions of Agent or the Lenders which are in
violation of the Environmental Laws.

 

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Environmental Laws — all Requirements of Applicable Law and Permits imposing
liability or standards of conduct for or relating to the regulation and
protection of human health (as it relates to exposure to Hazardous Materials),
employee safety, the environment and natural resources, including CERCLA, the
SDWA, the Hazardous Materials Transportation Act (49 U.S.C. §§ 5101 et seq.),
the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et
seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Clean
Air Act (42 U.S.C. §§ 7401 et seq.), the Federal Water Pollution Control Act (33
U.S.C. §§ 1251 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§
651 et seq.), the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), all
regulations promulgated under any of the foregoing, all analogous Requirements
of Applicable Law and Permits and any environmental transfer of ownership
notification or approval statutes.

 

Environmental Liabilities — all Liabilities (including costs of Remedial
Actions, natural resources damages and costs and expenses of investigation and
feasibility studies) that may be imposed on, incurred by or asserted against any
Obligors as a result of, or related to, any claim, suit, action, investigation,
proceeding or demand by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or common law or
otherwise, arising under any Environmental Law or in connection with any
environmental condition or with any Environmental Release and resulting from the
ownership, lease, sublease or other operation or occupation of property by any
Obligors, whether on, prior or after the date hereof.

 

Environmental Notice - a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible violation of, litigation relating to, or potential fine or liability
under any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.

 

Environmental Release - a release of a Hazardous Material as defined in CERCLA,
RCRA, or under any other Environmental Law.

 

Equipment - as defined in the UCC, including all machinery, apparatus,
equipment, fittings, furniture, fixtures, motor vehicles and other tangible
personal Property (other than Inventory), and all parts, accessories and special
tools therefor, and accessions thereto and, in any event, including all such
Person’s machinery and equipment, including processing equipment, conveyors,
machine tools, data processing and computer equipment including embedded
software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.

 

Equity Interest - the interest of any (a) shareholder in a corporation,
(b) partner in a partnership (whether general, limited, limited liability or
joint venture), (c) member in a limited liability company, or (d) other Person
having any other form of equity security or ownership interest.

 

ERISA - the Employee Retirement Income Security Act of 1974.

 

EU Bail-In Legislation Schedule - means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

 

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Event of Default - as defined in Section 11.

 

Excess Availability - determined as of any date, the result of (a) the lesser of
(i) the aggregate Tranche A Revolver Commitments at such time and (ii) the
AggregateTranche A Borrowing Base at such time minus (b) the Facility Usage at
such time.sum of (i) the outstanding principal balance of all Tranche A Revolver
Loans on such date, (ii) the outstanding amount of LC Obligations on such date,
and (iii) the Tranche A-1 Utilization Amount.

 

Excess Availability Trigger Event - the first date on which Excess Availability
for five consecutive Business Days is less than 12.5% of the lesser of (x) the
aggregate Commitments at such time and (y) the Aggregate Borrowing Base at such
time.

 

Excess Availability Trigger Period - any period (a) commencing upon the
occurrence of a Excess Availability Trigger Event and (b) ending on the date
that Excess Availability for a period of sixty (60) consecutive calendar days
exceeds 12.5% of the lesser of (x) the aggregate Commitments at such time and
(y) the Aggregate Borrowing Base at such time.

 

Excluded Swap Obligation - means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act
(determined after giving effect to Section 14.20 and any other “keepwell,
support or other agreement” for the benefit of such Guarantor and any and all
guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the
time the Guaranty of such Guarantor, or a grant by such Guarantor of a security
interest, becomes effective with respect to such Swap Obligation. If a Swap
Obligation arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guaranty or security interest is or becomes
excluded in accordance with the first sentence of this definition.

 

Excluded Tax — means (i) Taxes on the net income or gross receipts of a Lender
or any franchise or capital stock Tax, (ii) branch profits Taxes imposed by the
United States of America or any similar Tax imposed by any other jurisdiction,
and (iii) any withholding Tax imposed on Foreign Lender as a result of such
Foreign Lender’s failure to comply with FATCA.Taxes - any of the following Taxes
imposed on or with respect to Recipient or required to be withheld or deducted
from payment to a Recipient, (a) Taxes imposed on or measured by net income
(however denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of such Recipient being organized under the laws of, or
having its principal office or, in the case of any Lender, its Lending Office
located in, the jurisdiction imposing such Tax (or any political subdivision
thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender,
U.S. federal withholding Taxes imposed on amounts payable to or for the account
of such Lender with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan or Commitment (other than pursuant to an assignment request
by the Borrower Agent under Section 3.6) or (ii) pursuant to Section 5.8.1(b) or
Section 5.8.3, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its Lending Office, (c) Taxes
attributable to such Recipient’s failure to comply with Section 5.8.5 and
(d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

Existing Credit Agreement - that certain Amended and Restated Loan and Security
Agreement, dated December 4, 2009, by and among The Bon-Ton Department
Stores, Inc. and the

 

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other obligors party thereto, the lenders party thereto, Bank of America, N.A.
as the agent, Banc of America Securities LLC, GE Capital Markets, Inc., and
Wells Fargo Capital Finance, LLC (f/k/a Wells Fargo Retail Finance, LLC) as
joint lead arrangers and joint book runners, General Electric Capital
Corporation and Wells Fargo Retail Finance, LLC, as co-syndication agents and
Regions Bank, as documentation agent, as amended and in effect from time to
time.

 

Extraordinary Expenses - all reasonable and documented out-of-pocket costs,
expenses or advances that Agent or any Co-Collateral Agent may incur during the
occurrence and continuance of a Default or Event of Default, or during the
pendency of an Insolvency Proceeding of an Obligor, including those relating to
(a) any audit, inspection, repossession, storage, repair, appraisal, insurance,
manufacture, preparation or advertising for sale, sale, collection, or other
preservation of or realization upon any Collateral; (b) any action, arbitration
or other proceeding (whether instituted by or against Agent, any Lender, any
Obligor, any representative of creditors of an Obligor or any other Person) in
any way relating to any Collateral (including the validity, perfection, priority
or avoidability of Agent’s Liens with respect to any Collateral), Loan Documents
or Obligations, including any lender liability or other Claims; (c) the
exercise, protection or enforcement of any rights or remedies of Agent in, or
the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of
any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement
Action; (f) negotiation and documentation of any modification, waiver, workout,
restructuring or forbearance with respect to any Loan Documents or Obligations;
or (g) Protective Advances.  Such costs, expenses and advances include transfer
fees, taxes, storage fees, insurance costs, permit fees, utility reservation and
standby fees, legal fees, financial advisor fees, appraisal fees, brokers’ fees
and commissions, auctioneers’ fees and commissions, accountants’ fees,
environmental study fees, wages and salaries paid to employees of any Obligor or
independent contractors in liquidating any Collateral, and travel expenses.

 

Facility Usage — means, at any time, the sum of the outstanding principal amount
of all Loans at such time and the aggregate amount of LC Obligations outstanding
at such time.

 

Facility Usage Percentage — means, for any Fiscal Quarter, the quotient
(expressed as a percentage) of the average daily total Facility Usage during
such Fiscal Quarter divided by the average daily aggregate Commitments during
such Fiscal Quarter.

 

FATCA - means Sections 1471 through 1474 of the IRC, as of the date of this Loan
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471 (b)(1) of the IRC and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such sections of
the IRC.

 

FCCR Reporting Monitoring Event - at any time, the failure of the Borrowers to
maintain Excess Availability at least equal to 30% of the lesser of (i) the
aggregate Commitments at such time and (ii) the Aggregate Borrowing Base at such
time for any three (3) Business Days (which need not be consecutive) during the
applicable fiscal month.

 

FCCR Trigger Event - at any time, the failure of the Borrowers to maintain
Excess Availability at least equal to 20% of the lesser of (i) the aggregate
Commitments at such time and (ii) the Aggregate Borrowing Base at such time. 
For purposes of this Loan Agreement, the occurrence of a FCCR Trigger Event
shall be deemed continuing until Excess Availability has at least equaled 20% of
the lesser of (x) the aggregate Commitments at such time and (y) the Aggregate
Borrowing Base at such time, in which case a FCCR Trigger Event shall no longer
be deemed to be continuing for purposes of this Loan Agreement (it being
understood and agreed that

 

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the any Default under Section 10.3.2 hereof shall continue until affirmatively
waived in accordance with Section 14.1.1).  For certainty, the termination of
any FCCR Trigger Event shall not preclude a subsequent FCCR Triggering Event
from occurring.

 

Federal Funds Rate - for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America,
N.A. on such day on such transactions as reasonably determined by the Agent.

 

Fee Letter - the fee letter agreement among Agent, MLPFS, and certain of the
Borrowers.

 

Fiscal Quarter - each successive period of thirteen weeks, commencing on the
first day of a Fiscal Year.

 

Fiscal Total Stores - in respect of any Fiscal Year, an amount of Stores equal
to the sum of (x) the aggregate number of Stores open on the first Business Day
of such Fiscal Year, plus (y) the aggregate number of Stores acquired or opened
during such Fiscal Year.

 

Fiscal Year - the fiscal year of Parent and Subsidiaries, for accounting and tax
purposes, which is the 52 or 53 week period ending on the Saturday nearer
January 31 of each calendar year (e.g., a reference to fiscal 2009 is a
reference to the fiscal year ended January 30, 2010).

 

Fixtures - as such term is defined in the UCC, now owned or hereafter acquired
by any Obligor located at a parcel of Real Estate subject to a Mortgage.

 

FLSA - the Fair Labor Standards Act of 1938, as amended.

 

Force Majeure - an event or force beyond the reasonable control of the Obligors,
including, without limitation, acts of God, acts of public enemy, terrorism,
wars, riots and civil disturbances, explosions, epidemics, natural disasters,
fires, vandalism, strikes, lock-outs or other labor difficulties, embargoes,
shortages or unavailability of materials, supplies, labor, equipment or systems,
or fuel or energy shortage.

 

Foreign Lender - any Lender that is(a) if the applicable Borrower is a U.S.
Person, a Lender that is not a U.S. Person, and (b) if the applicable Borrower
is not a U.S. Person, a Lender that is resident or organized under the laws of a
jurisdiction other than the laws of the United States, or any state or district
thereofthat in which such Borrower is resident for tax purposes.  For purposes
of this definition, the United States, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

 

Foreign Plan - any employee benefit plan or arrangement maintained or
contributed to by any Obligor or Subsidiary that is not subject to the laws of
the United States, or any employee benefit plan or arrangement mandated by a
government other than the United States for employees of any Obligor or
Subsidiary.

 

Foreign Subsidiary - a Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Internal Revenue CodeIRC, such that a guaranty by such
Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to
secure the Obligations would result in tax liability to

 

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the Obligors.

 

Fourth Amendment - the Fourth Amendment to Second Amended and Restated Loan and
Security Agreement, dated as of Fourth Amendment Closing Date, by and among the
Borrowers, the other Obligors, the Lenders, the Agent and the other parties
party thereto.

 

Fourth Amendment Closing Date - August 15, 2016.

 

Fronting Exposure. At - at any time there is a Defaulting Lender, (a) with
respect to the Issuing Bank, such Defaulting Lender’s Pro Rata share of the
outstanding LC Obligations other than LC Obligations as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof, and (b) with respect to the
Agent in its capacity as a lender of Swingline Loans, such Defaulting Lender’s
Pro Rata share of Swingline Loans other than Swingline Loans as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof.

 

Full Payment - with respect to any Obligations, (a) the full and indefeasible
cash payment thereof (other than contingent indemnification Obligations with
respect to which no claim has been asserted in writing), including any interest,
fees and other charges accruing during an Insolvency Proceeding (whether or not
allowed in the proceeding); and (b) if such Obligations are LC Obligations or
inchoate or contingent in nature (other than contingent indemnification
Obligations with respect to which no claim has been asserted in writing), Cash
Collateralization thereof (or delivery of a standby letter of credit acceptable
to Agent in its reasonable discretion, in the amount of required Cash
Collateral).  No Loans shall be deemed to have been paid in full until all
Commitments related to such Loans have expired or been terminated.

 

Fund - any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its activities.

 

GAAP — subject to Section 1.2, generally accepted accounting principles in the
United States in effect from time to time.

 

General Intangibles - as defined in the UCC, including choses in action, causes
of action, company or other business records, inventions, blueprints, designs,
patents, patent applications, trademarks, trademark applications, trade names,
trade secrets, service marks, goodwill, brand names, copyrights, registrations,
licenses, franchises, customer lists, permits, tax refund claims, computer
programs, operational manuals, internet addresses and domain names, insurance
refunds and premium rebates, all rights to indemnification, contract rights and
all other intangible Property of any kind.

 

Goods - as defined in the UCC.

 

Governmental Approvals - all authorizations, consents, Permit, approvals,
licenses and exemptions of, registrations and filings with, and required reports
to, all Governmental Authorities.

 

Governmental Authority - any federal, state, municipal, foreign or other
governmental department, agency, commission, board, bureau, court, tribunal,
instrumentality, political subdivision, or other entity or officer exercising
executive, legislative, judicial, regulatory or administrative functions for or
pertaining to any government or court, in each case whether associated with the
United States, a state, district or territory thereof, or a foreign entity or
government.

 

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Guarantor Payment - as defined in Section 5.10.3.

 

Guarantors - each of (a) the Parent, (b) The Bon-Ton Giftco, LLC, (c) Bonstores
Holdings One, LLC, (d) Bonstores Holdings Two, LLC, (e) each other Person who
guarantees payment or performance of any Obligations and (df) with respect to
Obligations owing by any Obligor or any Subsidiary of an Obligor (other than the
Borrowers) under any Hedging Agreement or Cash Management Services, the
Borrowers.

 

Guaranty - each guaranty agreement executed by a Guarantor in favor of Agent,
substantially in the form of Exhibit F hereto.

 

Hazardous Material - any substance, material or waste that is classified,
regulated or otherwise characterized under any Environmental Law as hazardous,
toxic, a contaminant or a pollutant or by other words of similar meaning or
regulatory effect, including petroleum or any fraction thereof, asbestos,
polychlorinated biphenyls and radioactive substances.

 

Hedging Agreement - an agreement relating to any swap, cap, floor, collar,
option, forward, cross right or obligation, or combination thereof or similar
transaction, with respect to interest rate, foreign exchange, currency,
commodity, credit or equity risk.

 

Increase Effective Date - as defined in Section 2.4.1.

 

Increasing Lender —- as defined in Section 2.4.1.

 

Indemnified Taxes - (a) Taxes other than Excluded Taxes, imposed on or with
respect to any payment made by or on account of any obligation of any Loan Party
under any Loan Document and (b) to the extent not otherwise described in clause
(a), Other Taxes.

 

Indemnitees - Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees
and Bank of America Indemnitees.

 

Insolvency Proceeding - any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.

 

Instrument - as defined in the UCC.

 

Intellectual Property - all intellectual and similar Property of a Person,
including inventions, designs, patents, patent applications, copyrights,
trademarks, service marks, trade names, trade secrets, confidential or
proprietary information, customer lists, know-how, software and databases; all
embodiments or fixations thereof and all related documentation, registrations
and franchises; all books and records describing or used in connection with the
foregoing; and all licenses or other rights to use any of the foregoing.

 

Intellectual Property Claim - any claim or assertion (whether in writing, by
suit or otherwise) that the Parent or any Subsidiary’s ownership, use,
marketing, sale or distribution of any Inventory, Equipment, Intellectual
Property or other Property violates another Person’s Intellectual Property.

 

Interest Period - as defined in Section 3.1.3.

 

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Inventory - as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in such Person’s
business (but excluding Equipment).

 

Inventory Reserve - reserves, established by Agent, based on the most recent
appraisal of Borrowers’ Inventory performed by an appraiser and on terms
reasonably satisfactory to Agent and the most recent commercial finance exam of
the Borrowers’ books and records performed by an examiner and on terms
reasonably satisfactory to Agent, to reflect factors that may negatively impact
the Value of Inventory, including change in salability, obsolescence,
seasonality, theft, shrinkage, damage, customer credit liabilities, imbalance,
change in composition or mix, markdowns, vendor chargebacks and with respect to
Eligible Inventory that has been subject to a Letter of Credit for a period in
excess of ninety (90) days.

 

Investment - any (a) acquisition of all or substantially all assets of, or any
line of business or division of, a Person; (b) acquisition of record or
beneficial ownership of any Equity InterestsCapital Stock of a Person; (c) any
advance or capital contribution to, guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
guarantees Debt of such other Person, or (d) other investment in a Person.  For
purposes of the Loan Documents, the outstanding amount of any Investment made by
any Person at any time shall be calculated as the excess of the initial amount
of such Investment made by such Person (including the fair market value of all
property transferred by such Person as part of such Investment) over all returns
of principal or capital thereof received in cash on or prior to such time by
such Person (including all cash dividends, cash distributions and cash
repayments of Debt received by such Person).

 

Investment Property - as defined in the UCC.

 

IRC — means the Internal Revenue Code of 1986, as amended, and any successor
thereto.

 

ISP - with respect to any Letter of Credit, the “International Standby Practices
1998” published by the Institute of International Banking Law & Practice, Inc.
(or such later version thereof as may be in effect at the time of issuance).

 

Issuing Bank - (a) Bank of America or an Affiliate of Bank of America, Wells
Fargo Bank, N.A. or an Affiliate of Wells Fargo Bank, N.A. or any other Lender
or an Affiliate of such Lender, and any other Person designated by a Lender (and
acceptable to the Borrower Agent), in each case, in its capacity as issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder and (b) with respect to the Letters of Credit issued by such issuer
prior to the Closing Date and described on Schedule 2.3.2, and with respect to
any other Letters of Credit issued by such Issuing Bank.  At any time there is
more than one Issuing Bank, any singular references to the Issuing Bank shall
mean any Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the
applicable Letter of Credit, or all Issuing Banks, as the context may require.

 

Issuing Bank Indemnitees — each Issuing Bank and its officers, directors,
employees, Affiliates, agents, advisors and attorneys.

 

Joint Lead Arrangers — as defined in the Preamble.

 

Junior Debt — the Debt permitted by Section 10.2.1(k) and any Refinancing Debt
thereof which satisfies the Refinancing Conditions.

 

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Junior Debt Documents — collectively, the documents (including, without
limitation, the Junior Debt Intercreditor Agreement, all guaranties and security
documents), agreements, filings and certificates entered into by the Obligors or
their Subsidiaries from time to time in favor of the holders of the Junior Debt,
in form and substance reasonably satisfactory to the Agent, as any of the same
may be amended, restated, supplemented, modified, renewed, replaced or
Refinanced in whole or in part from time to time, and any other agreement
extending the maturity of, consolidating, otherwise restructuring, renewing,
replacing or Refinancing all or any portion of the Junior Debt, and whether by
the same or any other agent, lender or group of lenders and whether or not
increasing the amount of Junior Debt that may be incurred thereunder, in each
case in a manner not inconsistent with this Loan Agreement.

 

Junior Debt Intercreditor Agreement — an intercreditor agreement reasonably
satisfactory to the Agent and the Co-Collateral Agents to be entered into
between the Agent and the Junior Lien Agent, as the same may be amended,
restated, supplemented, modified, renewed or replaced in whole or in part from
time to time, in each case in a manner not inconsistent with the Loan Documents
and with the consent of the Co-Collateral Agents.

 

Junior Lien Affiliate — with respect to any Junior Lien Lender or the Junior
Lien Agent, another Person who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Junior Lien Lender or the Junior Lien Agent, as the case may be.

 

Junior Lien Agent — the administrative and/or collateral agent or any lender
serving in such capacity, as applicable, for any Junior Debt secured by Junior
Liens under the Junior Debt Documents, and its successors and permitted assigns
in such capacity.

 

Junior Liens — Liens on assets of the Obligors that are subordinated in all
respects to the Liens securing the Obligations pursuant to the Junior Debt
Intercreditor Agreement (it being understood that Junior Liens are not required
to be pari passu with other Junior Liens, and that Debt secured by Junior Liens
may have Liens that are senior in priority to, or pari passu with, or junior in
priority to, other Liens constituting Junior Liens).

 

Lancaster - as defined in Section 1.7.

 

Landlord Lien State - (i) the states of Washington, Virginia, Pennsylvania and
(ii) such other state(s) or jurisdictions in which a landlord’s claim for rent
or other obligations has priority over the Lien of Agent in any of the
Collateral.

 

Large Inventory Location - any distribution center (including each Distribution
Center), warehouse, cross-docking station or storage facility at which Inventory
is located.

 

LC Application - an application by Borrower Agent to Issuing Bank for issuance
of a Letter of Credit, in form and substance reasonably satisfactory to Issuing
Bank.

 

LC Conditions - the following conditions necessary for issuance of a Letter of
Credit: (a) each of the conditions set forth in Section 6; (b) after giving
effect to such issuance, total LC Obligations do not exceed the Letter of Credit
Subline, no Tranche A Overadvance or Tranche A-1 Overadvance exists and, if no
Tranche A Revolver Loans are outstanding, the LC Obligations do not exceed the
result of (i) the Tranche A Borrowing Base minus (ii) the Tranche A-1
Utilization Amount; (c) the expiration date of such Letter of Credit is (i) no
more than 365 days from issuance, in the case of standby Letters of Credit,
(ii) no more than 180 days from issuance, in the case of documentary Letters of
Credit, and (iii) at least 5 Business Dayson or prior to the TerminationLetter
of Credit Expiration Date; (d) the Letter of Credit and payments thereunder are
denominated in

 

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Dollars; (e) the form of the proposed Letter of Credit is reasonably
satisfactory to Agent and Issuing Bank in their discretion and (f) the Issuing
Bank’s compliance with the requirements of Section 2.3.1(j).

 

LC Documents - all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by any Borrower or any other Person to Issuing
Bank or Agent in connection with issuance, amendment or renewal of, or payment
under, any Letter of Credit.

 

LC Guaranty - a guaranty issued by an Issuing Bank to another Person in
connection  with the issuance by such other Person of Letters of Credit
hereunder.

 

LC Obligations - the sum (without duplication) of (a) all amounts owing by
Borrowers for any drawings under Letters of Credit (including in respect of any
payment made by Issuing Bank under any LC Guaranty and any deferred payment or
acceptance liabilities in respect of such Letter of Credit); (b) the aggregate
undrawn amount of all outstanding Letters of Credit; and (c) all fees and other
amounts owing with respect to Letters of Credit.

 

LC Request - a request for issuance of a Letter of Credit, to be provided by
Borrower Agent to Issuing Bank, in form reasonably satisfactory to Agent and
Issuing Bank.

 

Lender Indemnitees - Lenders and their officers, directors, employees,
Affiliates, agents, advisors and attorneys.

 

Lenders - as defined in the preamble to this Loan Agreement, including the
Tranche A Lenders, the Tranche A-1 Lenders, Agent in its capacity as a provider
of Swingline Loans and any other Person who hereafter becomes a “Lender”
pursuant to an Assignment and Assumption Agreement.

 

Lending Office - as to any Lender, the office or offices of such Lender
described as such in such Lender’s administrative questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower Agent
and the Agent, which office may include any Affiliate of such Lender or any
domestic or foreign branch of such Lender or such Affiliate. Unless the context
otherwise requires each reference to a Lender shall include its applicable
Lending Office.

 

Letter of Credit - any standby or documentary letter of credit issued by Issuing
Bank for the account of a Borrower, or any indemnity, guarantee, exposure
transmittal memorandum or similar form of credit support issued by Agent or
Issuing Bank for the benefit of a Borrower.

 

Letter of Credit Expiration Date - the date that is five (5) Business Days prior
to the Tranche A Termination Date then in effect (or, if such day is not a
Business Day, the next preceding Business Day).

 

Letter-of-Credit Right - as defined in the UCC.

 

Letter of Credit Subline - $150,000,000.  The Letter of Credit Subline is part
of, and not in addition to, the Tranche A Revolver CommitmentCommitments.

 

LIBOR Loan - each set of LIBOR Tranche A Revolver Loans or LIBOR Tranche A-1
Revolver Loans having a common length and commencement of Interest Period.

 

LIBOR Tranche A Revolver Loan - a Tranche A Revolver Loan that bears interest at
Adjusted LIBOR plus the Applicable Margin for LIBOR Tranche A Revolver Loans.

 

LIBOR Tranche A-1 Revolver Loan - a Tranche A-1 Revolver Loan that bears
interest at

 

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Adjusted LIBOR plus the Applicable Margin for LIBOR Tranche A-1 Revolver Loans.

 

Liabilities — all claims, actions, suits, judgments, damages, losses, liability,
obligations, responsibilities, fines, penalties, sanctions, costs, fees, taxes,
commissions, charges, disbursements, and expenses, in each case of any kind or
nature (including interest accrued thereon or as a result thereof and fees,
charges and disbursements of financial, legal and other advisors and
consultants), whether joint or several, whether or not indirect, contingent,
consequential, actual, punitive, treble or otherwise.

 

License - any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.

 

Licensor - any Person from whom an Obligor obtains the right to use any
Intellectual Property.

 

Lien - any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, pledges, hypothecations,
statutory trusts, reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Property.

 

Lien Waiver - an agreement, in form and substance reasonably satisfactory to
Agent, by which (a) for any material Collateral located on leased premises, the
lessor waives or subordinates any Lien it may have on the Collateral, and agrees
to permit Agent to enter upon the premises and remove the Collateral or to use
the premises to store or dispose of the Collateral; (b) for any Collateral held
by a warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any
Collateral held by a repairman, mechanic or bailee, such Person acknowledges
Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and
agrees to deliver the Collateral to Agent upon request; and (d) for any
Collateral subject to a Licensor’s Intellectual Property rights, the Licensor
grants to Agent the right, vis-à-vis such Licensor, to enforce Agent’s Liens
with respect to the Collateral, including the right to dispose of it with the
benefit of the Intellectual Property, whether or not a default exists under any
applicable License.

 

Loan - a Tranche A Revolver Loan or Tranche A-1 Revolver Loan.

 

Loan Account - the loan account established by each Lender on its books pursuant
to Section 5.7.

 

Loan Agreement — as defined in the Preamble.

 

Loan Documents - this Loan Agreement, Other Agreements and Security Documents.

 

Loan Year - each calendar year commencing on the Closing Date and on each
anniversary of the Closing Date.

 

Margin Stock - as defined in Regulation U of the Board of Governors.

 

Master Lease Agreement - collectively, (i) Lease Agreement dated as of March 6,
2006 between Bonstores Realty One, LLC, a Delaware limited liability company, as
landlord, and Bon-Ton, as successor by merger to Herberger’s Department Stores,
LLC, a Minnesota limited liability

 

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company, as tenant, as it may be amended, restated, supplemented, modified,
renewed or replaced in whole or in part from time to time in accordance with the
Loan Documents, (ii) Master Lease Agreement dated as of March 6, 2006 between
Bonstores Realty One, LLC, a Delaware limited liability company, as landlord,
and Carson Pirie Scott II, Inc., formerly known as McRae’s, Inc., a Mississippi
corporation, as tenant, as it may be amended, restated, supplemented, modified,
renewed or replaced in whole or in part from time to time in accordance with the
Loan Documents, (iii) Lease Agreement dated as of March 6, 2006 between
Bonstores Realty One, LLC, a Delaware limited liability company, as landlord,
and McRIL, LLC, a Virginia limited liability company, as tenant, as it may be
amended, restated, supplemented, modified, renewed or replaced in whole or in
part from time to time in accordance with the Loan Documents, (iv) Master Lease
Agreement dated as of March 6, 2006 between Bonstores Realty One, LLC, a
Delaware limited liability company, as landlord, and Bon-Ton, as successor by
merger to Parisian, Inc., an Alabama corporation, as tenant, as it may be
amended, restated, supplemented, modified, renewed or replaced in whole or in
part from time to time in accordance with the Loan Documents,  (v) Lease
Agreement dated as of March 6, 2006 currently between Bonstores Realty One, LLC,
a Delaware limited liability company, as landlord, and Bon-Ton
Distribution, Inc., formerly known as Saks Distribution Centers, Inc., an
Illinois corporation, as tenant, as it may be amended, restated, supplemented,
modified, renewed or replaced in whole or in part from time to time in
accordance with the Loan Documents, (vi) Master Lease Agreement dated as of
March 6, 2006 between Bonstores Realty One, LLC, a Delaware limited liability
company, as landlord, and The Elder-Beerman Stores, Corp., an Ohio corporation,
as tenant, as it may be amended, restated, supplemented, modified, renewed or
replaced in whole or in part from time to time in accordance with the Loan
Documents, (vii) Master Lease Agreement dated as of March 6, 2006 between
Bonstores Realty Two, LLC, a Delaware limited liability company, as landlord,
and Carson Pirie Scott II, Inc., formerly known as McRae’s, Inc., a Mississippi
corporation, as tenant, as it may be amended, restated, supplemented, modified,
renewed or replaced in whole or in part from time to time in accordance with the
Loan Documents, (viii) Master Lease Agreement dated as of March 6, 2006 between
Bonstores Realty Two, LLC, a Delaware limited liability company, as landlord,
and McRIL, LLC, a Virginia limited liability company, as tenant, as it may be
amended, restated, supplemented, modified, renewed or replaced in whole or in
part from time to time in accordance with the Loan Documents, (ix) Master Lease
Agreement dated as of March 6, 2006 between Bonstores Realty Two, LLC, a
Delaware limited liability company, as landlord, and Bon-Ton, as successor by
merger to Parisian, Inc., an Alabama corporation, as tenant, as it may be
amended, restated, supplemented, modified, renewed or replaced in whole or in
part from time to time in accordance with the Loan Documents and (x) such other
leases and subleases as may be entered into between an SPEeither BR1LLC or
BR2LLC and an Obligor from time to time.

 

Material Adverse Effect - the effect of any event or circumstance occurring
after January 30, 2010 (except for general economic or political conditions or
conditions generally applicable to the department store industry, or terrorist
events or wars) that, taken as a whole, has or could be reasonably expected to
have a material adverse effect on: (a) the business, operations, liabilities
(actual or contingent), Properties, or financial condition of the Obligors and
their Subsidiaries considered as a whole, or the value of the Collateral, taken
as a whole, the enforceability of any Loan Documents, or on the validity or
priority of Agent’s Liens on any Collateral; (b) the ability of the Obligors
taken as a whole to perform any obligations under the Loan Documents, including
repayment of any Obligations; or (c) the rights or remedies of Agent or any
Lender to enforce or collect the Obligations or to realize upon the Collateral.

 

Material Contract - any agreement or arrangement to which Parent or a Subsidiary
is party (other than the Loan Documents) (a) that is deemed to be a material
contract under the Securities Exchange Act of 1934, (b) for which breach,
termination, nonperformance or failure to renew could reasonably be expected to
have a Material Adverse Effect, or (c) that relates to the Mortgage Loan Debt,
the Senior Note Debt, the Junior Debt, the Convertible Note Debt or other Debt
in an

 

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aggregate principal amount of $5,000,000 or more.

 

MLPFS — Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

Moody’s - Moody’s Investors Service, Inc., and its successors.

 

Mortgage - each mortgage, deed of trust or deed to secure debt pursuant to which
an Obligor grants to Agent, for the benefit of Secured Parties, Liens upon the
Real Estate owned by such Obligor, as security for the Obligations.

 

Mortgage Intercreditor Agreement - the Intercreditor Agreement, dated as of
March 6, 2006, by and among the Mortgage Loan Lender and Bank of America, in its
capacity as the administrative agent under the Existing Credit Agreement, as the
same may be amended, restated, supplemented, modified, renewed or replaced in
whole or in part from time to time, in each case in a manner not inconsistent
with the Loan Documents and with the consent of the Co-Collateral Agents.

 

Mortgage Loan Debt - (a) the Debt of SPEs in an aggregate principal amount not
to exceed $260,000,000, represented by the Mortgage Loan Debt Documents, (b) the
Debt evidenced by each guaranty of a Master Lease Agreement, executed by the
Parent in favor of the Mortgage Loan Lender, as in effect on the date hereof and
as may be further amended, restated, supplemented, modified, renewed or replaced
in whole or in part from time to time in accordance with the Loan Documents,
(c) the Debt evidenced by each Exceptions to Non-Recourse Guaranty, entered into
on the March 6, 2006, by each of Bonstores Realty One, LLC and Bonstores Realty
Two, LLC in favor of the Mortgage Loan Lender, as in effect on the date hereof
and as may be further amended, restated, supplemented, modified, renewed or
replaced in whole or in part from time to time in accordance with the Loan
Documents and (d) any Refinancing Debt in respect of any of the foregoing which
satisfies the Refinancing Conditions.

 

Mortgage Loan Debt Documents - the (a) Loan Agreement (the “Bonstores One
Agreement”), dated as of March 6, 2006, as amended on May 4, 2006, and as it may
be further amended, restated, supplemented, modified, renewed or replaced in
whole or in part from time to time in accordance with the Loan Documents,
between Bonstores Realty One, LLC and the Mortgage Loan Lender, (b) the Loan
Agreement (the “Bonstores Two Agreement”), dated as of March 6, 2006, as amended
on May 4, 2006, and as it may be further amended, restated, supplemented,
modified, renewed or replaced in whole or in part from time to time in
accordance with the Loan Documents, between Bonstores Realty Two, LLC and the
Mortgage Loan Lender, (c) each of the Loan Documents (as defined in the
Bonstores One Agreement), (d) each of the Loan Documents (as defined in the
Bonstores Two Agreement), (e) each Master Lease Agreement, (f) each guaranty of
a Master Lease Agreement by the Parent in favor of the Mortgage Loan Lender, and
(g) any other agreement extending the maturity of, consolidating, otherwise
renewing, replacing or Refinancing all or any portion of the Mortgage Loan Debt
and whether by the same or any other agent, lender or group of lenders and
whether or not increasing the amount of Mortgage Loan Debt that may be incurred
under the Mortgage Loan Debt Documents, in each case in a manner not
inconsistent with the Loan Documents.

 

Mortgage Loan Lender - Bank of America, N.A., in its capacity as lender under
the Mortgage Loan Debt Documents, and its successors and permitted assigns in
such capacity, and any other lender or group of lenders under the Mortgage Loan
Debt Documents.

 

Multiemployer Plan - any employee benefit plan or arrangement described in
Section 4001(a)(3) of ERISA that is maintained or contributed to by any Obligor
or Subsidiary.

 

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Net Proceeds - with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by Parent or a Subsidiary
in cash from such disposition, net of (a) reasonable and customary costs and
expenses actually incurred in connection therewith, including legal fees and
sales commissions; (b) amounts applied to repayment of Debt secured by a
Permitted Lien; (c) taxes due as a result of, or in connection with, such Asset
Disposition; and (d) reserves for indemnities, until such reserves are no longer
needed.

 

Notes - each Tranche A Revolver Note, Tranche A-1 Revolver Note or other
promissory note executed by a Borrower to evidence any Obligations.

 

Notice of Borrowing - a Notice of Borrowing to be provided by Borrower Agent to
request the funding of a Borrowing of Loans, in form reasonably satisfactory to
Agent.

 

Notice of Conversion/Continuation - a Notice of Conversion/Continuation to be
provided by Borrower Agent to request a conversion or continuation of any Loans
as LIBOR Loans, in form reasonably satisfactory to Agent.

 

NRV Percentage - the net orderly liquidation value of Inventory of each
Borrower, expressed as a percentage (which shall be adjusted on a monthly
basis), expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of Borrowers’ Inventory performed by an appraiser and
on terms reasonably satisfactory to Agent.

 

Obligations - all (a) principal of and premium (including, without limitation,
the Tranche A-1 Prepayment Premium), if any, on the Loans, (b) LC Obligations
and other obligations of Obligors with respect to Letters of Credit,
(c) interest, expenses, fees and other sums payable by Obligors under Loan
Documents, (d) obligations of Obligors under any indemnity for Claims,
(e) Extraordinary Expenses, (f) Bank Product Debt, and (g) other Debts,
obligations and liabilities of any kind owing by Obligors pursuant to the Loan
Documents or in connection with any Bank Products, whether now existing or
hereafter arising, whether evidenced by a note or other writing, whether or not
allowed in any Insolvency Proceeding, whether arising from an extension of
credit, issuance of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise, and whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or several;
provided that the “Obligations” shall exclude any Excluded Swap Obligations.

 

Obligor - each Borrower, Guarantor, or other Person that is liable for payment
of any Obligations or that has granted a Lien in favor of Agent on its assets to
secure any Obligations.

 

Ordinary Course of Business - the ordinary course of business of Parent or any
Subsidiary, consistent with past practices and undertaken in good faith.

 

Organic Documents - with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust agreement, or similar agreement or instrument governing the
formation or operation of such Person.

 

OSHA - the Occupational Safety and Hazard Act of 1970, as amended.

 

Other Agreement - each Note, Guaranty, LC Document, LC Guaranty, Fee Letter,
Lien Waiver, Related Real Estate Document, Borrowing Base Certificate,
Compliance Certificate, the MortgageJunior Debt Intercreditor Agreement, the
Senior Note Intercreditor Agreement, the Perfection Certificate, the
Post-Closing Agreement, financial statement or report delivered

 

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hereunder, or other document, instrument or agreement (other than this Loan
Agreement or a Security Document) now or hereafter delivered by an Obligor or
other Person to Agent or a Lender in connection with any transactions relating
hereto.

 

Other Connection Taxes - with respect to any Recipient, Taxes imposed as a
result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Documents).

 

Other Taxes - all present or future stamp, court or documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect to
any Loan Document, except any such Taxes that are Other Connection Taxes imposed
with respect to an assignment (other than an assignment made pursuant to
Section 3.6).

 

Overadvance Loan - a Base Rate Tranche A Revolver Loan made or Letter of Credit
issued, extended or renewed when a Tranche A Overadvance exists or is caused by
the funding of a Tranche A Revolver Loan or the issuance of a Letter of Credit.

 

Parent - The Bon-Ton Stores, Inc., a Pennsylvania corporation and parent company
of Bon-Ton.

 

Participant — as defined in Section 13.3.1.

 

Passive Company - collectively, The Bon-Ton Properties- Eastview G.P., Inc., The
Bon-Ton Properties- Marketplace G.P., Inc., The Bon-Ton Properties- Greece Ridge
G.P., Inc., The Bon-Ton Properties- Eastview L.P., The Bon-Ton Properties-
Marketplace L.P., and The Bon-Ton Properties- Greece Ridge L.P.

 

Participant Register - as defined in Section 13.3.1.

 

Patriot Act - the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
No. 107-56, 115 Stat. 272 (2001).

 

Payment Intangible - as defined in the UCC.

 

Payment Item - each check, draft or other item of payment payable to an Obligor,
including those constituting proceeds of any Collateral.

 

Perfection Certificate - that certain Perfection Certificate dated as of the
date hereof, and delivered by the Obligors to Agent.

 

Permit - with respect to any Person, any permit, approval, authorization,
license, registration, certificate, concession, grant, franchise, variance or
permission from, and any other Contractual Obligations with, any Governmental
Authority, in each case whether or not having the force of law and applicable to
or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

 

Permitted Acquisition - any acquisition by any Obligor, whether by purchase,
merger or otherwise, of all or substantially all of the assets of, the Equity
InterestsCapital Stock of, or a

 

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business line or unit or a division of, any Person; provided that:

 

(i)            immediately prior to, and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing or would result
therefrom;

 

(ii)           all transactions in connection therewith shall be consummated, in
all material respects, in accordance with all applicable laws and in conformity
with all applicable Governmental Approvals;

 

(iii)          such acquisition shall be consensual and shall have been approved
by the Board of Directors of such Person;

 

(iv)          in the case of the acquisition of Equity InterestsCapital Stock,
the issuer of such Equity InterestsCapital Stock shall become a Subsidiary of
the applicable Obligor immediately after consummation of the applicable
transaction, and such Obligor shall have taken, or caused to be taken, as of the
date such Person becomes a Subsidiary of such Obligor, the actions set forth in
Section 10.1.9;

 

(v)           Excess Availability on the date of the making of such acquisition
on a pro forma basis after giving effect to such acquisition, and projected
Excess Availability on a pro forma basis for the upcoming six month period
(after giving effect to such acquisition), measured as of the last day of each
fiscal month during such six month period, is, in each case, greater than or
equal to 15% of the lesser of (A) the aggregate Commitments as of the date of
such acquisition and last day of each fiscal month during such six month period
and (B) the Aggregate Borrowing Base as of the date of such acquisition and the
last day of each fiscal month during such six month period;

 

(vi)          except if an acquisition is made within 180 days of an equity
issuance and solely with the cash proceeds in an aggregate amount not to exceed
the Available Basket Amount then in effect, as of the monthly fiscal period most
recently then ended, the Consolidated Fixed Charge Coverage Ratio (on a pro
forma trailing 12 fiscal month basis, giving effect to the making of such
acquisition, and any Borrowings made in connection therewith, determined as
though such acquisition and such Borrowings occurred on the first day of the 12
fiscal month period ended prior to such acquisition) is greater than or equal to
1.00 to 1.00; provided that the foregoing shall not be applicable in the event
that Excess Availability on the date of the making of such acquisition on a pro
forma basis after giving effect to such acquisition, and projected Excess
Availability on a pro forma basis for the upcoming six month period (after
giving effect to such acquisition), measured as of the last day of each fiscal
month during such six month period, is, in each case, greater than or equal to
30% of the lesser of (A) the aggregate Commitments as of the date of such
acquisition and last day of each fiscal month during such six month period and
(B) the Aggregate Borrowing Base as of the date of such acquisition and the last
day of each fiscal month during such six month period;

 

(vii)         any Person or assets or division as acquired in accordance
herewith shall be in the same business or lines of business in which the
Borrowers and/or their Subsidiaries are engaged as of the Closing Date or a line
of business reasonably related or incidental thereto; and

 

(viii)        the Borrower Agent shall have delivered to Agent not less than
then (10) days prior to the consummation of such acquisition a certificate, in
form and substance reasonably satisfactory to Agent, from a Senior Officer of
the Borrower Agent certifying that the conditions set forth in clauses
(i) through (vii) above are satisfied (which certificate shall attach supporting
projections, information and calculations with respect to the requirements set
forth in clause (v) and (vi) above (all based on projections of the financial
performance of the Obligors believed to be fair and reasonable at the time
made)).

 

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Permitted Asset Disposition - as long as no Default or Event of Default exists
or would result therefrom, and, if so required pursuant to Section 5.2, all Net
Proceeds are remitted to Agent for application to the Obligations pursuant to
Section 5.5, an Asset Disposition that is (a) a sale of Inventory or Equipment
in the Ordinary Course of Business; (b) a disposition of Equipment so long as
(x) the Equipment subject to such disposition has a fair market value or book
value (whichever is more) of $1,000,000 or less and (y) all Equipment disposed
of pursuant to this clause (b) in the aggregate during any Fiscal Year of the
Parent has a fair market or book value (whichever is more) of $5,000,000 or
less, (c) a disposition of Equipment or Inventory that is obsolete,
unmerchantable or otherwise unsalable in the Ordinary Course of Business,
(d) the licensing of Intellectual Property to third Persons on reasonable and
customary terms in the ordinary course of business consistent with past
practice; provided that such licensing does not materially interfere with the
business of the Parent or any other Obligor, (e) the sale or other disposition
of Cash Equivalents, (f) dispositions of accounts receivable (other than Credit
Card Receivables) in connection with the compromise, settlement or collection
thereof in the Ordinary Course of Business or in bankruptcy or similar
proceedings (it being understood that customary chargebacks and offsets,
discounts, allowances and credits by Credit Card Processors made in the ordinary
course of business shall not constitute a disposition of a Credit Card
Receivable for the purposes of this clause (f)), (g) any Permitted Distribution,
(h) any Investment which is not a Restricted Investment, (i) the unwinding of
any Hedging Agreements, (j) subleases entered into in the ordinary course of
business of any Obligor, (k) the disposition of any Real Estate which, pursuant
to Section 7.3, is not required to be subject to a Mortgage hereunder, (l) the
disposition of any Real Estate which is subject to a Mortgage hereunder, so long
as (x) no Default or Event of Default has occurred and is continuing or would
result therefrom and (y) the Obligors receive, at the consummation of such Asset
Disposition, gross proceeds, in cash, from such sale in an amount not less than
70% of the appraised valueAppraised Value of such Real Estate, as set forth in
the most recent appraisal provided to the Agent, (m) reserved, (n) reserved,
(o) a Permitted Store Closure, (p) a sale or other disposition of any property
in connection with any transaction covered by, but not prohibited by,
Section 10.2.23, (q) a disposition of assets acquired in a Permitted Acquisition
so long as (i) such disposition is consummated within 180 days after the
consummation of such Permitted Acquisition and (ii) such assets do not
constitute Inventory or Accounts; (r) an abandonment of Intellectual Property
that is obsolete or otherwise uneconomic in the Ordinary Course of Business and
(s) a transfer of condemned property as a result of the exercise of “eminent
domain” or other similar policies to the respective Governmental Authority or
agency that has condemned the same (whether by deed in lieu of condemnation or
otherwise), and transfers of properties that have been subject to a casualty to
the respective insurer of such property as part of an insurance settlement.

 

Permitted Business - any business conducted or proposed to be conducted by the
Parent and the other Obligors on the Closing Date and other businesses
reasonably related or ancillary thereto.

 

Permitted Contingent Obligations - Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder;
(c) existing on the Closing Date, and any extension or renewal thereof that does
not increase the amount of such Contingent Obligation when extended or renewed;
(d) incurred in the Ordinary Course of Business with respect to surety, appeal
or performance bonds, or other similar obligations; (e) arising from customary
indemnification obligations in favor of purchasers in connection with
dispositions of Equipment permitted hereunder; (f) arising under the Loan
Documents; or (g) in an aggregate amount of $3,000,000 or less at any time.

 

Permitted Distribution - (a) a dividend by the Parent or redemption or
repurchase of equity securities of the Parent so long as (i) no Default or Event
of Default shall have occurred and be continuing or would result after giving
effect to any such Distribution, (ii) Excess Availability on

 

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the date of the making of such Distribution on a pro forma basis after giving
effect to such Distribution, and projected Excess Availability on a pro forma
basis for the upcoming six month period (after giving effect to such
Distribution), measured as of the last day of each fiscal month during such six
month period, is, in each case, greater than or equal to 17.5% of the lesser of
(A) the aggregate Commitments as of the date of such Distribution and last day
of each fiscal month during such six month period and (B) the Aggregate
Borrowing Base as of the date of such Distribution and the last day of each
fiscal month during such six month period, (iii) as of the monthly fiscal period
most recently then ended, the Consolidated Fixed Charge Coverage Ratio (on a pro
forma trailing 12 fiscal month basis, giving effect to the making of such
Distribution, and any Borrowings made in connection therewith, determined as
though such Distribution and such Borrowings occurred on the first day of the
twelve fiscal month period ended prior to such Distribution) is greater than or
equal to 1.10 to 1.00; provided that this clause (iii) shall not be applicable
in the event that Excess Availability on the date of the making of such
Distribution on a pro forma basis after giving effect to such Distribution, and
projected Excess Availability on a pro forma basis for the upcoming six month
period (after giving effect to such Distribution), measured as of the last day
of each fiscal month during such six month period, is, in each case, greater
than or equal to 35% of the lesser of (x) the aggregate Commitments as of the
date of such Distribution and last day of each fiscal month during such six
month period and (y) the Aggregate Borrowing Base as of the date of such
Distribution and the last day of each fiscal month during such six month period
and (iv) the Borrowers shall have provided the Agent with a certificate not less
than ten days prior to the making of such Distribution executed by a Senior
Officer of the Borrower Agent, evidencing compliance, on a pro forma basis,
after giving effect to such Distribution, with the requirements set forth in
clauses (i) through (iii) above (which certificate shall attach supporting
projections, information and calculations with respect to the requirements set
forth in clauses (ii) and (iii) above (all based on projections of the financial
performance of the Obligors believed to be fair and reasonable at the time
made)), (b) dividends by the Parent or redemptions or repurchases of equity
securities of the Parent in an aggregate amount not to exceed (x) $10,000,000 in
any Fiscal Year of the Parent or (y) $30,000,000 during the term of this Loan
Agreement, (c) the purchase, repurchase, redemption, acquisition or retirement
for value of any capital stockCapital Stock of the Parent upon the exercise of
warrants, options or similar rights if such capital stockCapital Stock
constitutes all or a portion of the exercise price or is surrendered in
connection with satisfying any federal or state income tax obligation incurred
in connection with such exercise; provided that no cash payment in respect of
such purchase, repurchase, redemption, acquisition, retirement or exercise shall
be made by any Obligor, (d) so long as no Default has occurred and is continuing
or would result therefrom, payments to Parent to permit Parent, and which are
used by Parent, to redeem equity interestsCapital Stock of Parent held by any
current or former employee, officer, director or consultant of Parent (or any
other Obligor) or their respective estates, spouses, former spouses or family
members pursuant to the terms of any employee equity subscription agreement,
stock option agreement or similar agreement entered into in the ordinary course
of business; provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired equity interestsCapital Stock in any Fiscal Year
will not exceed $5,000,000, (e) a repurchase of capital stockCapital Stock
deemed to occur upon the cashless exercise of stock options and warrants, and
(f) distributions to Parent to enable Parent to pay, and which are used by
Parent to pay, customary and reasonable costs and expenses of an offering of
securities of Parent so long as the Parent reimburses the applicable Obligor
promptly upon the consummation of such offering.

 

Permitted Holders - (a) Tim Grumbacher and his immediate family members (as
defined by the NASDAQ listing requirements) or the spouses and former spouses
(including widows and widowers), heirs or lineal descendants of any of the
foregoing; (b) an estate, trust (including a revocable trust, declaration of
trust or a voting trust), guardianship, other legal representative relationship
or custodianship for the primary benefit of one or more individuals described in
clause (a) above or controlled by one or more individuals described in clause
(a) above; (c) a corporation, partnership, limited liability company,
foundation, charitable organization or other entity if a

 

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majority of the voting power and, if applicable, a majority of the value of the
equity ownership of such corporation, partnership, limited liability company,
foundation, charitable organization or other entity is directly or indirectly
owned by or for the primary benefit of one or more individuals or entities
described in clauses (a) or (b) above; (d) a corporation, partnership, limited
liability company, foundation, charitable organization or other entity
controlled directly or indirectly by one or more individuals or entities
described in clauses (a), (b) or (c) above; and (e) any “person” (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934, or any successor provision) acting on behalf of the Parent as
underwriter pursuant to an offering that is temporarily holding securities in
connection with such offering.

 

Permitted Lien - as defined in Section 10.2.2.

 

Permitted Purchase Money Debt - Purchase Money Debt of Parent and Subsidiaries
that is unsecured or secured only by a Purchase Money Lien, as long as the
aggregate principal amount does not exceed $30,000,000 at any time.

 

Permitted Store Closures - the closure or liquidation of a Store by the
Borrowers or any Subsidiary; provided that (a) neither the Borrowers nor any of
their Subsidiaries shall close or liquidate, as of any date of determination, in
any Fiscal Year (x) Stores representing more than 10% of the Fiscal Total Stores
for such Fiscal Year (this clause (x) determined by the result of (i) the sum of
(A) the number of Stores closed or liquidated during such Fiscal Year, plus
(B) the number of Stores that Borrowers or its Subsidiaries intend to close on
or about such date of determination during such Fiscal Year, divided by
(ii) Fiscal Total Stores for such Fiscal Year) and (y) Stores representing more
than 25% of the Total Stores (this clause (y) determined by the result of
(i) the sum of (A) the number of Stores closed or liquidated since the Closing
Date plus (B) the number of Stores that the Borrowers or its Subsidiaries intend
to close on or about such date of determination, divided by (ii) Total Stores)
and (b) if the number of Stores that the Borrowers or their Subsidiaries intend
to close or liquidate on any date of determination in a Fiscal Year when
aggregated with the number of Stores closed or liquidated by the Borrowers or
their Subsidiaries prior to such date within the same Fiscal Year exceed twenty
(20) Stores, then all such Stores that are being closed or liquidated on such
date plus any Stores closed or liquidated on any date thereafter in the same
Fiscal Year shall be closed or liquidated by a liquidator or under the
supervision of a consultant (such liquidator or consultant shall be reasonably
acceptable to the Agent) and pursuant to liquidation or consulting arrangements
reasonably acceptable to Agent.  For purposes of this defined term and any other
defined term included herein, Store relocations shall be ignored.

 

Person - any individual, corporation, limited liability company, partnership,
joint venture, joint stock company, land trust, business trust, unincorporated
organization, Governmental Authority or other entity.

 

Plan - an employee pension benefit plan that is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue CodeIRC and that is either (a) maintained by Parent or Subsidiary for
employees or (b) maintained pursuant to a collective bargaining agreement, or
other arrangement under which more than one employer makes contributions and to
which Parent or Subsidiary is making or accruing an obligation to make
contributions or has within the preceding five years made or accrued such
contributions.

 

Pledge Agreement - each pledge agreement pursuant to which an Obligor pledges to
Agent, for the benefit of Secured Parties, such Obligor’s equity
interestsCapital Stock, as security for the Obligations.

 

Post-Closing Agreement - means that certain letter agreement dated as of the
Closing Date

 

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among Agent and the Obligors setting forth any applicable conditions reasonably
required by Agent to be fulfilled by Obligors, as applicable, subsequent to the
Closing Date in time periods as set forth therein, as amended, restated,
supplemented or otherwise modified from time to time.

 

Pro Rata - (a) with respect to any Tranche A Lender, a percentage (expressed as
a decimal, rounded to the ninth decimal place) determined (i) while the Tranche
A Revolver Commitments are outstanding, by dividing the amount of such Tranche A
Lender’s Tranche A Revolver Commitment by the aggregate amount of all Tranche A
Revolver Commitments; and (ii) at any other time, by dividing the amount of such
Tranche A Lender’s Tranche A Revolver Loans and LC Obligations by the aggregate
amount of all outstanding Tranche A Revolver Loans and LC Obligations and
(b) with respect to any Tranche A-1 Lender, a percentage (expressed as a
decimal, rounded to the ninth decimal place) determined (i) while the Tranche
A-1 Revolver Commitments are outstanding, by dividing the amount of such Tranche
A-1 Lender’s Tranche A-1 Revolver Commitment by the aggregate amount of all
Tranche A-1 Revolver Commitments; and (ii) at any other time, by dividing the
amount of such Tranche A-1 Lender’s Tranche A-1 Revolver Loans by the aggregate
amount of all outstanding Tranche A-1 Revolver Loans.

 

Properly Contested - with respect to any obligation of an Obligor, (a) the
obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued;
(c) appropriate reserves have been established in accordance with GAAP;
(d) non-payment could not be reasonably expected to have a Material Adverse
Effect, nor result in forfeiture or sale of any assets of the Obligor; (e) no
Lien is imposed on assets of the Obligor, unless bonded and stayed to the
reasonable satisfaction of Agent; and (f) if the obligation results from entry
of a judgment or other order, such judgment or order is stayed pending appeal or
other judicial review.

 

Property - any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

 

Protective Advances - as defined in Section 2.1.5.

 

Purchase Money Debt - (a) Debt (other than the Obligations) for payment of any
of the purchase price of fixed assets; (b) Debt (other than the Obligations)
incurred within 10 days before or after acquisition of any fixed assets, for the
purpose of financing any of the purchase price thereof; (c) Capital Leases and
(d) any renewals, extensions or refinancings (but not increases) thereof.

 

Purchase Money Lien - a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt, and any proceeds thereof, and
constituting a Capital Lease, a purchase money security interest under the UCC
or a purchase money mortgage.

 

Qualified ECP Guarantor - shall mean, at any time, each Obligor with total
assets exceeding $10,000,000 or that qualifies at such time as an “eligible
contract participant” under the Commodity Exchange Act and can cause another
person to qualify as an “eligible contract participant” at such time under
§1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

RCRA - the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).

 

Real Estate - all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.

 

Recipient - Agent, any Lender, any Issuing Bank or any other recipient of any
payment to

 

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be made by or on account of any obligation of any Obligor hereunder.

 

Refinance - in respect of any Debt, to refinance, extend, renew, defease,
supplement, restructure, replace or repay such Debt, or to issue other Debt in
exchange or replacement for such Debt, in whole or in part, whether with the
same or different lenders, arrangers or agents, “Refinanced” and “Refinancing”
shall have correlative meanings.

 

Refinancing Conditions - the following conditions for Refinancing Debt:  (a) it
is in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, renewed or Refinanced, plus the amount of any premiums
required to be paid thereon, accrued interest and reasonable fees and expenses
associated therewith; provided that with respect to any extension, renewal or
Refinancing of the Senior Note Debt, the principal amount of the Debt under such
extension, renewal or Refinancing shall not exceed $600,000,000; provided
further, that with respect to any extension, renewal or Refinancing of the
Mortgage Loan Debt, the principal amount of the Debt under such extension,
renewal or Refinancing shall not exceed $260,000,000; (b) its stated maturity
shall be later than the Debt being Refinanced, extended or renewed; (c) the
weighted average life to maturity of such Refinancing Debt is not less than the
weighted average life to maturity of the Debt being Refinanced, extended or
renewed; (d) the interest rate applicable to such Refinancing Debt (taking
account of any original issue discount) is based upon the prevailing market
conditions for the type of Refinancing Debt being incurred (taking into account
the characteristics of the Obligors at such time), at the time of such
Refinancing, extension or renewal; (e) it is subordinated in right of payment to
the Obligations at least to the same extent as the Debt being Refinanced,
extended or renewed and any Liens securing such Refinancing Debt shall be
subordinated to the Liens securing the Obligations at least to the same extent
as the Liens securing the Debt being Refinanced, pursuant to an intercreditor or
subordination agreement (as applicable) in form and substance reasonably
satisfactory to the Agent and the Co-Collateral Agents; (f) the representations,
covenants and defaults applicable to such Refinancing Debt are, taken as a
whole, substantially consistent with market terms of agreements governing
comparable Debt of similar companies at the time of such Refinancing, extension
or renewal; (g) no additional Lien is granted to secure it (other than to secure
the additional Debt permitted to be incurred pursuant to clause (a) of this
definition); provided that with respect to any extension, renewal or Refinancing
of the Senior Note Debt, Liens may be granted to the holders thereof so long as
such Liens are permitted under Section 10.2.2(s); (h) no additional Obligor is
obligated on such Debt; provided that with respect to any extension, renewal or
Refinancing of the Senior Note Debt, any Obligor may be obligated in respect
thereof; and (i) upon giving effect to such Refinancing Debt, no Default or
Event of Default exists; provided, however, that with respect to clauses (d) and
(f) above, a certificate of a Senior Officer of the Borrower Agent delivered to
the Agent with reasonable prior notice before the incurrence of such Refinancing
Debt, together with a reasonably detailed description of the material terms of
such Debt or drafts of the documentation relating thereto, stating that the
Borrower Agent has determined in good faith that such terms satisfy the
requirement under such clauses (d) and (f) shall be conclusive evidence that
such terms satisfy such requirements.

 

Refinancing Debt - Borrowed Money that is the result of an extension,
replacement, renewal or Refinancing of Debt permitted under Section 10.2.1 (b),
(c), (d), (e), (i), (k), (p), (u) or (v).

 

Register - as defined in Section 13.2.2.

 

Reimbursement Date - as defined in Section 2.3.2.

 

Related Parties - with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents, trustees, attorneys and
advisors of such Person and of such Person’s Affiliates.

 

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Related Real Estate Documents - with respect to any Real Estate subject to a
Mortgage, the following, in form and substance reasonably satisfactory to Agent
and received by Agent for review at least 15 days prior to the effective date of
the Mortgage (or such shorter length of time acceptable to Agent in its
reasonable discretion):  (a) a mortgagee title policy (or binder therefor)
covering Agent’s interest under the Mortgage, in a form and amount and by an
insurer reasonably acceptable to Agent, which must be fully paid on such
effective date; (b) such assignments of leases, rents, estoppel letters,
attornment agreements, consents, waivers and releases as Agent may require with
respect to other Persons having an interest in the Real Estate; (c) a survey of
the Real Estate, containing a metes and bounds property description and flood
plain certification, and certified by a licensed surveyor reasonably acceptable
to Agent; (d) flood insurance in an amount, with endorsements and by an insurer
reasonably acceptable to Agent, if the Real Estate is within a flood plain;
(e) a current appraisal of the Real Estate, prepared by an appraiser reasonably
acceptable to Required Lenders, and in form and substance satisfactory to
Required Lenders; (f) a Phase I (and to the extent appropriate, Phase II)
environmental assessment report, prepared by an environmental consulting firm
reasonably satisfactory to Agent, and accompanied by such reports, certificates,
studies or data as Agent may reasonably require, which shall all be in form and
substance reasonably satisfactory to Agent; (g) an Environmental Agreement and
such other documents, instruments or agreements as Agent may reasonably require
with respect to any environmental risks regarding the Real Estate; and (h) a
written opinion of local counsel relating to each Mortgage and with respect to
such other matters as Agent may reasonably request, in each case, in form and
substance reasonably acceptable to Agent.

 

Rent and Charges Reserve - the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months’ rent and other charges that could be payable to any such
Person, unless it has executed a Lien Waiver.

 

Report - as defined in Section 12.2.3.

 

Reportable Event - any event set forth in Section 4043(bc) of ERISA.

 

Required Lenders - Lenders (subject to Section 4.2) having (a) Commitments in
excess of 50% of the aggregate Commitments; and (b) if the Commitments have
terminatedupon the occurrence of the Commitment Termination Date, Loans and LC
Obligations in excess of 50% of all outstanding Loans and LC Obligations;
provided that the unused Commitments of, and the portion of the Loans and LC
Obligations held or deemed held by any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

Required Tranche A-1 Lenders - Lenders having Tranche A-1 Revolver Loans in
excess of 50% of all outstanding Tranche A-1 Revolver Loans; provided that the
portion of the Tranche A-1 Revolver Loans held or deemed held by any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Tranche A-1 Lenders.

 

Reserve Percentage - means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, rounded upward to the nearest 1/8th of
1%)carried out to five decimal places) in effect on such day, whether or not
applicable to member banksany Lender, under regulations issued from time to time
by the Board of Governors for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).Liabilities”).  Adjusted LIBOR for each outstanding LIBOR Loan
shall be adjusted automatically as of the effective date of any change in the
Reserve Percentage.

 

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Restricted Investment - any Investment by Parent or a Subsidiary, other than
(a) (i) Investments in Subsidiaries to the extent existing on the Closing Date
and (ii) Investments in any Borrower or Guarantor; (b) Cash Equivalents that are
subject to Agent’s Lien and control to the extent required hereunder, pursuant
to documentation in form and substance reasonably satisfactory to Agent;
(c) loans and advances permitted under Section 10.2.7, (d) investments held by
the Obligors comprised of notes payable, or stock or other securities issued by
Account Debtors to any Obligor pursuant to negotiated agreements with respect to
settlement of such Account Debtor’s Accounts in the ordinary course of business
consistent with past practice, (e) any Investment made as a result of the
receipt of non-cash consideration from an Permitted Asset Disposition,
(f) Investments evidenced by Hedging Agreements which are otherwise permitted to
be entered into pursuant to Section 10.2.15, (g) stock, obligations or
securities received in connection with the bankruptcy or reorganization of, or
settlement of delinquent accounts and disputes with, customers and suppliers, in
each case in the ordinary course of business or received in satisfaction of
judgment, (h) advances to customers or suppliers in the ordinary course of
business that are, in conformity with GAAP, recorded as accounts receivable,
prepaid expenses or deposits on the balance sheet of any Obligor and
endorsements for collection or deposit arising in the ordinary course of
business, (i) commission, payroll, travel and similar advances to officers and
employees of any Obligor so long as such advances are otherwise permitted under
Section 10.2.7, (j) Investments consisting of the licensing or contribution of
Intellectual Property in the ordinary course of business, (k) Permitted
Acquisitions, (l) Investments described on Schedule 1.1(b) and modifications,
extensions or replacements thereof so long as the amount of the original
Investment does not increase except by the terms of such Investment or as
otherwise permitted hereunder, (m) Investments resulting from deposits referred
to herein in Sections 10.2.2(e), (l), (m) and (p), and other deposits made in
the ordinary course of business securing obligations or performance under real
estate or personal property leases, (n) other Investments (not constituting the
acquisition of all or substantially all of the assets of, or the majority of the
Equity InterestsCapital Stock of, or a business line or unit or a division of,
any Person) made within 180 days of an equity issuance and made solely with the
cash proceeds of such equity issuance in an aggregate amount not to exceed the
Available Basket Amount then in effect so long as (i) no Default or Event of
Default shall have occurred and be continuing immediately prior to making such
Investment and after giving effect thereto and (ii) Excess Availability on the
date of the making of such Investment on a pro forma basis after giving effect
to such Investment, and projected Excess Availability on a pro forma basis for
the upcoming six month period (after giving effect to such Investment), measured
as of the last day of each fiscal month during such six month period, is, in
each case, greater than or equal to 15% of the lesser of (A) the aggregate
Commitments as of the date of such Investment and last day of each fiscal month
of such six month period and (B) the Aggregate Borrowing Base as of the date of
such Investment and the last day of each fiscal month of such six month period
and (o) Investments in any Subsidiary that is not an Obligor in an amount not to
exceed $1,000,000 at any time outstanding.

 

Restrictive Agreement - an agreement (other than a Loan Document) that
conditions or restricts the right of any Borrower, Subsidiary or other Obligor
to incur or repay Borrowed Money, to grant Liens on any assets, to declare or
make Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any intercompany Debt.

 

S&P - Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

 

Sanction(s) - means any international economic sanction administered or enforced
by the United States Government (including, without limitation, OFAC), the
United Nations Security Council, the European Union, Her Majesty’s Treasury or
other relevant sanctions authority.

 

Sarbanes-Oxley - the Sarbanes-Oxley Act of 2002, as amended and in effect.

 

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Second Amendment Closing Date - December 12, 2013.

 

Securities Laws - the Securities Act of 1933, the Securities Exchange Act of
1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.

 

Secured Parties - Agent, Co-Collateral Agents, Issuing Banks, Lenders and
providers of Bank Products.

 

Security Documents - this Loan Agreement, Pledge Agreements, Mortgages,
Trademark Security Agreements, the Copyright Security Agreements, the Account
Control Agreements and all other documents, instruments and agreements now or
hereafter securing (or given with the intent to secure) any Obligations.

 

Senior Note Debt — (i) the unsecured Debt of Bon-Ton in an aggregate principal
amount not to exceed $510,000,000 represented by the Senior Note Debt Documents
and (ii) any Refinancing Debt in respect of the Debt described in clause
(i) represented by the Senior Note Debt Documents which satisfies the
Refinancing Conditions.

 

Senior Note Debt Documents - the Senior Note Indenture, the 10.25% senior notes
issued by Bon-Ton in connection therewith, and all other instruments and
documents from time to time executed in favor of all or any of the holders of
the Senior Note Debt, as any of the same may be amended, restated, supplemented,
modified, renewed, replaced or Refinanced in whole or in part from time to time
and any other agreement extending the maturity of, consolidating, otherwise
renewing, replacing or Refinancing all or any portion of the Senior Note Debt
and whether by the same or any other agent, lender or group of lenders and
whether or not increasing the amount of Senior Note Debt that may be incurred
under the Senior Note Debt Documents, in each case in a manner not inconsistent
with the Loan Documents.

 

Senior Note Indenture -— collectively, (a) the Senior Note Indenture, dated as
of March 6, 2006,July 9, 2012, by and among Bon-Ton and The Bank of New York, as
trustee, as itWells Fargo Bank, National Association, as trustee, and (b) the
Indenture, dated as of May 28, 2013, by and among Bon-Ton and Wells Fargo Bank,
National Association, as trustee, as each may be amended, restated,
supplemented, modified, renewed, replaced or Refinanced in whole or in part from
time to time and any other agreement extending the maturity of, consolidating,
otherwise renewing, replacing or Refinancing all or any portion of the Debt
under the Senior Note Debt Documents or all or any portion of the amounts owed
under any other agreement that itself is the Senior Note Indenture hereunder and
whether by the same or any other agent, lender or group of lenders and whether
or not increasing the amount of Debt under the Senior Note Debt Documents that
may be incurred thereunder, in each case in a manner not inconsistent with the
Loan Documents.

 

Senior Note Intercreditor Agreement - that certain Intercreditor Agreement,
dated as of July 9, 2012, by and among the Agent, the Obligors from time to time
party thereto, and Wells Fargo Bank, National Association, as Notes Agent (as
such term is defined therein), as amended, amended and restated, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

 

Senior Officer - the chairman of the board, president, chief executive officer,
treasurer,  member manager or chief financial officer of a Borrower or, if the
context requires, an Obligor.

 

Settlement Report - a report delivered by Agent to Lenders summarizing the Loans
and

 

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participations in LC Obligations outstanding as of a given settlement date,
allocated to Lenders on a Pro Rata basis in accordance with their Commitments.

 

Software - as defined in the UCC.

 

Solvent - as to any Person, such Person (a) owns Property whose Fair Salable
Value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present Fair Salable Value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for its business and is sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage; (e) is not “insolvent” within the meaning of Section 101(32) of the
Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise)
any obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual intent to
hinder, delay or defraud either present or future creditors of such Person or
any of its Affiliates.  “Fair Salable Value” means the amount that could be
obtained for assets within a reasonable time, either through collection or
through sale under ordinary selling conditions by a capable and diligent seller
to an interested buyer who is willing (but under no compulsion) to purchase. 
For the purposes of this definition, any right of contribution of such Person
existing by law, contract or otherwise shall be deemed an asset of such Person.

 

SPE — means, (a) prior to the SPE Joinder Effective Date,  collectively,
(i) Bonstores Realty One, LLC, a Delaware limited liability company (“BR1LLC”);
(ii) Bonstores Holdings One, LLC, a Delaware limited liability company and the
sole member of BR1LLC; (iii) Bonstores Realty Two, LLC, a Delaware limited
liability company (“BR2LLC”); (iv) Bonstores Holdings Two, LLC, a Delaware
limited liability company and the sole member of BR2LLC, and (b) after the SPE
Joinder Effective Date, none (it being understood that there shall be no SPEs
after the SPE Joinder Effective Date).

 

Specified Event of Default - the occurrence of any Event of Default specified in
the following Sections: (a) Section 11.1(a); (b) Section 11.1(b);
(c) Section 11.1(c) but only with respect to: (i) Sections 7.2.1 and 8.2.3;
(ii) Section 8.1; (iii) Section 10.1.1; (iv) Sections 10.1.2(a) through (f);
(v) Section 10.2; and (vi) Section 10.3; (d) Section 11.1(d), but only with
respect to: (i) Sections 8.2.4 and 8.5; (ii) Section 8.6; and (iii) Sections
10.1.2(g) through (m); and (e) Sections 11.1(h) and (k).

 

Specified Loan PartyObligor - means any Obligor that is not an “eligible
contract participant” under the Commodity Exchange Act (determined prior to
giving effect to Section 14.20).

 

SPE Joinder Effective Date - means the date that (i) each of BR1LLC and BR2LLC
shall have joined this Agreement as a Borrower and (ii) each of Bonstores
Holdings One, LLC, a Delaware limited liability company and Bonstores Holdings
Two, LLC, a Delaware limited liability company shall have joined this Agreement
as a Guarantor, in each case by executing a joinder agreement substantially in
the form of Exhibit H; provided that the Mortgage Loan Debt shall be discharged,
and all Liens in respect thereof released, pursuant to payoff arrangements
reasonably satisfactory to Agent prior to or substantially concurrently with the
joinder of the SPEs as Borrowers or Guarantors, as applicable, hereunder.

 

SPE Real Estate Effective Date - means each date on which (a) Agent shall have
received (i) an SPE Real Estate Election and (ii) a Borrowing Base Certificate
reflecting a calculation of Eligible Real Estate for purposes of determining the
Tranche A Real Estate Availability Amount

 

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and the Tranche A-1 Real Estate Amount, and (b) each of the eligibility criteria
set forth in the definition of “Eligible Real Estate” shall be satisfied with
respect to the Real Estate owned by the SPEs that is the subject of the
applicable SPE Real Estate Election.

 

SPE Real Estate Election - means an election of the Borrowers, at any time on or
after the SPE Joinder Effective Date, to have any Real Estate owned by BR1LLC or
BR2LLC as of the Third Amendment Closing Date included in the determination of
Eligible Real Estate, as set forth in a written notice of Borrower Agent
addressed to Agent, in form and substance reasonably satisfactory to Agent.

 

Statutory Reserves - the percentage (expressed as a decimal) established by the
Board of Governors as the then stated maximum rate for all reserves (including
those imposed by Regulation D of the Board of Governors, all basic, emergency,
supplemental or other marginal reserve requirements, and any transitional
adjustments or other scheduled changes in reserve requirements) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (or any successor category of liabilities under Regulation D).

 

Store - any retail department store operated by the Parent or any of its
Subsidiaries.

 

Subsidiary - any entity at least 50% of whose voting securities or Equity
InterestsCapital Stock is owned by any Obligor or any combination of Obligors
(including indirect ownership by an Obligor through other entities in which such
Obligor directly or indirectly owns 50% of the voting securities or Equity
InterestsCapital Stock).

 

Supermajority Lenders - Lenders (subject to Section 4.2) having (a) Commitments
in excess of 75% of the aggregate Commitments; and (b) if the Commitments have
terminatedupon the occurrence of the Commitment Termination Date, Loans and LC
Obligations in excess of 75% of all outstanding Loans and LC Obligations;
provided that the unused Commitments of, and the portion of the Loans and LC
Obligations held or deemed held by any Defaulting Lender shall be excluded for
purposes of making a determination of Supermajority Lenders.

 

Supermajority Required Tranche A-1 Lenders - Lenders having Tranche A-1 Revolver
Loans in excess of 75% of all outstanding Tranche A-1 Revolver Loans; provided
that the portion of the Tranche A-1 Revolver Loans held or deemed held by any
Defaulting Lender shall be excluded for purposes of making a determination of
Supermajority Required Tranche A-1 Lenders.

 

Supporting Obligation - as defined in the UCC.

 

Swap Obligations - means with respect to any Guarantor any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

Swingline Loan - any Borrowing of Base Rate Tranche A Revolver Loans funded with
Agent’s funds, until such Borrowing is settled among Lenders pursuant to
Section 4.1.3.

 

Syndication Agent — as defined in the Preamble.

 

Taxes - anyall present or future taxes, levies, imposts, duties, fees,
assessments, deductions, withholdings (including backup withholding),
assessments, fees or other charges of whatever nature, including income,
receipts, excise, property, sales, use, transfer, license, payroll, withholding,
social security, franchise, intangibles, stamp or recording taxes imposed by any
Governmental Authority, and allincluding any interest, additions to tax or
penalties and similar liabilities relatingapplicable thereto.

 

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Termination Date - The(a) with respect to the Tranche A Revolver Commitments,
the date that is the earlier to occur of (ai) December 12, 2018 and (bii) the
date that is sixty (60) days prior to the earliest of the maturity date of
(x) any Senior Note Debt (unless there is less than $60 million in aggregate
principal of Senior Note Debt (exclusive of Senior Note Debt with a stated
maturity later than sixty (60) days after the date in clause (a)(i))
outstanding, in which case this clause (x) shall not apply) and (y) the Junior
Debt (if incurred) and (b) with respect to the Tranche A-1 Revolver Loans, the
earlier to occur of (i) the date provided in the immediately preceding clause
(a) as in effect from time to time and (ii) March 15, 2021; provided that, in
each case, if such date is not a Business Day, the applicable Termination Date
shall be the immediately preceding Business Day.

 

Third Amendment Closing Date - January 15, 2016.

 

Total Stores - as to any date of determination, an amount equal to the sum of
(x) the aggregate number of Stores open on the Closing Date plus (y) the
aggregate number of Stores acquired or opened through such date of
determination.

 

Trademark Security Agreements - each trademark collateral security and pledge
agreement or other trademark security agreement pursuant to which an Obligor
grants to Agent, for the benefit of Secured Parties, a Lien on such Obligor’s
interests in trademarks, as security for the Obligations.

 

Tranche A Borrowing Base - on any date of determination, an amount equal to the
lesser of (a) the aggregate amount of Tranche A Revolver Commitments on such
date and (b) the sum of (i) the Tranche A Inventory Formula Amount on such date,
plus (ii) the Tranche A Real Estate Availability Amount on such date, plus
(iii) Tranche A Credit Card Receivables Amount on such date, plus (iv) the
Tranche A Check Receivables Amount on such date, minus (v) the Availability
Reserve on such date.  Notwithstanding the foregoing, in no event shall the
Tranche A Real Estate Availability Amount included in the Tranche A Borrowing
Base exceed 20% of the Tranche A Borrowing Base.

 

Tranche A Check Receivables Amount - means, on any date, an amount equal to 90%
of the book value of Eligible Check Receivables on such date.

 

Tranche A Credit Card Receivables Amount — on any date of determination, 90% of
the book value of Eligible Credit Card Accounts on such date.

 

Tranche A Excess Availability - determined as of any date, the amount that
Borrowers are entitled to borrow as Tranche A Revolver Loans, being the Tranche
A Borrowing Base on such date minus the sum of (a) the outstanding principal
balance of all Tranche A Revolver Loans on such date plus (b) the outstanding
amount of LC Obligations on such date.

 

Tranche A Inventory Formula Amount — on any date of determination, 85% of the
NRV Percentage of the Value of Eligible Inventory on such date.

 

Tranche A Lenders — the Lenders indicated on Schedule 1.1(a) as Lenders of
Tranche A Revolver Loans, Agent in its capacity as a provider of Swingline Loans
and any other Person who hereafter becomes a “Tranche A Lender” pursuant to an
Assignment and Assumption Agreement.

 

Tranche A Overadvance - as defined in Section 2.1.4.

 

Tranche A Real Estate Amount - at any date of determination, 50% of the
Appraised Value of Eligible Real Estate on such date.

 

Tranche A Real Estate Availability Amount - on any date of determination, the
lesser of

 

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(x) $100,000,000 minus the Tranche A-1 Real Estate Amount (or, for the avoidance
of doubt, any portion thereof) utilized in the calculation of the Tranche A-1
Borrowing Base on such date and (y) the Tranche A Real Estate Amount on such
date.

 

Tranche A Revolver Commitment - for any Tranche A Lender, its obligation to make
Tranche A Revolver Loans and to participate in LC Obligations up to the maximum
principal amount shown on Schedule 1.1(a), or as specified hereafter in the most
recent Assignment and Assumption Agreement to which it is a party.  “Tranche A
Revolver Commitments” means the aggregate amount of such commitments of all
Lenders.  OnOn and as of the Fourth Amendment Closing Date, the aggregate
Tranche A Revolver Commitments are $575,000,000.730,000,000.

 

Tranche A Revolver Loan — (a) a Loan made pursuant to Section 2.1.1(a), (b) any
Swingline Loan, (c) any Overadvance Loan deemed by Agent to be a Tranche A
Revolver Loan or (d) any Protective Advance deemed by Agent to be a Tranche A
Revolver Loan.

 

Tranche A Revolver Note - a promissory note to be executed by Borrowers in favor
of a Tranche A Lender in the form of Exhibit A, which shall be in the amount of
such Lender’s Tranche A Revolver Commitment and shall evidence the Tranche A
Revolver Loans made by such Lender.

 

Tranche A-1 Borrowing Base - on any date of determination, an amount equal to
the lesser of (a) the aggregate amount of the Tranche A-1 Revolver Commitments
on such date and (b) the sum of (i) the Tranche A-1 Inventory Formula Amount on
such date, plus (ii) the Tranche A-1 Real Estate Amount on such date, plus
(iii) the Tranche A-1 Credit Card Receivables Amount on such date, plus (iv) the
Tranche A-1 Check Receivables Amount on such date, minus (v) the Availability
Reserve on such date (to the extent not already deducted in the Tranche A
Borrowing Base).  Notwithstanding the foregoing, in no event shall the Tranche
A-1 Real Estate Amount included in the Tranche A-1 Borrowing Base exceed 20% of
the Tranche A-1 Borrowing Base.

 

Tranche A-1 Check Receivables Amount - on any date of determination, 5% of the
book value of Eligible Check Receivables on such date.

 

Tranche A-1 Credit Card Receivables Amount - on any date of determination, 5% of
the book value of Eligible Credit Card Accounts on such date.

 

Tranche A-1 Excess Availability - determined as of any date, the amount that
Borrowers are entitled to borrow as Tranche A-1 Revolver Loans, being the
Tranche A-1 Borrowing Base on such date minus the outstanding principal balance
of all Tranche A-1 Revolver Loans on such date.Documentation Agent — Crystal
Financial LLC, in its capacity as Documentation Agent for the Tranche A-1
Facility, together with its successors and assigns in such capacity.

 

Tranche A-1 Inventory Formula Amount — on any date of determination, the Tranche
A-1 Inventory Advance Percentage20% of the NRV Percentage of the Value of
Eligible Inventory on such date.

 

Tranche A-1 Inventory Advance Percentage - (a) at all times prior to
December 31, 2014, 15%, (b) from and after December 31, 2014 through and
including December 30, 2015, 12.50%, and (c) from and after December 31, 2015
and at all times thereafter, 10.00%.  If any date on which the Tranche A-1
Inventory Advance Percentage is to be adjusted is not a Business Day, then the
Tranche A-1 Inventory Advance Percentage shall be adjusted on the Business Day
next succeeding such day.

 

Tranche A-1 Lenders — the Lenders indicated on Schedule 1.1(a) as Lenders of
Tranche A-1 Revolver Loans and any other Person who hereafter becomes a “Tranche
A-1 Lender” pursuant

 

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to an Assignment and Assumption Agreement.

 

Tranche A-1 Overadvance - as defined in Section 2.1.4.Prepayment Premium - in
connection with any Tranche A-1 Prepayment Premium Trigger Event, (a) if such
Tranche A-1 Prepayment Premium Trigger Event occurs on or prior to the first
year anniversary of the Fourth Amendment Closing Date, two percent (2%) of the
amount of Tranche A-1 Revolver Loans prepaid or deemed to be prepaid in
connection therewith, (b) if such Tranche A-1 Prepayment Premium Trigger Event
occurs after the first anniversary of the Fourth Amendment Closing Date but on
or prior to the second anniversary of the Fourth Amendment Closing Date, one
percent (1%) of the amount of Tranche A-1 Revolver Loans prepaid or deemed to be
prepaid in connection therewith, and (c) thereafter, zero percent (0%).

 

Tranche A-1 Prepayment Premium Trigger Event - the occurrence of any of the
following:

 

(a)           any prepayment of all or any portion of the Tranche A-1 Revolver
Loans for any reason (including, without limitation, any voluntary prepayment,
mandatory prepayment or refinancing thereof), whether before or after (i) the
occurrence of any Event of Default or (ii) the commencement of any Insolvency
Proceeding;

 

(b)           the acceleration of the Tranche A-1 Revolver Loans for any reason,
including, without limitation, acceleration in accordance with Section 11.2, and
including, without limitation, as a result of the commencement of an Insolvency
Proceeding;

 

(c)           the satisfaction, release, payment, restructuring, reorganization,
replacement, reinstatement, defeasance or compromise of the Tranche A-1 Revolver
Loans in any Insolvency Proceeding or the making of a distribution of any kind
in any Insolvency Proceeding to the Agent, for the account of the Tranche A-1
Lenders in full or partial satisfaction of the Tranche A-1 Revolver Loans; or

 

(d)           the termination of this Loan Agreement for any reason.

 

If any Tranche A-1 Prepayment Premium Trigger Event described in the foregoing
clauses (b) through (d) occurs, then, solely for purposes of calculating the
Tranche A-1 Prepayment Premium due and payable in connection therewith, the
entire outstanding principal amount of the Tranche A-1 Revolver Loans shall be
deemed to have been prepaid on the date on which such Tranche A-1 Prepayment
Premium Trigger Event occurs.

 

Tranche A-1 Real Estate Amount - at any date of determination, 10% of the
Appraised Value of Eligible Real Estate on such date.

 

Tranche A-1 Revolver Commitment - for any Lender, its— for any Tranche A-1
Lender, (a) on the Fourth Amendment Closing Date and prior to the Borrowing of
Tranche A-1 Revolver Loans on such date, such Tranche A-1 Lender’s obligation to
make Tranche A-1 Revolver Loans on such date up to the maximum principal amount
shown on Schedule 1.1(a), or as specified hereafter in the most recent
Assignment and Assumption Agreement to which it is a party.  “Tranche A-1
Revolver Commitments” meansand (b) on and after the Fourth Amendment Closing
Date and following the Borrowing of Tranche A-1 Revolver Loans on such date, the
aggregate principal amount of such commitments of all LendersTranche A-1
Revolver Loans held by such Tranche A-1 Lender.  On and as of the Fourth
Amendment Closing Date, the aggregate Tranche A-1 Revolver Commitments are
$100,000,000.150,000,000.

 

Tranche A-1 Revolver Loan - (a) a Loan made pursuant to Section 2.1.1(b),
(b) any Overadvance Loan deemed by Agent to be a Tranche A-1 Revolver Loan or
(c) any Protective

 

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Advance deemed by Agent to be Tranche A-1 Revolver Loan.

 

Tranche A-1 Revolver Note - a promissory note to be executed by Borrowers in
favor of a Lender in the form of Exhibit B, which shall be in the amount of such
Lender’s Tranche A-1 Revolver Commitment and shall evidence the Tranche A-1
Revolver Loans made by such Lender.

 

Tranche A-1 Utilization Amount — on any date of determination, the greater of
(a) $0 and (b) the amount, if any, by which the aggregate outstanding principal
amount of all Tranche A-1 Revolver Loans exceeds the Tranche A-1 Borrowing Base.

 

Transferee - any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.

 

Trigger Event - any date on which (a) a Specified Event of Default occurs or
(b) an Excess Availability Trigger Event occurs.

 

Trigger Event Period - any period (a) commencing upon the occurrence of a
Trigger Event and (ii) ending on a Trigger Event Termination Date.

 

Trigger Event Termination Date - any date during a Trigger Event Period on which
(a) with respect to a Trigger Event resulting from the occurrence of a Specified
Event of Default, all Events of Default have been waived or remedied in
accordance with the terms of the Loan Documents or (b) with respect to an Excess
Availability Trigger Event, Excess Availability for a period of sixty (60)
consecutive calendar days exceeds 12.5% of the lesser of (x) the aggregate
Commitments then in effect and (y) the Aggregate Borrowing Base then in effect;
provided, however, that in no event shall a Trigger Event Termination Date be
deemed to have occurred (and a Trigger Event Period may not end) more than two
(2) times during any period of twelve (12) consecutive months.

 

Type - any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same
interest option and, in the case of LIBOR Loans, the same Interest Period.

 

UCC - the Uniform Commercial Code as in effect in the State of New York or, when
the laws of any other jurisdiction govern the perfection or enforcement of any
Lien, the Uniform Commercial Code of such jurisdiction.

 

UCP - with respect to any Letter of Credit, the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce (“ICC”) Publication
No. 600 (or such later version thereof as may be in effect at the time of
issuance).

 

Unused Line Fee Rate - for any Fiscal Quarter, 0.25% per annum.

 

Upstream Payment - a Distribution by a Subsidiary or any Obligor to any Obligor.

 

U.S. Person - any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the IRC.

 

U.S. Tax Compliance Certificate - has the meaning specified in
Section 5.8.5(b)(ii)(3).

 

Value - for Inventory, its value determined on the basis of the lower of cost or
market, calculated on a first-in, first-out basis.

 

Voting Stock - of any Person as of any date means the capital stockCapital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.

 

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Wells Fargo - Wells Fargo Capital Finance, LLCBank, National Association.

 

Write-Down and Conversion Powers - means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

1.2.         Accounting Terms.  Under the Loan Documents (except as otherwise
specified herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Parent delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Parent and Borrowers’
certified public accountants concur in such change, the change is disclosed to
Agent, and Section 10.3 is amended in a manner that preserves the original
intent thereof in light of such change in GAAP. Notwithstanding anything to the
contrary set forth herein, any changes to GAAP after the Closing Date with
respect to the accounting treatment of leases will not be given effect for the
purposes of calculating the Consolidated Fixed Charge Coverage Ratio or any
other financial ratio or definition contained in this Loan Agreement or any
other Loan Document.  In addition, notwithstanding any changes in GAAP after the
Closing Date, any operating lease of the Borrowers or their Subsidiaries shall
not constitute Debt or a Capital Lease under this Loan Agreement or any other
Loan Document.

 

1.3.         Certain Matters of Construction.  The terms “herein,” “hereof,”
“hereunder” and other words of similar import refer to this Loan Agreement as a
whole and not to any particular section, paragraph or subdivision.  Any pronoun
used shall be deemed to cover all genders.  In the computation of periods of
time from a specified date to a later specified date, “from” means “from and
including,” and “to” and “until” each mean “to but excluding.”  The terms
“including” and “include” shall mean “including, without limitation” and, for
purposes of each Loan Document, the parties agree that the rule of ejusdem
generis shall not be applicable to limit any provision.  Section titles appear
as a matter of convenience only and shall not affect the interpretation of any
Loan Document.  All references to (a) laws or statutes include all related
rules, regulations, interpretations, amendments and successor provisions;
(b) any document, instrument or agreement include any amendments, waivers and
other modifications, extensions or renewals (to the extent permitted by the Loan
Documents); (c) any section means, unless the context otherwise requires, a
section of this Loan Agreement; (d) any exhibits or schedules mean, unless the
context otherwise requires, exhibits and schedules attached hereto, which are
hereby incorporated by reference; (e) any Person include successors and assigns;
(f) [reserved]; or (g) discretion of Agent, Issuing Bank or any Lender means the
sole and absolute discretion of such Person.  All calculations of Value,
fundings of Loans, issuances of Letters of Credit and payments of Obligations
shall be in Dollars.  Tranche A Borrowing Base and, Tranche A-1 Borrowing Base
and Tranche A-1 Utilization Amount calculations shall be consistent with
historical methods of valuation and calculation, and otherwise reasonably
satisfactory to Agent (and not necessarily calculated in accordance with GAAP). 
Borrowers shall have the burden of establishing any alleged negligence,
misconduct or lack of good faith by Agent, Issuing Bank or any Lender under any
Loan Documents.  No provision of any Loan Documents shall be construed against
any party by reason of such party having, or being deemed to have, drafted the
provision.  Whenever the phrase “to the best of Borrowers’ knowledge” or words
of similar import are used in any Loan Documents, it means actual knowledge of a
Senior Officer of a Borrower.

 

1.4.         Letter of Credit Amounts.  Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that by its terms provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.

 

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1.5.         Certifications.  All certifications and other statements made by
any officer, director or employee of an Obligor pursuant to any Loan Document
are and will be made on the behalf of such Obligor and not in such officer’s,
director’s or employee’s individual capacity.

 

1.6.         Times of Day; Rates.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).  The Agent does not warrant, nor accept
responsibility, nor shall the Agent have any liability with respect to the
administration, submission or any other matter related to the rates in the
definition of “Adjusted LIBOR” or with respect to any comparable or successor
rate thereto.

 

1.7.         Borrowing Notices (CashPro).  The parties agree that any Notice of
Borrowing, Notice of Conversion/Continuation, and notice of a Swingline Loan
borrowing, shall be made on Borrower Agent’s irrevocable notice, which may be
given by (A) telephonic or other e-mailed, electronic or internet-based means in
form, in each case, acceptable to the Agent and the Borrower Agent, or (B) a
written notice; provided that any telephonic notice must be confirmed promptly
by delivery to Agent of a written notice executed by a Senior Officer or any
other officer or employee of the applicable Obligor so designated by any Senior
Officer in a notice to Agent or any other officer or employee of the applicable
Obligor designated in or pursuant to an agreement between the applicable Obligor
and Agent.  Any document delivered hereunder that is signed by a Senior Officer
of an Obligor shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Obligor
and such Senior Officer shall be conclusively presumed to have acted on behalf
of such Obligor.

 

SECTION 2.        CREDIT FACILITIES

 

2.1.         Commitment.

 

2.1.1.      Loans.  (a)             Tranche A Revolver Loans.  Each Tranche A
Lender agrees, severally on a Pro Rata basis up to its Tranche A Revolver
Commitment, on the terms set forth herein, to make Tranche A Revolver Loans to
Borrowers from time to time through the Commitment Termination Date.  The
Tranche A Revolver Loans may be repaid and reborrowed as provided herein.  The
Borrowers shall not request, and the Tranche A Lenders shall not advance any
Tranche A Revolver Loans (other than (i) Swingline Loans as provided in
Section 4.1.3 and (ii) Tranche A Revolver Loans used to reimburse a draw on a
Letter of Credit as provided in Section 2.3.2) at any time when there exists any
Tranche A-1 Excess Availability.  Other than as set forth in Section 2.1.4 and
in Section 2.1.5, the Tranche A Lenders shall not have any obligation to honor a
request for a Tranche A Revolver Loan if (i) the unpaid balance of Tranche A
Revolver Loans outstanding at such time and the aggregate amount of all LC
Obligations outstanding at such time (including the requested Tranche A Revolver
Loan) would exceed the result of (A) the Tranche A Borrowing Base at such time
minus (B) the Tranche A-1 Utilization Amount or (ii) the unpaid balance of all
Tranche A Revolver Loans and the aggregate amount of all LC Obligations
outstanding at such time (including the requested Loan) would exceed Excess
Availabilitythe aggregate Tranche A Revolver Commitments at such time.

 

(b)           Tranche A-1 Revolver Loans.  Each Tranche A-1 Lender agrees,
severally on a Pro Rata basis upin an amount equal to its Tranche A-1 Revolver
Commitment, on the terms set forth herein and in the Fourth Amendment, to make
Tranche A-1 Revolver Loans to Borrowers from time to time through the Commitment
Terminationon the Fourth Amendment Closing Date.  The Tranche A-1 Revolver Loans
that are repaid or prepaid may not be repaid and reborrowed as provided herein. 
In no event shall the Tranche A-1 Lenders have any obligation to honor a request
for a Tranche A-1 Revolver Loan if (i) the unpaid balance of Tranche A-1
Revolver Loans outstanding at such time (including the requested Tranche A-1
Revolver Loan) would exceed the Tranche A-1 Borrowing Base at such time or
(ii) the unpaid balance of all Loans outstanding and the aggregate amount of all
LC Obligations outstanding at such time (including the requested Loan) would
exceed Excess Availability at such time.  The credit facility provided under the

 

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Tranche A-1 Revolver Commitments hereunder is funded on a first-in basis and
repaid on a last-out basis, all as provided hereinreborrowed.

 

(c)           Tranche A Borrowing Base, Tranche A-1 Borrowing Base, and Tranche
A-1 Borrowing BaseUtilization Amount.  The Tranche A Borrowing Base, the Tranche
A-1 Borrowing Base and the Tranche A-1 Borrowing BaseUtilization Amount shall be
determined from time to time by Agent by reference to the most recent Borrowing
Base Certificate delivered by the Borrowers.  The Agent may from time to time
establish and modify the Availability Reserve.

 

2.1.2.      Evidence of Debt; Notes.  The Loans made by each Lender and interest
accruing thereon shall be evidenced by the records of Agent and such Lender. 
The accounts or records maintained by the Agent and each Lender shall be
conclusive absent manifest error of the amount of the Loans made by the Lenders
to the Borrowers and the interest and payments thereon.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations.  In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Agent in respect of
such matters, the accounts and records of the Agent shall control in the absence
of manifest error.  At the request of any Lender, Borrowers shall deliver a
Tranche A Revolver Note and/or a Tranche A-1 Revolver Note, as applicable, to
such Lender.

 

2.1.3.      Use of Proceeds.  The proceeds of Loans shall be used by Borrowers
solely (a) to satisfy existing Debt and other obligations under the Existing
Credit Agreement and the related documents; (b) to pay fees and transaction
expenses associated with the closing of this credit facility; (c) to pay
Obligations in accordance with this Loan Agreement; and (d) for working capital
and other lawful general corporate purposes of the Obligors and their
Subsidiaries, which purposes shall include, without limitation, the making of
loans to Affiliates of the Borrowers, capital expenditures, acquisitions and
distributions, so long as each of the foregoing does not violate the terms of
this Loan Agreement.  Notwithstanding the foregoing, the proceeds of the Tranche
A-1 Revolver Loans made on the Fourth Amendment Closing Date shall be used
solely to repay or retire all or a portion of Bon-Ton’s existing Senior Note
Debt consisting of 10.625% senior notes due in 2017, to repay outstanding
Tranche A Revolver Loans, and to pay any fees and expenses incurred in
connection with the foregoing.

 

2.1.4.      Overadvances.  If the aggregate Tranche A Revolver Loans and LC
Obligations exceed the result of (a) the Tranche A Borrowing Base minus (b) the
Tranche A-1 Utilization Amount (“Tranche A Overadvance”) at any time, the excess
amount shall be payable by Borrowers on demand by Agent or the Required Lenders,
but all such Tranche A Revolver Loans and LC Obligations shall nevertheless
constitute Obligations secured by the Collateral and entitled to all benefits of
the Loan Documents.  If the aggregate Tranche A-1 Revolver Loans exceed the
Tranche A-1 Borrowing Base (“Tranche A-1 Overadvance”) at any time, the excess
amount shall be, so long as there are no Tranche A Revolver Loans and no Letters
of Credit outstanding, payable by Borrowers on demand by Agent or the Required
Lenders, but all such Loans shall nevertheless constitute Obligations secured by
the Collateral and entitled to all benefits of the Loan Documents.  Unless its
authority has been revoked in writing by Required Lenders, Agent may require the
Tranche A Lenders to honor requests for Overadvance Loans and to forbear from
requiring Borrowers to cure a Tranche A Overadvance so long as, at the time of
the making of a Tranche A Overadvance (a) Overadvance Loans have not been
outstanding for more than ninety (90) total days in the preceding 365 day period
and (b) the aggregate amount of all Overadvance Loans and Protective Advances
are not known by Agent to exceed 5% of the Aggregate Borrowing Base at such
time.  In no event shall Overadvance Loans be required that would cause (x) the
outstanding Tranche A Revolver Loans and LC Obligations to exceed the aggregate
Commitments at such time or (y) the outstanding Tranche A Revolver Loans and LC
Obligations to exceed the Tranche A Revolver Commitments at such time.  Any
funding of an Overadvance Loan or sufferance of a Tranche A Overadvance shall
not constitute a waiver by Agent or Lenders of the Event of Default caused
thereby.  Overadvance Loans consisting of Loans shall be funded as Base Rate
Tranche A Revolver Loans.  In no event shall any Borrower or other

 

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Obligor be deemed a beneficiary of this Section nor authorized to enforce any of
its terms.  Each Tranche A Lender shall participate in each Overadvance Loan on
a Pro Rata basis.

 

2.1.5.      Protective Advances.  Agent shall be authorized, in its discretion,
at any time that a Default or Event of Default exists or any conditions in
Section 6.2 are not satisfied to make Tranche A Revolver Loans (“Protective
Advances”) (so long as at the time of the making of any Protective Advance,
Protective Advances which constitute Overadvance Loans have not been outstanding
for more than ninety (90) total days in the preceding 365 day period) up to an
aggregate amount equal to (i) 5% of the Aggregate Borrowing Base at such time
minus (ii) the aggregate outstanding principal amount of all Overadvance Loans
at such time, if Agent deems such Loans necessary or desirable to (a) preserve
or protect any Collateral, or to enhance the collectibility or repayment of
Obligations; or (b) pay any other amounts chargeable to Obligors under any Loan
Documents, including costs, fees and expenses.  All Protective Advances shall be
Obligations, secured by the Collateral, and shall be treated for all purposes as
Extraordinary Expenses.  Protective Advances shall be funded as Base Rate
Tranche A Revolver Loans.  Each Tranche A Lender shall participate in each
Protective Advance on a Pro Rata basis.  In no event shall Protective Advances
be made where the making of such Protective Advances would cause (x) the
outstanding Loans and LC Obligations to exceed the aggregate Commitments at such
time or (y) the outstanding Tranche A Revolver Loans and LC Obligations at such
time to exceed the Tranche A Revolver Commitments then in effect.

 

2.2.         Voluntary Reduction or Termination of Commitments.

 

2.2.1.      Voluntary Reduction or Termination of Tranche A Revolver
Commitments.(a)

 

2.2.         Voluntary Termination or Reduction of Tranche A Revolver
Commitments.

 

2.2.1.      Termination of Tranche A Revolver Commitments.  The Tranche A
Revolver Commitments shall terminate on the Termination Date, unless sooner
terminated in accordance with this Loan Agreement.  Upon at least five
(5) Business Days prior written notice to Agent at any time, Borrowers may, at
their option, terminate the Tranche A Revolver Commitments.  Any notice of
termination given by Borrowers shall be irrevocable unless such notice is
conditioned upon the effectiveness of other financing arrangements in which case
such notice may be revoked if such condition is not satisfied.  On the
termination date specified in such notice of termination, Borrowers shall make
payment in full, in cash, of Tranche A Revolver Loans and all interest thereon
and all Obligations due and owing to the Agent or any Tranche A Lender, in its
capacity as a Tranche A Lender.

 

2.2.2.      (b) Reduction of Tranche A Revolver Commitments.  Borrowers may
permanently reduce the Tranche A Revolver Commitments, on a Pro Rata basis for
each Tranche A Lender, from time to time upon written notice to Agent, which
notice shall specify the amount of the reduction, shall be irrevocable once
given unless such notice is conditioned upon the effectiveness of other
financing arrangements in which case such notice may be revoked if such
condition is not satisfied and shall be given at least five (5) Business Days
prior to the requested reduction date.  Each reduction shall be in a minimum
amount of $10,000,000, or an increment of $1,000,000 in excess thereof.  In
connection with any reduction of the Tranche A Revolver Commitments, the
Borrowers shall prepay the Tranche A Revolver Loans and Cash Collateralize
Letters of Credit in an amount sufficient to cause the outstanding Tranche A
Revolver Loans and Letters of Credit to not exceed the Tranche A Revolver
Commitments then in effect.

 

2.2.2.      Voluntary Reduction or Termination of Tranche A-1 Revolver
Commitments.

 

(a)           The Tranche A-1 Revolver Commitments shall terminate on the
Termination Date, unless sooner terminated in accordance with this Loan
Agreement.  Upon at least five (5) Business Days

 

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prior written notice to Agent, Borrowers may, at their option, terminate the
Tranche A-1 Revolver Commitments so long as the Borrower Agent has (i) certified
in writing (pursuant to a certificate signed on its behalf by a Senior Officer)
that there are no Tranche A Revolver Loans or LC Obligations outstanding as of
the date of such termination, (ii) certified in writing that Tranche A Excess
Availability as of the date of such termination is greater than or equal to
twenty-five percent (25%) of the Tranche A Borrowing Base as of the date of such
termination, (iii) certified in writing that no Default or Event of Default
exists or would result from such termination and (iv) has provided Agent with a
Borrowing Base Certificate, in form and substance reasonably satisfactory to
Agent, demonstrating that average Tranche A Excess Availability for the
twelve-month period following such termination, calculated on a pro forma basis
after giving effect to such termination and determined as of the last day of
each fiscal month during such twelve-month period, will be greater than or equal
to twenty-five percent (25%) of the Tranche A Borrowing Base as of the last day
of each fiscal month during such twelve-month period.  Any notice of termination
given by Borrowers shall be irrevocable unless such notice is conditioned upon
the effectiveness of other financing arrangements in which case such notice may
be revoked if such condition is not satisfied.  On the termination date
specified in such notice of termination, Borrowers shall make payment in full,
in cash of Tranche A-1 Revolver Loans and all interest thereon and all
Obligations due and owing to the Agent or any Tranche A-1 Lender, in its
capacity as a Tranche A-1 Lender.

 

(b)           Borrowers may permanently reduce the Tranche A-1 Revolver
Commitments, on a Pro Rata basis for each Tranche A-1 Lender, upon at least five
(5) Business Days prior written notice to Agent, so long as a Senior Officer of
the Borrower Agent has (i) certified in writing that there are no Tranche A
Revolver Loans or LC Obligations outstanding as of the date of such reduction,
(ii) certified in writing that Tranche A Excess Availability as of the date of
such reduction is greater than or equal to twenty-five percent (25%) of the
Tranche A Borrowing Base as of the date of such reduction, (iii) certified in
writing that no Default or Event of Default exists or would result from such
reduction and (iv) has provided Agent with a Borrowing Base Certificate, in form
and substance reasonably satisfactory to Agent, demonstrating that average
Tranche A Excess Availability for the twelve-month period following such
reduction, calculated on a pro forma basis after giving effect to such reduction
and determined as of the last day of each fiscal month during such twelve-month
period, will be greater than or equal to twenty-five percent (25%) of the
Tranche A Borrowing Base as of the last day of each fiscal month during such
twelve-month period.  Any such notice of reduction shall specify the amount of
the reduction, shall be irrevocable once given unless such notice is conditioned
upon the effectiveness of other financing arrangements in which case such notice
may be revoked if such condition is not satisfied, shall be given at least five
Business Days prior to the requested reduction date.  Each reduction shall be in
a minimum amount of $5,000,000, or an increment of $1,000,000 in excess
thereof.  In connection with any reduction of the Tranche A-1 Revolver
Commitments, the Borrowers shall prepay the Tranche A-1 Revolver Loans in an
amount sufficient to cause the outstanding Tranche A-1 Revolver Loans to not
exceed the Tranche A-1 Revolver Commitments then in effect.

 

2.3.         Letter of Credit Facility.

 

2.3.1.      Issuance of Letters of Credit.  Issuing Bank agrees, in reliance
upon the agreements of the Lenders set forth in this Section 2.3, to issue or
cause the issuance of Letters of Credit from time to time until five
(5) Business Days prior toLetter of Credit Expiration Date (or until the
Termination Date (or until the date of termination of the Tranche A Revolver
Commitments, if earlier), on the terms set forth herein, including the
following:

 

(a)           Each Borrower acknowledges that Issuing Bank’s willingness to
issue or cause the issuance of any Letter of Credit is conditioned upon Issuing
Bank’s receipt of a LC Application with respect to the requested Letter of
Credit, as well as such other instruments and agreements as Issuing Bank may
customarily require for issuance of a letter of credit of similar type and
amount.  Issuing Bank shall have no obligation to issue any Letter of Credit
unless (i) Issuing Bank receives a LC Request and LC Application not later than
11:00 a.m. at least three Business Days prior to the requested date of issuance;
and (ii) each

 

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LC Condition is satisfied.  If Issuing Bank receives written notice from a
Tranche A Lender at least one Business Day before issuance of a Letter of Credit
that any LC Condition has not been satisfied, Issuing Bank shall have no
obligation to issue the requested Letter of Credit (or any other) until such LC
Condition is satisfied or until Required Lenders have waived such condition in
accordance with this Loan Agreement.  Prior to receipt of any such
notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC
Conditions.  No Issuing Bank shall be under any obligation to issue any Letter
of Credit if (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank
from issuing such Letter of Credit, or any law applicable to such Issuing Bank
or any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over such Issuing Bank shall prohibit,
or request that such Issuing Bank refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon
such Issuing Bank with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such Issuing Bank is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Bank in good faith deems material to it,
(ii) the issuance of such Letter of Credit would violate one or more policies of
such Issuing Bank applicable to letters of credit generally or (iii) any Lender
is at such time a Defaulting Lender, unless such Issuing Bank has entered into
arrangements satisfactory to such Issuing Bank with the Borrowers or such
Defaulting Lender to eliminate such Issuing Bank’s Fronting Exposure with
respect to such Defaulting Lender.

 

(b)           Letters of Credit may be requested by a Borrower only (i) to
support obligations of such Borrower incurred in the Ordinary Course of
Business; or (ii) for other purposes as Agent and Lenders may approve from time
to time in writing.  The renewal or extension of any Letter of Credit shall be
treated as the issuance of a new Letter of Credit, except that delivery of a new
LC Application shall be required at the discretion of Issuing Bank.

 

(c)           Borrowers assume all risks of the acts, omissions or misuses of
any Letter of Credit by the beneficiary.  In connection with issuance of any
Letter of Credit, none of Agent, Issuing Bank or any Lender shall be responsible
for the existence, character, quality, quantity, condition, packing, value or
delivery of any goods purported to be represented by any Documents; any
differences or variation in the character, quality, quantity, condition,
packing, value or delivery of any goods from that expressed in any Documents;
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
Documents or of any endorsements thereon; the time, place, manner or order in
which shipment of goods is made; partial or incomplete shipment of, or failure
to ship, any goods referred to in a Letter of Credit or Documents; any deviation
from instructions, delay, default or fraud by any shipper or other Person in
connection with any goods, shipment or delivery; any breach of contract between
a shipper or vendor and a Borrower; errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex,
telecopy, e-mail, telephone or otherwise; errors in interpretation of technical
terms; the misapplication by a beneficiary of any Letter of Credit or the
proceeds thereof; or any consequences arising from causes beyond the control of
Issuing Bank, Agent or any Lender, including any act or omission of a
Governmental Authority.  The rights and remedies of Issuing Bank under the Loan
Documents shall be cumulative.  Issuing Bank shall be fully subrogated to the
rights and remedies of each beneficiary whose claims against Borrowers are
discharged with proceeds of any Letter of Credit.

 

(d)           In connection with its administration of and enforcement of rights
or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
notice or other communication in whatever form believed by Issuing Bank, in good
faith, to be genuine and correct and to have been signed, sent or made by a
proper Person.  Issuing Bank may consult with and employ legal counsel,
accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such experts. 
Issuing Bank may employ agents and attorneys-in-fact in connection with any
matter relating to Letters of Credit or LC

 

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Documents, and shall not be liable for the negligence or misconduct of any such
agents or attorneys-in-fact selected with reasonable care.

 

(e)           Agent shall have no obligation to approve any request for a
commercial Letter of Credit for the purchase of finished goods unless each of
the following documents are required as conditions to any draw thereon, and for
such commercial Letter of Credit to constitute an Eligible Trade L/C, such
documents being in the possession of Agent (either directly or through its
agent) must be conditions to any draw thereon (except that Agent may waive any
one or more of the following conditions):

 

(i)            the original Eligible Trade L/C, if only one draw is permitted
thereunder or if multiple draws are permitted and the subject draw is the final
draw thereunder;

 

(ii)           an inspection certificate in form reasonably acceptable to Agent,
in its discretion, executed by a Borrower’s employee or agent at the point of
origin of the finished goods;

 

(iii)          a commercial invoice with respect to the purchase
order(s) against which such finished goods are being delivered and a packaging
list with respect to such goods;

 

(iv)          a non-negotiable ocean bill of lading, freight forwarders cargo
receipt, a house bill of lading or a copy of an airway bill of lading issued by
an Approved Shipper with respect to the finished goods being shipped and
providing for the delivery thereof to a Borrower; and

 

(v)           a certificate of origin or other documents of title with respect
to such Inventory.

 

(f)                                            (f)            The parties hereto
agree that each outstanding letter of credit described on Schedule 2.3.2 shall
be deemed to be a Letter of Credit issued pursuant to this Loan Agreement.

 

(g)                                           (g)           Promptly after
receipt of any LC Application, the Issuing Bank will confirm with the Agent (by
telephone or in writing) that the Agent has received a copy of such LC
Application from the Borrowers and, if not, the Issuing Bank will, upon the
request of the Agent, provide the Agent with a copy thereof.  Subject to the
requirements of subsection (j) below, unless the Issuing Bank has received
written notice from any Lender, the Agent or any Borrower, at least one Business
Day prior to the requested date of issuance or amendment of the applicable
Letter of Credit, that one or more applicable conditions contained in Section 6
shall not then be satisfied, then, subject to the terms and conditions hereof,
the Issuing Bank shall, on the requested date, issue a Letter of Credit for the
account of the Borrowers.

 

(h)                                           (h)           The obligation of
the Borrowers to reimburse the Issuing Bank for each drawing under each Letter
of Credit and to repay each borrowing under each Letter of Credit shall be
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Loan Agreement under all circumstances,
including the following: (i) any lack of validity or enforceability of such
Letter of Credit, this Loan Agreement, or any other Loan Document; (ii) the
existence of any claim, counterclaim, setoff, defense or other right that any
Borrower or any Subsidiary may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with this Loan Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction; (iii) any draft, demand, certificate or
other document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under such Letter of Credit; (iv) any payment by the Issuing Bank under such
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment

 

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made by the Issuing Bank under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit; or (v) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Borrower or any Subsidiary.

 

(i)                                            (i)            The Borrowers
shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with the Borrowers’ instructions or other irregularity, the Borrowers will
immediately notify the Issuing Bank.  The Borrowers shall be conclusively deemed
to have waived any such claim against the Issuing Bank and its correspondents
unless such notice is given as aforesaid.

 

(j)                                            (j)            Each Issuing Bank
shall, before the issuance of any Letter of Credit, notify the Agent in writing
of the issuance of each Letter of Credit hereunder and, upon the request of the
Agent, provide Agent with a copy of any such Letter of Credit (it being
understood that such Issuing Bank may update Agent one time during a Business
Day with respect to all relevant Letters of Credit).  A failure of any Issuing
Bank (other than Bank of America) to comply with the requirements of this clause
(j) in respect any Letter of Credit may, as determined by the Agent in its sole
discretion, cause the LC Obligations in respect of such Letter of Credit to be
excluded from the Obligations.

 

2.3.2.      Reimbursement; Participations.

 

(a)           If Issuing Bank honors any request for payment under a Letter of
Credit or, if applicable a LC Guaranty with respect to a Letter of Credit,
Borrowers shall pay to Issuing Bank, on the same day (“Reimbursement Date”), the
amount paid by Issuing Bank under such Letter of Credit or, if applicable, under
a LC Guaranty with respect to such Letter of Credit, together with interest at
the interest rate for Base Rate Tranche A Revolver Loans from the Reimbursement
Date until payment by Borrowers.  The obligation of Borrowers to reimburse
Issuing Bank for any payment made under a Letter of Credit or LC Guaranty shall
be absolute, unconditional, irrevocable, and joint and several, and shall be
paid without regard to any lack of validity or enforceability of any Letter of
Credit or the existence of any claim, setoff, defense or other right that
Borrowers may have at any time against the beneficiary.  Whether or not Borrower
Agent submits a Notice of Borrowing, Borrowers shall be deemed to have requested
a Borrowing of Base Rate Tranche A Revolver Loans in an amount necessary to pay
all amounts due Issuing Bank on any Reimbursement Date and each Tranche A Lender
agrees to fund its Pro Rata share of such Borrowing whether or not the Tranche A
Commitments have terminated, a Tranche A Overadvance exists or is created
thereby, or the conditions in Section 6 are satisfied.

 

(b)           Upon issuance of a Letter of Credit, each Tranche A Lender shall
be deemed to have irrevocably and unconditionally purchased from Issuing Bank,
without recourse or warranty, an undivided Pro Rata interest and participation
in all LC Obligations relating to the Letter of Credit.  If Issuing Bank makes
any payment under a Letter of Credit or a LC Guaranty and Borrowers do not
reimburse such payment on the Reimbursement Date, Agent shall promptly notify
Lenders and each Tranche A Lender shall promptly (within one Business Day) and
unconditionally pay to Agent, for the benefit of Issuing Bank, such Tranche A
Lender’s Pro Rata share of such payment.  Upon request by a Tranche A
Lender, Issuing Bank shall furnish copies of any Letters of Credit and LC
Documents in its possession at such time.

 

(c)           The obligation of each Tranche A Lender to make payments to Agent
for the account of Issuing Bank in connection with Issuing Bank’s payment under
a Letter of Credit or LC Guaranty shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or exception
whatsoever, and shall be made in accordance with this Loan Agreement under all
circumstances, irrespective of any lack of validity or unenforceability of any
Loan Documents; any draft, certificate or other document presented under a
Letter of Credit having been determined to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or the

 

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existence of any setoff or defense that any Obligor may have with respect to any
Obligations.  Issuing Bank does not assume any responsibility for any failure or
delay in performance or any breach by any Borrower or other Person of any
obligations under any LC Documents.  Issuing Bank does not make to Lenders any
express or implied warranty, representation or guaranty with respect to the
Collateral, LC Documents or any Obligor.  Issuing Bank shall not be responsible
to any Lender for any recitals, statements, information, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any LC Documents; the validity, genuineness,
enforceability, collectibility, value or sufficiency of any Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any
Obligor.

 

(d)           If any Lender fails to make available to the Agent for the account
of the Issuing Bank any amount required to be paid by such Lender pursuant to
the foregoing provisions of this Section 2.3 by the time specified in this
Section 2.3, the Issuing Bank shall be entitled to recover from such Lender
(acting through the Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Issuing Bank at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the Issuing Bank in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the Issuing
Bank in connection with the foregoing.  If such Lender pays such amount (with
interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s required payment by such Lender pursuant to the foregoing provisions of
this Section 2.3.  A certificate of the Issuing Bank submitted to any Lender
(through the Agent) with respect to any amounts owing under this Section 2.3
shall be conclusive absent manifest error.

 

(e)           No Issuing Bank Indemnitee shall be liable to any Lender or other
Person for any action taken or omitted to be taken in connection with any LC
Documents except as a result of its actual gross negligence or willful
misconduct.  Issuing Bank shall not have any liability to any Lender if Issuing
Bank refrains from any action under any Letter of Credit or LC Documents until
it receives written instructions from Required Lenders.

 

2.3.3.      Cash Collateral.  If any LC Obligations, whether or not then due or
payable, shall for any reason be outstanding at any time (a) that an Event of
Default exists, (b) that Tranche A Excess Availability is less than zero,
(c) after the date on which the Tranche A Revolver Commitment has been
terminated, or (d) within five Business Days prior to the Terminationafter the
Letter of Credit Expiration Date, then Borrowers shall, at Issuing Bank’s or
Agent’s request, pay to Issuing Bank the amount of all outstanding LC
Obligations and Cash Collateralize or backstop in a manner agreed to by the
Borrower Agent and the Issuing Bank, all outstanding Letters of Credit.  If
Borrowers fail to Cash Collateralize or backstop outstanding Letters of Credit
as required herein, Tranche A Lenders may (and shall upon direction of Agent)
advance, as Base Rate Tranche A Revolver Loans, the amount of the Cash
Collateral required (whether or not the Commitments have terminated, any Tranche
A Overadvance or Tranche A-1 Overadvance exists, or the conditions in Section 6
are satisfied).  At any time that there shall exist a Defaulting Lender,
promptly upon the reasonable request of the Agent (including with respect to
Swingline Loans) or the Issuing Bank, the Borrowers shall deliver to the Agent
from time to time Cash Collateral in an amount sufficient to cover all Fronting
Exposure (after giving effect to Section 4.2 and any Cash Collateral provided by
the Defaulting Lender).  Cash Collateral provided in respect of Letters of
Credit or Swing Line Loans shall be held and applied to the satisfaction of the
specific LC Obligations, Swingline Loans, obligations to fund participations
therein (including, as to Cash Collateral provided by a Defaulting Lender, any
interest accrued on such obligation) and other obligations for which the Cash
Collateral was so provided, prior to any other application of such property as
may be provided for herein.  Each Borrower, and to the extent provided by any
Defaulting Lender, such Lender, hereby grants to (and subjects to the control
of) the Agent, for the benefit of the Agent, the Issuing Bank and the Lenders,
and agrees to maintain, a first priority security interest in all such cash,
deposit accounts and all balances therein, and all other property so provided as
collateral pursuant hereto, and in all proceeds of the foregoing, all as
security for the obligations to which such Cash Collateral may be applied.

 

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2.3.4.      Role of Issuing Bank.  Each Lender and each Borrower agree that, in
paying any drawing under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the Issuing Bank,
the Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the Issuing Bank shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
document in connection therewith.  None of the Issuing Bank, the Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of the Issuing Bank shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.3.1(h); provided, however,
that anything in such clauses to the contrary notwithstanding, the Borrowers may
have a claim against the Issuing Bank, and the Issuing Bank may be liable to the
Borrowers, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrowers which the
Borrowers prove were caused by the Issuing Bank’s bad faith, willful misconduct
or gross negligence or the Issuing Bank’s failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in limitation of the foregoing, the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the Issuing Bank shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.  The Issuing Bank may send a Letter of
Credit or conduct any communication to or from the beneficiary via the Society
for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or
overnight courier, or any other commercially reasonable means of communicating
with a beneficiary.

 

2.3.5.      Applicability of ISP and UCP; Limitation of Liability.  Unless
otherwise expressly agreed by the Issuing Bank and the Borrowers when a Letter
of Credit is issued,(i) the rules of the ISP shall apply to each standby Letter
of Credit of Credit, and (ii) the rules of the UCP shall apply to each
documentary Letter of Credit.  Notwithstanding the foregoing, the Issuing Bank
shall not be responsible to the Borrowers for, and the Issuing Bank’s rights and
remedies against the Borrowers shall not be impaired by, any action or inaction
of the Issuing Bank required or permitted under any law, order, or practice that
is required or permitted to be applied to any Letter of Credit or this Loan
Agreement, including the law or any order of a jurisdiction where the Issuing
Bank or the beneficiary is located, the practice stated in the ISP or UCP, as
applicable, or in the decisions, opinions, practice statements, or official
commentary of the ICC Banking Commission, the Bankers Association for Finance
and Trade — International Financial Services Association (BAFT-IFSA), or the
Institute of International Banking Law & Practice, whether or not any Letter of
Credit chooses such law or practice.

 

2.4.         Increase in Tranche A Revolver Commitments.

 

2.4.1.      Request for Increase, Etc.  Provided no Default or Event of Default
has occurred and is continuing, upon notice to the Agent (which shall promptly
notify the Lenders or such subset of Lenders as requested by the Borrower
Agent), the Borrower Agent may, not more than two (2) times in any calendar
year, request an increase in the Tranche A Revolver Commitments; provided that
in no event shall the aggregate Tranche A Revolver Commitments (after giving
effect to all requested increases therein) exceed $800,000,000.  Any such
increase in the Tranche A Revolver Commitments may be provided by, at the
election of the Borrower Agent, any Lender willing to participate in such
increase or, subject to the approval of the Agent, Eligible Assignees designated
by the Borrower Agent that are willing to participate in such increase (each, an
“Increasing Lender”) who shall become a Lender pursuant to a joinder agreement
in form and substance reasonably satisfactory to the Agent, pursuant to which
such Eligible Assignees shall

 

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become a party to this Loan Agreement.  Any increase in the Tranche A Revolver
Commitments shall be in a minimum amount of $25,000,000 and shall be on the same
terms and conditions as this Loan Agreement and the other Loan Documents (except
with respect to any fees that may be agreed among the Borrowers, MLPFS, the
Agent and any Lender or Increasing Lender participating in connection with such
increase, which amounts shall not be subject to any “pro rata sharing”
provisions hereof).  The Borrower Agent shall determine (A) the final allocation
of such increase among Increasing Lenders and Schedule 1.1(a) attached hereto
shall be automatically updated to reflect the same and (B) the effective date
(the “Increase Effective Date”) of any such increase.  Nothing contained herein
shall constitute, or otherwise be deemed to be, a commitment on the part of any
Lender to increase its Tranche A Revolver Commitment hereunder.

 

2.4.2.      Conditions to Effectiveness of Increase.  As a condition precedent
to such increase, the Borrower Agent shall deliver to the Agent a certificate of
each Obligor dated as of the Increase Effective Date signed by a Senior Officer
of such Obligor (i) certifying and attaching the resolutions adopted by such
Obligor approving or consenting to such increase and (ii) certifying that,
before and after giving effect to such increase, (A) the representations and
warranties contained in Section 9 and the other Loan Documents are true and
correct in all material respects on and as of the Increase Effective Date,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct in all material
respects as of such earlier date, and except that for purposes of this
Section 2.4, the representations and warranties contained in Section 9.1.8 shall
be deemed to refer to the most recent financial statements furnished to the
Agent under this Loan Agreement, and (B) no Default or Event of Default has
occurred and is continuing.  The Borrowers shall prepay any Loans outstanding on
the Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.9) to the extent necessary to keep the outstanding Tranche A Revolver
Loans ratable with any revised Pro Rata shares arising from any nonratable
increase in the Tranche A Revolver Commitments under this Section 2.4.

 

SECTION 3.        INTEREST, FEES AND CHARGES

 

3.1.         Interest.

 

3.1.1.      Rates and Payment of Interest.

 

(a)           The Obligations shall bear interest (i) if a Base Rate Tranche A
Revolver Loan, at the Base Rate in effect from time to time, plus the Applicable
Margin for Base Rate Tranche A Revolver Loans; (ii) if a Base Rate Tranche A-1
Revolver Loan, at the Base Rate in effect from time to time, plus the Applicable
Margin for Base Rate Tranche A-1 Revolver Loans; (iii) if a LIBOR Tranche A
Revolver Loan, at Adjusted LIBOR for the applicable Interest Period, plus the
Applicable Margin for LIBOR Tranche A Revolver Loans; and (iv) if a LIBOR
Tranche A-1 Revolver Loan, at Adjusted LIBOR for the applicable Interest Period,
plus the Applicable Margin for LIBOR Tranche A-1 Revolver Loans; and (v) if any
other Obligation (including, to the extent permitted by law, interest not paid
when due), at the Base Rate in effect from time to time, plus the Applicable
Margin for Base Rate Tranche A-1 Revolver Loans.  Interest shall accrue from the
date the Loan is advanced or the Obligation is incurred or payable, until paid
by Borrowers.  If a Loan is repaid on the same day made, one day’s interest
shall accrue.  Notwithstanding the foregoing, if the Agent cannot determine or
use Adjusted LIBOR as provided in Sections 3.1.4, 3.5 or 3.6, Obligations in
respect of all Tranche A-1 Revolver Loans shall accrue interest at a rate per
annum equal to the Base Rate (determined without reference to the Adjusted LIBOR
component of the Base Rate), plus the Applicable Margin for Base Rate Tranche
A-1 Revolver Loans.

 

(b)           During the occurrence and continuance of any Event of Default, at
the election of the Agent or the Required Lenders, Obligations shall bear
interest at the Default Rate.  Each Borrower acknowledges that the cost, expense
and risk to Agent and each Lender due to an Event of Default are difficult to
ascertain and that the Default Rate is a fair and reasonable estimate to
compensate Agent and Lenders for such added cost, expense and risk.

 

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(c)           Interest accrued on the Loans shall be due and payable in arrears,
(i) with respect to each Base Rate Tranche A Revolver Loan, on the first
Business Day of each month,; (ii) with respect to each LIBOR Loan, on the last
day of its Interest Period; provided that if any Interest Period for a LIBOR
Loan exceeds three months, interest accrued on such LIBOR Loan shall also be due
and payable on the respective dates that fall every three months after the
beginning of such Interest Period, (iii) on any date of prepayment, with respect
to the principal amount of Loans being prepaid; and (iv) with respect to anyBase
Rate Tranche A-l Revolver Loan, on the first Business Day of each month;
(iii) with respect to each LIBOR Tranche A Revolver Loan, on the last day of its
Interest Period; (iv) with respect to each LIBOR Tranche A-1 Revolver Loan, on
the last day of its Interest Period; (v) on any date of prepayment, with respect
to the principal amount of Loans being prepaid; (vi) with respect to any
voluntary termination or reduction of the Tranche A Revolver Commitments or the
Tranche A-1 Revolver Commitments, on the date of such termination or reduction
with respect to the principal amount of Tranche A Revolver Loans where the
commitment to make such Tranche A Revolver Loans is being terminated and (v) on
the Termination Date.  If any Interest Period for a LIBOR Loan exceeds three
months, interest accrued on such LIBOR Loan shall also be due and payable on the
respective dates that fall every three months after the beginning of such
Interest Period.  Interest accrued on any other Obligations shall be due and
payable as provided in the Loan Documents and, if no payment date is specified,
shall be due and payable on demand.  Notwithstanding the foregoing, interest
accrued at the Default Rate shall be due and payable on demand.

 

3.1.2.      Application of Adjusted LIBOR to Outstanding Loans.

 

(a)           Borrowers may on any Business Day, subject to delivery of a Notice
of Conversion/Continuation, elect to convert any portion of the Base Rate
Tranche A Revolver Loans to, or to continue any LIBOR Tranche A Revolver Loan at
the end of its Interest Period as, a LIBOR Tranche A Revolver Loan.  Borrowers
may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation, elect to convert any portion of the Base Rate Tranche
A-1 Revolver Loans to, or to continue any LIBOR Tranche A-1 Revolver Loan at the
end of its Interest Period as, a LIBOR Tranche A-1 Revolver Loan.  During the
occurrence and continuance of any Default or Event of Default, Agent may (and
shall at the direction of Required Lenders) declare that no Loan may be made,
converted or continued, as applicable, as a LIBOR Tranche A LIBOR Revolver
Loan.  During the occurrence and continuance of any Default or Event of Default,
Agent may (and shall at the direction of Required Lenders) declare that no Loan
may be made, converted or continued as a Tranche A-1 LIBORRevolver Loan or a
LIBOR Tranche A-1 Revolver Loan, as applicable.

 

(b)           Whenever Borrowers desire to convert or continue Loans as LIBOR
Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no
later than 11:00 a.m. at least three (3) Business Days before the requested
conversion or continuation date.  Promptly after receiving any such notice,
Agent shall notify each Tranche A Lender or Tranche A-1 Lender, as applicable,
thereof.  Each Notice of Conversion/Continuation shall be irrevocable, and shall
specify the aggregate principal amount of Loans to be converted or continued,
the conversion or continuation date (which shall be a Business Day), and the
duration of the Interest Period (which shall be deemed to be one month in the
case of Tranche A Revolver Loans if not specified).  If, upon the expiration of
any Interest Period in respect of any LIBOR Tranche A Revolver Loans, Borrowers
shall have failed to deliver a Notice of Conversion/Continuation, they shall be
deemed to have elected to convert such Loans into Base Rate Tranche A Revolver
Loans.  If, upon the expiration of any Interest Period in respect of anyFor the
avoidance of doubt, LIBOR Tranche A-1 Revolver Loans, Borrowers shall have
failed shall automatically continue as such Type without the need for Borrower
Agent to deliver a Notice of Conversion/Continuation, they shall be deemed to
have elected to convert such Loans into Base Rate Tranche A-1 Revolver Loans.

 

3.1.3.      Interest Periods.  In connection with the making, conversion or
continuation of any LIBOR Loans, Borrowers shall select an interest period (The
term “Interest Period”) to apply, which interest period shall be means, as to
each LIBOR Loan, the period commencing on the date such LIBOR Loan is disbursed
or converted to or continued as a LIBOR Loan and ending on the date one, two,
three or six

 

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months thereafter (in each case, subject to availability), as selected by the
Borrower Agent in its Notice of Borrowing or Notice of Conversion/Continuation,
as applicable; provided, however, that:

 

(a)           any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless, in
the case of a LIBOR Loan, such Business Day falls in another calendar month, in
which case such Interest Period shall end on the next preceding Business Day;

 

(b)           (a) theany Interest Period shall commence on the date the Loan is
made or continued as, or converted into, a LIBOR Loan, and shall expire on
thepertaining to a LIBOR Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at itsthe end;(b)      if any of such Interest Period commences
on a day for which there is no corresponding day in) shall end on the last
Business Day of the calendar month at its end or if such corresponding day falls
after the last Business Day of such month, then the Interest Period shall expire
on the last Business Day of such month; and if any Interest Period would expire
on a day that is not a Business Day, the period shall expire on the next
Business Daythe end of such Interest Period; and

 

(c)           no Interest Period shall extend beyond the Termination Date.

 

3.1.4.      Interest Rate Not Ascertainable.

 

(a)           If in connection with any request for a LIBOR Loan or a conversion
to or continuation thereof, (ai)  the Administrative Agent determines that (iA)
Dollar deposits are not being offered to banks in the London interbank market
for the applicable amount and Interest Period of such LIBOR Loan, or (iiB)
adequate and reasonable means do not exist for determining the Adjusted LIBOR
for any requested Interest Period with respect to a proposed LIBOR Loan or in
connection with an existing or proposed Base Rate Loan (in each case with
respect to clause (a)(i) above, “Impacted Loans”), or (b) the Agent or the
Required Lenders determine that for any reason the Adjusted LIBOR for any
requested Interest Period with respect to a proposed LIBOR Loan does not
adequately and fairly reflect the cost to such Lenders of funding such LIBOR
Loan, the Administrative Agent will promptly so notify the Borrower Agent and
each Lender and, in the case of clause (b) above, the Required Lenders shall
deliver a certificate to the Borrower Agent setting forth the basis on which
such Lenders have determined that the Adjusted LIBOR for the applicable Interest
Period does not adequately and fairly reflect the cost to such Lenders of
funding such proposed LIBOR Loan and certifying that such Lenders’ determination
is not inconsistent with their treatment of other borrowers generally. 
Thereafter, (x) the obligation of the Lenders to make or maintain LIBOR Loans
shall be suspended (to the extent of the affected LIBOR Loans or Interest
Periods), and (y) in the event of a determination described in the preceding
sentence with respect to the Adjusted LIBOR component of the Base Rate, the
utilization of the Adjusted LIBOR component in determining the Base Rate shall
be suspended, in each case until the Administrative Agent (upon the instruction
of the Required Lenders) revokes such notice.  Upon receipt of such notice, the
Borrowers may revoke any pending request for a Borrowing of, conversion to or
continuation of LIBOR Loans (to the extent of the affected LIBOR Loans or
Interest Periods) or, failing that, will be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.

 

(b)           Notwithstanding the foregoing, if the Agent has made the
determination described in clause (a)(i) of this Section, the Agent, in
consultation with the Borrowers and the affected Lenders, may establish an
alternative interest rate for the Impacted Loans, in which case, such
alternative rate of interest shall apply with respect to the Impacted Loans
until (1) the Agent revokes the notice delivered with respect to the Impacted
Loans under clause (a) of the first sentence of this Section, (2) the Agent or
the Required Lenders notify the Agent and the Borrowers that such alternative
interest rate does not adequately and fairly reflect the cost to such Lenders of
funding the Impacted Loans, or (3) any Lender determines that any Applicable Law
has made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for such Lender or its applicable Lending Office to make, maintain or
fund Loans whose interest is

 

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determined by reference to such alternative rate of interest or to determine or
charge interest rates based upon such rate or any Governmental Authority has
imposed material restrictions on the authority of such Lender to do any of the
foregoing and provides the Agent and the Borrowers written notice thereof.

 

3.2.         Fees.

 

3.2.1.      Unused Line Fee.  Borrowers shall pay to Agent (i) for the Pro Rata
benefit of the Tranche A Lenders, a fee equal to Unused Line Fee Rate then in
effect times the amount by which the Tranche A Revolver Commitments exceed the
average daily principal balance of Tranche A Revolver Loans and stated amount of
Letters of Credit during any month and (ii) for the Pro Rata benefit of the
Tranche A-1 Lenders, a fee equal to Unused Line Fee Rate then in effect times
the amount by which the Tranche A-1 Revolver Commitments exceed the average
daily principal balance of Tranche A-1 Revolver Loans during any month.  The
fees payable under this Section 3.2.1 shall be payable in arrears, on the first
Business Day of each month and on the Commitment Termination Date.

 

3.2.2.      LC Facility Fees.  Borrowers shall pay (a) to Agent, for the Pro
Rata benefit of the Tranche A Lenders, a fee equal to the Applicable Margin in
effect for LIBOR Tranche A Revolver Loans times the average daily stated amount
of Letters of Credit, which fee shall be payable monthly in arrears, on the
first Business Day of each month; provided, however, any such fee otherwise
payable for the account of a Defaulting Lender with respect to any Letter of
Credit as to which such Defaulting Lender has not provided Cash Collateral
satisfactory to the Issuing Bank shall be payable, to the maximum extent
permitted by Applicable Law, to the other Tranche A Lenders in accordance with
the upward adjustments in their respective Pro Rata shares allocable to such
Letter of Credit pursuant to Section 4.2, with the balance of such fee, if any,
payable to the Issuing Bank for its own account; (b) to each Issuing Bank, a
fronting fee, for the account of such Issuing Bank, with respect to each Letter
of Credit issued by such Issuing Bank in the amount agreed to between such
Issuing Bank and the Borrower Agent, which fee shall be payable upon issuance of
the Letter of Credit and on each anniversary date of such issuance, and shall be
payable on any increase in stated amount made between any such dates; and (c) to
Issuing Bank, for its own account, all customary charges associated with the
issuance, amending, negotiating, payment, processing, transfer and
administration of Letters of Credit, which charges shall be paid as and when
incurred.  During the occurrence and continuance of an Event of Default, at the
election of the Agent or the Required Lenders, the fee payable under clause
(a) shall be increased by 2% per annum.

 

3.2.3.      Agent Fees.  In consideration of Agent’s syndication of the
Commitments and service as Agent hereunder, Parent and Borrowers shall pay to
Agent, for its own account, the fees described in the Fee Letter.

 

3.2.4.      Tranche A-1 Prepayment Premium.  Upon the occurrence of any Tranche
A-1 Prepayment Premium Trigger Event, on the effective date of the prepayment or
deemed prepayment in connection therewith, the Borrowers shall pay to Agent, for
the Pro Rata benefit of the Tranche A-1 Lenders, an amount equal to the
applicable Tranche A-1 Prepayment Premium with respect to such Tranche A-1
Prepayment Premium Trigger Event.  Any Tranche A-1 Prepayment Premium payable in
accordance with this Section 3.2.4 shall be presumed to be equal to the
liquidated damages sustained by the Tranche A-1 Lenders as the result of the
occurrence of the applicable Tranche A-1 Prepayment Premium Trigger Event, and
the Borrowers agree that they are reasonable under the circumstances currently
existing.  The Tranche A-1 Prepayment Premium, if any, shall also be payable in
the event the Tranche A-1 Loans (and/or this Loan Agreement) are satisfied or
released by foreclosure (whether by power of judicial proceeding), deed in lieu
of foreclosure or by any other means.  THE BORROWERS EXPRESSLY WAIVE THE
PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR
MAY PROHIBIT THE COLLECTION OF THE FOREGOING TRANCHE A-1 PREPAYMENT PREMIUM IN
CONNECTION WITH ANY ACCELERATION OF THE TRANCHE A-1 REVOLVER LOANS.  The
Borrowers expressly agree that (a) the Tranche A-1 Prepayment Premium is
reasonable and is the product of an arm’s length transaction between
sophisticated business people, ably represented by counsel, (b) the

 

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Tranche A-1 Prepayment Premium shall be payable notwithstanding the then
prevailing market rates at the time payment is made, (c) there has been a course
of conduct between Tranche A-1 Lenders and the Borrowers giving specific
consideration in this transaction for such agreement to pay the Tranche A-1
Prepayment Premium, (d) the Borrowers shall be estopped hereafter from claiming
differently than as agreed to in this Section 3.2.4, (e) their agreement to pay
the Tranche A-1 Prepayment Premium is a material inducement to the Tranche A-1
Lenders to make the Tranche A-1 Revolver Loans, and (f) the Tranche A-1
Prepayment Premium represents a good faith, reasonable estimate and calculation
of the lost profits or damages of the Tranche A-1 Lenders and that it would be
impractical and extremely difficult to ascertain the actual amount of damages to
the Tranche A-1 Lenders or profits lost by the Tranche A-1 Lenders as a result
of such Tranche A-1 Prepayment Premium Trigger Event.

 

3.3.         Computation of Interest, Fees, Yield Protection.  All computations
of interest for Base Rate Loans shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed.  All other computation of
interest, as well as fees and other charges calculated on a per annum basis,
shall be computed for the actual days elapsed, based on a year of 360 days. 
Each determination by Agent of any interest, fees or interest rate hereunder
shall be final, conclusive and binding for all purposes, absent error.  All fees
shall be fully earned when due and shall not be subject to rebate or refund, nor
subject to proration except as specifically provided herein.  All fees payable
under Section 3.2 are compensation for services and are not, and shall not be
deemed to be, interest or any other charge for the use, forbearance or detention
of money.  A certificate as to amounts payable by Borrowers under Section 3.4,
3.6, 3.7, 3.9 or 5.8, submitted to Borrowers by Agent or the affected Lender, as
applicable, shall be final, conclusive and binding for all purposes, absent
error.

 

3.4.         Reimbursement Obligations.  Borrowers shall reimburse Agent and
each Co-Collateral Agent for all Extraordinary Expenses.  Borrowers shall also
reimburse Agent for all reasonable and documented legal fees of one outside
counsel, one local counsel in each relevant jurisdiction (as determined by the
Agent in its reasonable discretion), one special or regulatory counsel in
respect of each matter (as reasonably required by the Agent) and one conflict of
interest counsel (as determined by the Agent in its reasonable discretion),
accounting, appraisal, consulting and other reasonable and documented fees,
out-of-pocket costs and expenses incurred by it in connection with
(a) syndication, negotiation and preparation of any Loan Documents, including
any amendment or other modification thereof; (b) administration of and actions
relating to any Collateral, Loan Documents, and transactions contemplated
thereby, including any actions taken to perfect or maintain priority of Agent’s
Liens on any Collateral, to maintain any insurance required hereunder or to
verify Collateral; and (c) subject to the limits of Section 10.1.1(b), each
inspection, audit or appraisal with respect to any Obligor or Collateral,
whether prepared by Agent’s personnel or a third party.  Borrowers shall also
reimburse Lenders for all costs and expenses incurred by them (but limited to
legal fees of one outside counsel for all Lenders, one local counsel in each
relevant jurisdiction (as determined by the Lenders in their reasonable
discretion), one special or regulatory counsel in respect of each matter (as
reasonably required by the Lenders) and one conflict of interest counsel (as
determined by any Lender in its reasonable discretion)) during the occurrence
and continuance of an Event of Default in connection with the enforcement or
preservation of any rights under this Loan Agreement or any of the other Loan
Documents.  Borrowers shall also reimburse each Co-Collateral Agent for all
reasonable and documented legal fees of one outside counsel incurred by it in
connection with (a) syndication, negotiation and preparation of any Loan
Documents, including any amendment, waiver, consent, supplement, restatement or
other modification thereof or thereto; and (b) administration and enforcement of
and actions relating to any Collateral, Loan Documents, and transactions
contemplated thereby. Borrowers shall also reimburse the Tranche A-1
Documentation Agent for all reasonable and documented legal fees of one outside
counsel incurred by it on behalf of the Tranche A-1 Lenders in connection with
any Insolvency Proceeding or after the occurrence and during the continuance of
an Event of Default under (i) Section 11.1(a) or (ii) Section 11.1(c) (in the
case of this clause (ii) as a result of a failure to comply with Section 8.1,
Section 10.1.2(n), Section 10.1.2(o), or Section 10.3).  All amounts
reimbursable by Borrowers under this Section 3.4 shall constitute Obligations
secured by the Collateral and shall be payable within ten

 

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Business Days after presentation by Agent to Borrowers of a reasonably detailed
itemization of such amounts.

 

3.5.         Illegality.  Notwithstanding anything to the contrary herein, if
(a) any change in any law or interpretation thereof made after the date hereof,
by any Governmental Authority makes it unlawful for a Lender to make or maintain
a LIBOR Loan or to maintain any Commitment with respect to LIBOR Loans or (b) a
Lender determines that the making or continuance of a LIBOR Loan has become
impracticable as a result of a circumstance that adversely affects the London
interbank market or the position of such Lender in such market, then such Lender
shall give notice thereof to Agent and Borrowers and may (i) declare that LIBOR
Loans will not thereafter be made by such Lender, whereupon (x) whereif such
Lender is a Tranche A Lender any request for a LIBOR Tranche A Revolver Loan
from such Lender shall be deemed to be a request for a Base Rate Tranche A
Revolver Loan and (y) where such Lender is a Tranche A-1 Lender any request for
a LIBOR Tranche A-1 Revolver Loan from such Lender shall be deemed to be a
request for a Base Rate Tranche A-1 Revolver Loan unless such Lender’s
declaration has been withdrawn (and it shall be withdrawn promptly upon
cessation of the circumstances described in clause (a) or (b) above); and/or
(ii) (x) where such Lender is a Tranche A Lender, require that all outstanding
LIBOR Tranche A Revolver Loans made by such Lender be converted to Base Rate
Tranche A Revolver Loans immediately, in which event all outstanding LIBOR
Tranche A Revolver Loans of such Lender shall be immediately converted to Base
Rate Tranche A Revolver Loans and (y) where such Lender is a Tranche A-1 Lender,
require that all outstanding LIBOR Tranche A-1 Revolver Loans made by such
Lender be converted to Base Rate Tranche A-1 Revolver Loans immediately, in
which event all outstanding LIBOR Tranche A-1 Revolver Loans of such Lender
shall be immediately converted to Base Rate Tranche A-1 Revolver Loans, with the
interest rate calculated as provided in Section 3.1.1(a).  If any such notice
asserts the illegality of such Lender determining or charging interest rates
based upon Adjusted LIBOR, the Agent shall during the period of such suspension
compute the Base Rate applicable to such Lender without reference to the
Adjusted LIBOR component thereof until the Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge
interest rates based upon Adjusted LIBOR.  Upon any such prepayment or
conversion, the Borrowers shall also pay accrued interest on the amount so
prepaid or converted.  Notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests,
regulations, rules, guidelines and directives promulgated thereunder and (y) all
requests, rules, guidelines or directives promulgated by the Bank for
International settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States regulatory authorities, in
each case pursuant to Basel III, shall, in each case, be deemed to have been
adopted after the date hereof, regardless of the date enacted, adopted or
issued.

 

3.6.         Increased Costs.  If, by reason of (a) the introduction of or any
change (including any change by way of imposition or increase of Statutory
Reserves or other reserve requirements) in any law or interpretation thereof, in
each case made after the date hereof, or (b) the compliance with any guideline
or request from any Governmental Authority or other Person exercising control
over banks or financial institutions generally (whether or not having the force
of law), promulgated after the date hereof:

 

(i)            a Lenderany Recipient shall be subject to any TaxTaxes with
respect to any LIBOR Loan or Letter of Credit or its obligation to make LIBOR
Loans, issue Letters of Credit or participate in LC Obligations or its deposits,
reserves, other liabilities or capital attributable thereto, or a change shall
result in the basis of taxation of any payment to a Lenderany Recipient with
respect to its LIBOR Loans or its obligation to make LIBOR Loans, issue Letters
of Credit or participate in LC Obligations (except forother than (x) Indemnified
Taxes, (y) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (z) Connection Income Taxes and subject to
SectionsSection 5.8 and 5.9); or

 

(ii)           any reserve (including any imposed by the Board of Governors),
special deposits or similar requirement against assets of, deposits with or for
the account of, or credit extended by, a Lenderany Recipient shall be imposed or
deemed applicable, or any other condition

 

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affecting a Lenderany Recipient’s LIBOR Loans or obligation to make LIBOR Loans,
issue Letters of Credit or participate in LC Obligations shall be imposed on
such LenderRecipient or the London interbank market;

 

and as a result there shall be a material increase in the cost to such Lender of
agreeing to make or making, funding or maintaining LIBOR Loans, Letters of
Credit or participations in LC Obligations (except to the extent already
included in determination of Adjusted LIBOR), or there shall be a reduction in
the amount receivable by such Lender, then the Lender shall promptly notify
Borrowers and Agent of such event, and Borrowers shall, within five (5) Business
Days following demand therefor, pay such Lender the amount of such increased
costs or reduced amounts; provided, however, that such Lender shall repay to
Borrowers any amounts paid by Borrowers to such Lender under this Section 3.6 at
any time such Lender shall determine that such change or compliance was not
applicable to, or required by, such Lender.

 

If a Lender determines that, because of circumstances described above or any
other circumstances arising hereafter affecting such Lender, the London
interbank market or the Lender’s position in such market, Adjusted LIBOR or its
Applicable Margin, as applicable, will not adequately and fairly reflect the
cost to such Lender of funding or maintaining LIBOR Loans, issuing Letters of
Credit or participating in LC Obligations, then (A) the Lender shall promptly
notify Borrowers and Agent of such event; (B) such Lender’s obligation to make
or maintain LIBOR Loans, issue Letters of Credit or participate in LC
Obligations shall be immediately suspended, until each condition giving rise to
such suspension no longer exists; and (C) (x) where such Lender is a Tranche A
Lender such Lender shall make a Base Rate Tranche A Revolver Loan as part of any
requested Borrowing of LIBOR Tranche A Revolver Loans, which Base Rate Tranche A
Revolver Loan shall, for all purposes, be considered part of such Borrowing and
(y) where such Lender is a Tranche A-1 Lender, such Lender shall make a’s
outstanding Tranche A-1 Revolver Loans shall bear interest as if such Loans are
Base Rate Tranche A-1 Revolver Loan as part of any requested Borrowing of LIBOR
Tranche A-1 Revolver Loans, which Base Rate Tranche A-1 Revolver Loan shall, for
all purposes, be considered part of such BorrowingLoans, with the interest rate
calculated as provided in Section 3.1.1(a).

 

Within fifteen (15) days after receipt by Borrower Agent of written notice
and/or demand from any Lender (an “Affected Lender”) (i) stating that, pursuant
to Section 3.5, that such Lender can no longer make LIBOR Loans or
(ii) demanding payment of additional amounts or increased costs pursuant to
Section 3.6, Borrower Agent may, at its option, notify Agent and such Affected
Lender of its intention to replace the Affected Lender.  So long as no Default
or Event of Default shall have occurred and be continuing, Borrower Agent may
obtain, at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for
the Affected Lender, which Replacement Lender must be an Eligible Assignee.  If
Borrowers obtain a Replacement Lender within ninety (90) days following notice
of their intention to do so, the Affected Lender must sell and assign its Loans
and Commitments to such Replacement Lender for an amount equal to the principal
balance of all Loans held by the Affected Lender and all accrued interest and
fees with respect thereto through the date of such sale; provided that Borrowers
shall have reimbursed such Affected Lender for the additional amounts or
increased costs that it is entitled to receive under this Loan Agreement through
the date of such sale and assignment.  Notwithstanding the foregoing, Borrowers
shall not have the right to obtain a Replacement Lender if the Affected Lender
(i) in the case of a notice under Section 3.5, rescinds its notice that it can
no longer fund LIBOR Loans or (ii) in the case of a demand under Section 3.6,
rescinds its demand for increased costs or additional amounts, within fifteen
(15) days following its receipt of Borrower Agent’s notice of intention to
replace such Affected Lender.  Furthermore, if Borrower Agent gives a notice of
intention to replace and do not so replace such Affected Lender within ninety
(90) days thereafter, Borrowers’ rights under this paragraph as to such noticed
replacement shall terminate.

 

3.7.         Capital Adequacy.  If a Lender determines that any introduction of
or any change in a Capital Adequacy Regulation, any change in the interpretation
or administration of a Capital Adequacy Regulation by a Governmental Authority
charged with interpretation or administration thereof, or any compliance by such
Lender or any Person controlling such Lender with a Capital Adequacy Regulation,
in

 

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each case made after the date hereof, increases the amount of capital required
or expected to be maintained by such Lender or Person (taking into consideration
its capital adequacy policies and desired return on capital) as a consequence of
such Lender’s Commitments, Loans, participations in LC Obligations or other
obligations under the Loan Documents, then Borrowers shall, within five
(5) Business Days following demand therefor, pay such Lender an amount
sufficient to compensate for such increase.  A Lender’s demand for payment shall
set forth the nature of the occurrence giving rise to such compensation and a
calculation of the amount to be paid.  In determining such amount, the Lender
may use any reasonable averaging and attribution method.

 

3.8.         Mitigation.  Each Lender agrees that, upon becoming aware that it
is subject to Section 3.5, 3.6, 3.7 or 5.8, it will take reasonable measures to
reduce Borrowers’ obligations under such Sections, including funding or
maintaining its Commitments or Loans through another office, as long as use of
such measures would not adversely affect the Lender’s Commitments, Loans,
business or interests, and would not be inconsistent with any applicable legal
or regulatory restriction.

 

3.9.         Funding Losses.  If for any reason (other than default by a Lender)
(a) any Borrowing of, or conversion to or continuation of, a LIBOR Loan does not
occur on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of a LIBOR Loan occurs on a day other than the end of its Interest
Period, or (c) Borrowers fail to repay a LIBOR Loan when required hereunder,
then Borrowers shall pay to Agent its customary administrative charge and to
each Lender all losses and expenses that it sustains as a consequence thereof,
including any loss or expense arising from liquidation or redeployment of funds
or from fees payable to terminate deposits of matching funds, but excluding any
loss of profits in connection therewith.  Lenders shall not be required to
purchase Dollar deposits in the London interbank market or any other offshore
Dollar market to fund any LIBOR Loan, but the provisions hereof shall be deemed
to apply as if each Lender had purchased such deposits to fund its LIBOR Loans.

 

3.10.       Maximum Interest.  In no event shall interest, charges or other
amounts that are contracted for, charged or received by Agent and Lenders
pursuant to any Loan Documents and that are deemed interest under Applicable Law
(“interest”) exceed the highest rate permissible under Applicable Law (“maximum
rate”).  If, in any month, any interest rate, absent the foregoing limitation,
would have exceeded the maximum rate, then the interest rate for that month
shall be the maximum rate and, if in a future month, that interest rate would
otherwise be less than the maximum rate, then the rate shall remain at the
maximum rate until the amount of interest actually paid equals the amount of
interest which would have accrued if it had not been limited by the maximum
rate.  If, upon payment in full, in cash, of the Obligations, the total amount
of interest actually paid under the Loan Documents is less than the total amount
of interest that would, but for this Section 3.10, have accrued under the Loan
Documents, then Borrowers shall, to the extent permitted by Applicable Law, pay
to Agent, for the account of Lenders, (a) the lesser of (i) the amount of
interest that would have been charged if the maximum rate had been in effect at
all times, or (ii) the amount of interest that would have accrued had the
interest rate otherwise set forth in the Loan Documents been in effect, minus
(b) the amount of interest actually paid under the Loan Documents.  If a court
of competent jurisdiction determines that Agent or any Lender has received
interest in excess of the maximum amount allowed under Applicable Law, such
excess shall be deemed received on account of, and shall automatically be
applied to reduce, Obligations other than interest (regardless of any erroneous
application thereof by Agent or any Lender), and upon payment in full, in cash
of the Obligations, any balance shall be refunded to Borrowers.  In determining
whether any excess interest has been charged or received by Agent or any Lender,
all interest at any time charged or received from Borrowers in connection with
the Loan Documents shall, to the extent permitted by Applicable Law, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Obligations.

 

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SECTION 4.        LOAN ADMINISTRATION

 

4.1.         Manner of Borrowing and Funding Loans.

 

4.1.1.      Notice of Borrowing.

 

(a)           Whenever Borrowers desire funding of a Borrowing of Loans,
Borrower Agent shall give Agent a Notice of Borrowing.  Such notice must be
received by Agent no later than 12:00 noon (i) on the Business Day of the
requested funding date, in the case of Base Rate Loans, and (ii) at least three
Business Days prior to the requested funding date, in the case of LIBOR Loans. 
Notices received after 12:00 noon shall be deemed received on the next Business
Day.  Each Notice of Borrowing shall be irrevocable and shall specify (A) the
principal amount of the Borrowing, (B) the requested funding date (which must be
a Business Day and, in the case of Tranche A-1 Revolver Loans, must be the
Fourth Amendment Closing Date), (C) whether the Borrowing is to be made as Base
Rate Tranche A Revolver Loans, Base Rate Tranche A-1 Revolver Loans, LIBOR
Tranche A Revolver Loans or LIBOR Tranche A-1 Revolver Loans, and (D) in the
case of LIBOR Loans, the duration of the applicable Interest Period (which shall
be deemed to be one month in the case of Tranche A Revolver Loans if not
specified).

 

(b)           Unless payment is otherwise timely made by Borrowers, the becoming
due of any Obligations (whether principal, interest (including, to the extent
permitted by law, interest not paid when due), fees or other charges, including
Extraordinary Expenses, LC Obligations, Cash Collateral and Bank Product Debt)
shall be deemed to be a request for Base Rate Tranche A Revolver Loans on the
due date, in the amount of such Obligations.  Such Base Rate Loans shall be Base
Rate Tranche A-1 Revolver Loans so long as there is any Tranche A-1 Excess
Availability and thereafter shall be Base Rate Tranche A Revolver Loans.

 

(c)           If Borrowers establish a controlled disbursement account with
Agent or any Affiliate of Agent, then the presentation for payment of any check
or other item of payment drawn on such account at a time when there are
insufficient funds to cover it shall be deemed to be, on the date of such
presentation, in the amount of the check and items presented for payment, a
request for Base Rate Tranche A-1 Revolver Loans to the extent that there exists
sufficient Tranche A-1 Excess Availability therefore and thereafter shall be
deemed to be a request for Base Rate Tranche A Revolver Loans.  The proceeds of
such Loans may be disbursed directly to the controlled disbursement account or
other appropriate account.

 

4.1.2.      Fundings by Lenders.  Each Tranche A Lender shall timely honor its
Tranche A Revolver Commitment by funding its Pro Rata share of each Borrowing of
Tranche A Revolver Loans that is properly requested hereunder and each
Tranche A-1 Lender shall timely honor its Tranche A-1 Revolver Commitment by
funding its Pro Rata share of each Borrowing of Tranche A-1 Revolver Loans that
is properly requested hereunder.  Except for Borrowings to be made as Swingline
Loans, Agent shall endeavor to notify Lenders of each Notice of Borrowing (or
deemed request for a Borrowing) by 12:00 noon on the proposed funding date for
Base Rate Loans or by 3:00 p.m. at least three Business Days before any proposed
funding of LIBOR Loans.  Each Lender shall fund to Agent such Lender’s Pro Rata
share of the Borrowing to the account specified by Agent in immediately
available funds not later than 2:00 p.m. on the requested funding date, unless
Agent’s notice is received after the times provided above, in which event Lender
shall fund its Pro Rata share by 11:00 a.m. on the next Business Day.  Subject
to its receipt of such amounts from Lenders, Agent shall disburse the proceeds
of the Loans as directed by Borrower Agent.  Unless Agent shall have received
(in sufficient time to act) written notice from a Lender that it does not intend
to fund its Pro Rata share of a Borrowing, Agent may assume that such Lender has
deposited or promptly will deposit its share with Agent, and Agent may disburse
a corresponding amount to Borrowers.  If a Lender’s share of any Borrowing is
not in fact received by Agent, then Borrowers agree to repay to Agent on demand
the amount of such share, together with interest thereon from the date disbursed
until repaid, at the rate applicable to such Borrowing.  If any Lender makes
available to the Agent funds for any Loan to be made by such Lender as provided
in this Loan Agreement, and such funds are not made available to the Borrowers

 

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by the Agent because the conditions to the applicable credit extension set forth
in Section 6 are not satisfied or waived in accordance with the terms hereof,
the Agent shall return such funds (in like funds as received from such Lender)
to such Lender, without interest.

 

4.1.3.      Swingline Loans; Settlement.

 

(a)           In reliance upon the agreements of the other Lenders set forth in
this Section 4.1.3, Agent may, in its sole and absolute discretion (unless Agent
has knowledge that the conditions set forth in Section 6.2 have not been met),
advance Swingline Loans to Borrowers out of Agent’s own funds, up to an
aggregate outstanding amount of $75,000,000, unless the funding is specifically
required to be made by all Lenders hereunder.  Each Swingline Loan shall
constitute a Base Rate Tranche A Revolver Loan for all purposes, except that
payments thereon shall be made to Agent for its own account.  The obligation of
Borrowers to repay Swingline Loans shall be evidenced by the records of Agent
and need not be evidenced by any promissory note.  If the Agent shall elect not
to fund a requested Swingline Loan for any reason, the Agent shall notify the
Borrower Agent of such election after the receipt of the borrowing notice in
respect of such Swingline Loan.

 

(b)           To facilitate administration of the Loans, Tranche A Lenders and
Agent agree (which agreement is solely among them, and not for the benefit of or
enforceable by any Borrower) that settlement among them with respect to
Swingline Loans and other Tranche A Revolver Loans may take place periodically
on a date determined from time to time by Agent, which shall occur at least once
every week.  On each settlement date, settlement shall be made with each Lender
in accordance with the Settlement Report delivered by Agent to Tranche A
Lenders.  Between settlement dates, Agent may in its discretion apply payments
on Loans to Swingline Loans, regardless of any designation by Borrower or any
provision herein to the contrary.  Each Tranche A Lender’s obligation to make
settlements with Agent is absolute and unconditional, without offset,
counterclaim or other defense, and whether or not the Tranche A Commitments have
terminated, a Tranche A Overadvance exists, or the conditions in Section 6 are
satisfied.  If, due to an Insolvency Proceeding with respect to a Borrower or
otherwise, any Swingline Loan may not be settled among Tranche A Lenders
hereunder, then each Tranche A Lender shall be deemed to have purchased from
Agent a Pro Rata participation in each unpaid Swingline Loan and shall transfer
the amount of such participation to Agent, in immediately available funds,
within one Business Day after Agent’s request therefor.

 

4.1.4.      Notices.  Each Borrower authorizes Agent and Lenders to extend,
convert or continue Loans, effect selections of interest rates, and transfer
funds to or on behalf of Borrowers based on telephonic or other e-mailed,
electronic or internet-based instructions in form, in each case, acceptable to
the Agent and the Borrower Agent.  Borrower Agent shall confirm each such
request by prompt delivery to Agent of a Notice of Borrowing or Notice of
Conversion/Continuation, if applicable, but if it differs in any material
respect from the action taken by Agent or Lenders, the records of Agent and
Lenders shall govern.  Neither Agent nor any Lender shall have any liability for
any loss suffered by a Borrower as a result of Agent or any Lender acting upon
its understanding of telephonic or other e-mailed, electronic or internet-based
instructions in form, in each case, reasonably acceptable to the Agent and the
Borrowers, from a person believed in good faith by Agent or any Lender to be a
person authorized to give such instructions on a Borrower’s behalf.

 

4.2.         Defaulting Lender.

 

4.2.1.      If a Lender is a Defaulting Lender, Agent may (but shall not be
required to), in its discretion, retain payments that would otherwise be made to
such Defaulting Lender hereunder, apply the payments to such Lender’s defaulted
obligations or readvance the funds to Borrowers in accordance with this Loan
Agreement.  The failure of any Lender to fund a Loan or to make a payment in
respect of a LC Obligation shall not relieve any other Lender of its obligations
hereunder, and no Lender shall be responsible for default by another Lender. 
Lenders and Agent agree (which agreement is solely among

 

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them, and not for the benefit of or enforceable by any Borrower) that, solely
for purposes of determining a Defaulting Lender’s right to vote on matters
relating to the Loan Documents and to share in payments, fees and Collateral
proceeds thereunder, a Defaulting Lender shall not be deemed to be a “Lender”
until all its defaulted obligations have been cured to the satisfaction of the
Agent, the Borrower Agent and the Issuing Bank.

 

4.2.2.      Notwithstanding anything to the contrary contained in this Loan
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:

 

(a)           That Defaulting Lender (x) shall not be entitled to receive any
unused line fee pursuant to Section 3.2.1 for any period during which that
Lender is a Defaulting Lender (and the Borrower shall not be required to pay any
such fee that otherwise would have been required to have been paid to that
Defaulting Lender) and (y) shall be limited in its right to receive LC Facility
fees as provided in Section 3.2.2(a).

 

(b)           During any period in which there is a Defaulting Lender, for
purposes of computing the amount of the obligation of each non-Defaulting Lender
to acquire, refinance or fund participations in Letters of Credit or Swingline
Loans pursuant to Section 3.2.2(a) or Section 4.1, the “Pro Rata” share or
participation of each non-Defaulting Lender shall be computed without giving
effect to the Tranche A Revolver Commitment of that Defaulting Lender; provided,
that, (i) each such reallocation shall be given effect only if, at the date the
applicable Lender becomes a Defaulting Lender, no Default or Event of Default
exists; and (ii) the aggregate obligation of each non-Defaulting Tranche A
Lender to acquire, refinance or fund participations in Letters of Credit and
Swingline Loans shall not exceed the positive difference, if any, of (1) the
Tranche A Revolver Commitment of that non-Defaulting Lender minus (2) the
aggregate Outstanding Amount of the Tranche A Revolver Loans of that Lender. 
Subject to Section 14.21, no reallocation hereunder shall constitute a waiver or
release of any claim of any party hereunder against a Defaulting Lender arising
from that Lender having become a Defaulting Lender, including any claim of a
non-Defaulting Lender as a result of such non-Defaulting Lender’s increased
exposure following such reallocation.

 

4.3.         Number and Minimum Amount of LIBOR Loans; Determination of Rate. 
For ease of administration, all LIBOR Tranche A Revolver Loans having the same
length and beginning date of their Interest Periods shall be aggregated
together, and such Loans shall be allocated among Tranche A Lenders or Tranche
A-1 Lenders on a Pro Rata basis and.  For the avoidance of doubt, all LIBOR
Tranche A-1 Revolver Loans havingshall have the same length and beginning date
of their Interest Periods shall be aggregated together, and such Loans shall be
allocated among Tranche A-1 Lenders on a Pro Rata basis.  No more than ten LIBOR
Tranche A Revolver Loans and LIBOR Tranche A-1 Revolver Loans, in the aggregate,
may be outstanding at any time, and eachInterest Period.  Each aggregate LIBOR
Loan when made, continued or converted shall be in a minimum amount of
$10,000,000, or an increment of $1,000,000 in excess thereof.  No more than ten
(10) LIBOR Loans, in the aggregate, may be outstanding at any time.  Upon
determining Adjusted LIBOR for any Interest Period requested by Borrower Agent,
Agent shall promptly notify Borrowers thereof by telephone or electronically
and, if requested by Borrower Agent, shall confirm any telephonic notice in
writing.

 

4.4.         Borrower Agent.  Each Borrower hereby designates Bon-Ton (“Borrower
Agent”) as its representative and agent for all purposes under the Loan
Documents, including requests for Loans and Letters of Credit, designation of
interest rates, delivery or receipt of communications with Agent, Issuing Bank
or any Lender, preparation and delivery of Borrowing Base Certificates and
financial reports, receipt and payment of Obligations, requests for waivers,
amendments or other accommodations, actions under the Loan Documents (including
in respect of compliance with covenants), and all other dealings with
Agent, Issuing Bank or any Lender.  Borrower Agent hereby accepts such
appointment.  Agent and Lenders shall be entitled to rely upon, and shall be
fully protected in relying upon, any notice or communication (including

 

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any notice of borrowing) delivered by Borrower Agent on behalf of any Borrower. 
Agent and Lenders may give any notice or communication with a Borrower hereunder
to Borrower Agent on behalf of such Borrower.  Agent shall have the right, in
its discretion, to deal exclusively with Borrower Agent for any or all purposes
under the Loan Documents.  Each Borrower agrees that any notice, election,
communication, representation, agreement or undertaking made on its behalf by
Borrower Agent shall be binding upon and enforceable against it.  Any notice,
certificate or other communication under this Loan Agreement or any other Loan
Document that is required, permitted or contemplated to be delivered by a
Borrower or the Borrowers may instead be delivered by the Borrower Agent.

 

4.5.         One Obligation.  The Loans, LC Obligations and other Obligations
shall constitute one general obligation of Borrowers and (unless otherwise
expressly provided in any Loan Document) shall be secured by Agent’s Lien upon
all Collateral; provided, however, that Agent and each Lender shall be deemed to
be a creditor of, and the holder of a separate claim against, each Borrower to
the extent of any Obligations jointly or severally owed by such
BorrowerReserved.

 

4.6.         Effect of Termination.  On the effective date of any termination of
the Commitments, all Obligations shall be immediately due and payable, and any
Lender may terminate its and its Affiliates’ Bank Products (including, with the
consent of Agent, any Cash Management Services).  All undertakings of Borrowers
contained in the Loan Documents shall survive any termination, and Agent shall
retain its Liens in the Collateral and all of its rights and remedies under the
Loan Documents until the occurrence of payment in full, in cash, of all accrued
and unpaid principal, interest and fees, and any other Obligations then due and
owing, the payment of any appropriate collateral deposits in connection with
other Obligations and the occurrence of the Commitment Termination Date. 
Notwithstanding such payment in full, in cash, of all accrued and unpaid
principal, interest and fees, and any other Obligations then due and owing, the
payment of any appropriate collateral deposits in connection with other
Obligations and the occurrence of the Commitment Termination Date, Agent shall
not be required to terminate its Liens in any Collateral unless, with respect to
any damages Agent may incur as a result of the dishonor or return of Payment
Items applied to Obligations, Agent receives (a) a written agreement, executed
by Borrowers and any Person whose advances are used in whole or in part to
satisfy the Obligations, indemnifying Agent and Lenders from any such damages;
or (b) such Cash Collateral as Agent, in its discretion, deems reasonably
necessary to protect against any such damages.  The provisions of Sections 2.3,
3.4, 3.6, 3.7, 3.9, 5.4, 5.8, 12, and 14.2, and the obligation of each Obligor
and Lender with respect to each indemnity given by it in any Loan Document,
shall survive Full Payment of the Obligations and any release relating to this
credit facility.

 

SECTION 5.        PAYMENTS

 

5.1.         General Payment Provisions.  All payments of Obligations shall be
made in Dollars, without condition, deduction, offset, counterclaim or defense
of any kind, free and clear of (and without deduction for) any Taxes, and in
immediately available funds, not later than 2:00 p.m. on the due date.  Any
payment after such time shall be deemed made on the next Business Day. 
Borrowers may, at the time of payment, specify to Agent the Obligations to which
such payment is to be applied, but Agent shall in all events retain the right to
apply such payment in such manner as Agent, subject to the provisions hereof
(including, without limitation, Section 5.5), may determine to be appropriate. 
If any payment under the Loan Documents shall be stated to be due on a day other
than a Business Day, the due date shall be extended to the next Business Day and
such extension of time shall be included in any computation of interest and
fees.  AnyEach payment of Loans shall be accompanied by the payment of accrued
interest to the date of such payment on the amount repaid or prepaid, any
payment of a LIBOR Loan prior to the end of its Interest Period shall be
accompanied by all amounts due under Section 3.9.  Any prepayment of the Tranche
A Revolver LoanLoans shall be applied first to Base Rate Tranche A Revolver
Loans and then to LIBOR Tranche A Revolver Loans.  Any prepayment of the Tranche
A-1 Revolver LoanLoans shall be applied first to Base Rate Tranche A-1 Revolver
Loans and then to LIBOR Tranche A-1 Revolver Loans.  For the avoidance of any
doubt, all payments of principal, interest, fees or other amounts owing to the
Tranche A-1 Lenders shall be made to the Agent for application to the Tranche
A-1 Revolver Loans in accordance

 

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with the terms of this Loan Agreement.  Unless the Agent shall have received
notice from the Borrower Agent prior to the time at which any payment is due to
the Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrowers will not make such payment, the Agent may assume that the Borrowers
have made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders or the Issuing Bank, as the case
may be, the amount due.  In such event, if the Borrowers have not in fact made
such payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Agent forthwith on demand the amount so
distributed to such Lender or the Issuing Bank, in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Agent, at the
greater of the Federal Funds Rate and a rate determined by the Agent in
accordance with banking industry rules on interbank compensation.  Any payments
of Loans shall be made in accordance with the terms of this Loan Agreement,
including Sections 5.1, 5.2 and 5.5.

 

5.2.         Repayment of Loans.  The Loans shall be due and payable in full on
the Termination Date, unless payment is sooner required hereunder.  The Loans
may be prepaid in accordance with Section 5.1.

 

5.2.1.      Voluntary Prepayments of Loans.

 

(a)           Voluntary Prepayments of Tranche A Revolver Loans.  Borrowers may,
upon notice from Borrower Agent to Agent, prepay the Tranche A Revolver Loans in
whole or in part without premium or penalty, on a Pro Rata basis for each
Tranche A Lender.  Any such notice must be in a form acceptable to Agent and
received by Agent not later than 12:00 p.m. on the date of prepayment of Tranche
A Revolver Loans.  Any such notice shall specify the date and amount of such
prepayment and the Type(s) of Tranche A Revolver Loans to be prepaid and, if
LIBOR Tranche A Revolver Loans are to be prepaid, the Interest Period(s) of such
Loans, and shall be irrevocable once given unless such notice is conditioned
upon the effectiveness of other financing arrangements in which case such notice
may be revoked if such condition is not satisfied.  Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Pro Rata share of such prepayment.

 

(b)           Voluntary Prepayments of Tranche A-1 Revolver Loans.  Borrowers
may, upon notice from Borrower Agent to Agent, prepay the Tranche A-1 Revolver
Loans in whole or in part, on a Pro Rata basis for each Tranche A-1 Lender, so
long as (i) no Tranche A Revolver Loans or LC Obligations are outstanding as of
the date of such prepayment (unless, in the case of LC Obligations, such LC
Obligations have been fully Cash Collateralized), (ii) Excess Availability as of
the date of such prepayment is greater than or equal to twenty-five percent
(25%) of the Tranche A Borrowing Base as of the date of such prepayment,
(iii) no Default or Event of Default exists or would result from such
prepayment, (iv) Borrower Agent shall have delivered to Agent a Borrowing Base
Certificate, in form and substance reasonably satisfactory to Agent,
demonstrating that average Excess Availability for the twelve-month period
following such prepayment, calculated on a pro forma basis after giving effect
to such prepayment and determined as of the last day of each fiscal month during
such twelve-month period, will be greater than or equal to twenty-five percent
(25%) of the Tranche A Borrowing Base as of the last day of each fiscal month
during such twelve-month period, and (v) a Senior Officer of Borrower Agent
shall have delivered to Agent a certificate, in form and substance reasonably
satisfactory to Agent, certifying compliance with the foregoing conditions,
together with such other information as may be reasonably requested by Agent to
demonstrate compliance with the foregoing conditions.  Any such notice must be
in a form acceptable to Agent and received by Agent not later than 11:00
a.m. five (5) Business Days prior to any date of prepayment.  Any such notice
shall specify the date and amount of such prepayment, and shall be irrevocable
once given unless such notice is conditioned upon the effectiveness of other
financing arrangements in which case such notice may be revoked if such
condition is not satisfied.  Each such prepayment of Tranche A-1 Revolver Loans
shall be in a minimum amount of $5,000,000, or an increment of $1,000,000 in
excess thereof, or, if less, the entire principal amount thereof then
outstanding.  Agent will

 

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promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Pro Rata share of such prepayment.

 

5.2.2.      Mandatory Prepayments of Loans.

 

(a)           Asset Dispositions and Insurance Proceeds.  The Loans shall also
be prepaid as soon as practicable but no later than three (3) Business Days
after the consummation of any Asset Disposition (other than any Asset
Disposition by any SPE or Passive Company) (x) specified in clauses (l) through
(s) (other than clause (r)) of the definition of “Permitted Asset Disposition”
or (y) occurring after the commencement and during the continuation of a Trigger
Event Period (or if a Trigger Event would occur after giving effect to any such
Asset Disposition), in each case, in an amount equal to 100% of the Net Proceeds
of such Asset Disposition, with such Net Proceeds to be applied to the
Obligations in accordance with Section 5.5.  The Loans shall also be prepaid in
accordance with Section 8.6.2.

 

(b)           5.2.1. Certain Other Mandatory Repayments of the Loans and
Reduction of CommitmentsSale of Material Portion of Collateral; Etc.  As soon as
practicable but no later than three (3) Business Days after (i) store closings,
going-out-of-business or similar sales by all of the Obligors of all or
substantially all of their retail operations or Inventory, (ii) a foreclosure by
Agent of its Liens on a material portion of the Collateral or (iii) a
disposition of a material portion of the Collateral by Agent as a result of the
cessation of retail operations at all or substantially all Stores, excluding
Force Majeure or Ordinary Course of Business temporary closures, the Borrowers
agree and acknowledge that the Net Proceeds therefrom shall be applied to the
Obligations in accordance with Section 5.5 and the Tranche A Commitments shall
be permanently reduced in an amount equal to such Net Proceeds so applied.  Each
prepayment made pursuant to this Section 5.2.1 shall be accompanied by the
payment of accrued interest to the date of such payment on the amount prepaid.

 

(c)           Excess Availability.  Subject to Sections 2.1.4 and 2.1.5, if for
any reason at any time, Excess Availability is less than $0, the Borrowers shall
immediately prepay the Obligations in an aggregate amount equal to such
deficiency, which prepayment shall be applied in accordance with the priorities
set forth in Section 5.5, in each case until Excess Availability is equal to $0.

 

(d)           Cash Dominion.  The Obligations shall be repaid daily in
accordance with Section 5.6, to the extent then applicable and without regard to
minimum and incremental amounts otherwise required by this Loan Agreement.

 

(e)           Termination Date.  The Loans and all other Obligations (other than
contingent Obligations which by their terms survive such termination) shall be
due and payable in full on the Termination Date, unless payment is sooner
required hereunder.

 

5.3.         Payment of Other Obligations.  Obligations other than Loans,
including LC Obligations and Extraordinary Expenses, shall be paid when due by
Borrowers as provided in the Loan Documents or, if no payment date is specified,
on demand.

 

5.4.         Marshaling; Payments Set Aside.  None of Agent or Lenders shall be
under any obligation to marshal any assets in favor of any Obligor or against
any Obligations.  If any Obligor makes a payment to Agent or Lenders, or if
Agent or any Lender receives payment from the proceeds of Collateral, exercise
of setoff or otherwise, and such payment is subsequently invalidated or required
to be repaid to a trustee, receiver or any other Person, then the Obligations
originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been received and any enforcement or setoff had not occurred.

 

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5.5.         Allocation of PaymentsApplication of Proceeds.

 

5.5.1.      Pre-Default Allocation of PaymentsProceeds.  Notwithstanding
anything herein to the contrary, at all times when no Event of Default has
occurred and is continuing, all payments, whether arising from payments by
Obligors,proceeds of Collateral received by the Agent or any Secured Party and
all proceeds realized from the Obligors on account of the Collateral (whether
pursuant to Section 5.6 hereof or arising from realization on Collateral, setoff
or otherwise), shall be allocated as follows:

 

(a)           first, to all costs and expenses, including Extraordinary
Expenses, owing to Agent;

 

(b)           second, to all amounts owing to Agent on Swingline Loans or
Protective Advances;

 

(c)           third, to all amounts owing to Issuing Bank on LC Obligations;

 

(d)           fourth, to all Obligations constituting fees owing to the Tranche
A Lenders in their capacity as Tranche A Lenders (excluding Bank Product Debt);

 

(e)           fifth, to all Obligations constituting interest then owing on
Tranche A Revolver Loans (excluding Bank Product Debt);

 

(f)            sixth, to all other Obligations owing to the Tranche A Lenders in
their capacity as Tranche A Lenders (excluding Bank Product Debt);

 

(g)           seventh, to all Obligations constituting fees owing to the Tranche
A-1 Lenders in their capacity as Tranche A-1 Lenders (excluding Bank Product
Debt);

 

(h)           eighth, to all Obligations constituting interest then owing on
Tranche A-1 Revolver Loans (excluding Bank Product Debt);

 

(i)            ninth, to all other Obligations owing to the Tranche A-1 Lenders
in their capacity as Tranche A-1 Lenders (excluding Bank Product Debt);

 

(j)            tenth, to all Obligations owing to Secured Parties constituting
Bank Product Debt for which Agent has received written notice as provided under
the definition of “Bank Product”; and

 

(k)           eleventh, to Bank Product Debt owing to the Lenders and their
Affiliates for which Agent has not received written notice as provided under the
definition of “Bank Product”.

 

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category.  If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.  Amounts distributed with respect to any Bank
Product Debt or LC Obligations shall be the lesser of the applicable LC
Obligations or Bank Product Amount last reported to Agent or the actual LC
Obligations or Bank Product Debt as calculated by the methodology reported to
Agent for determining the amount due.  Agent shall have no obligation to
calculate the amount to be distributed with respect to any Bank Product Debt,
but may rely upon written notice of the amount (setting forth a reasonably
detailed calculation) from the Secured Party.  In the absence of such notice,
Agent may assume the amount to be distributed is the Bank Product Amount last
reported to it.  The allocations set forth in this Section 5.5.1 are solely to
determine the rights and priorities of Agent and Lenders as among themselves,
and may be changed by agreement among them without the consent of any Obligor. 
Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Loan Parties to preserve the
allocation to Obligations otherwise set forth above in this Section 5.5.1.

 

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5.5.2.      Post-Default Allocation of PaymentsProceeds.  Notwithstanding
anything herein to the contrary, after the occurrence and during the continuance
of an Event of Default, monies to be applied to the Obligations, whether arising
from payments by Obligors,all proceeds of Collateral received by the Agent or
any Secured Party and all proceeds realized from the Obligors on account of the
Collateral (whether pursuant to Section 5.6 hereof or arising from realization
on Collateral, setoff or otherwise), shall be allocated as follows:

 

(a)           first, to all costs and expenses, including Extraordinary
Expenses, owing to Agent, including costs and expenses, including Extraordinary
Expenses, accruing after the commencement of an Insolvency Proceeding, whether
or not allowed or allowable in such Insolvency Proceeding;

 

(b)           second, to all amounts owing to Agent on Swingline Loans or
Protective Advances;

 

(c)           third, to all amounts owing to Issuing Bank on LC Obligations;

 

(d)           fourth, to all Obligations constituting fees owing to the Tranche
A Lenders in their capacity as Tranche A Lenders (excluding Bank Product Debt),
including fees accruing after the commencement of an Insolvency Proceeding,
whether or not allowed or allowable in such Insolvency Proceeding;

 

(e)           fifth, to all Obligations constituting interest then owing on
Tranche A Revolver Loans (excluding Bank Product Debt), including default
interest and interest accruing after the commencement of an Insolvency
Proceeding, whether or not allowed or allowable in such Insolvency Proceeding;

 

(f)            sixth, to provide Cash Collateral for outstanding Letters of
Credit;

 

(g)           seventh, to all other Obligations owing to the Tranche A Lenders
in their capacity as Tranche A Lenders (excluding Bank Product Debt);

 

(h)           eighth, to all Obligations constituting fees owing to the Tranche
A-1 Lenders in their capacity as Tranche A-1 Lenders (excluding Bank Product
Debt);reimbursements owing to the Tranche A-1 Documentation Agent under
Section 3.4, including reimbursements for costs and expenses accruing after the
commencement of an Insolvency Proceeding, whether or not allowed or allowable in
such Insolvency Proceeding;

 

(i)            ninth, to all Obligations constituting interest then owing on
Tranche A-1 Revolver Loans (excluding Bank Product Debt)fees owing to the
Tranche A-1 Lenders in their capacity as Tranche A-1 Lenders, including fees
accruing after the commencement of an Insolvency Proceeding, whether or not
allowed or allowable in such Insolvency Proceeding;

 

(j)            tenth, to all other Obligations constituting interest then owing
to the Tranche A-1 Lenders in their capacity as Tranche A-1 Lenders (excluding
Bank Product Debt)on Tranche A-1 Revolver Loans, including default interest and
interest accruing after the commencement of an Insolvency Proceeding, whether or
not allowed or allowable in such Insolvency Proceeding;

 

(k)           eleventh, to all other Obligations owing to the Tranche A-1
Lenders in their capacity as Tranche A-1 Lenders;

 

(l)            twelfth, to Bank Product Debt owing to the Secured Parties for
which Agent has received written notice as provided under the definition of
“Bank Product”; and

 

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(m)          (l) twelfththirteenth, to Bank Product Debt owing to the Secured
Parties for which Agent has not received written notice as provided under the
definition of “Bank Product”.

 

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category.  If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.  Amounts distributed with respect to any Bank
Product Debt or LC Obligations shall be the lesser of the applicable LC
Obligations or Bank Product Amount last reported to Agent or the actual LC
Obligations or Bank Product Debt as calculated by the methodology reported to
Agent for determining the amount due.  Agent shall have no obligation to
calculate the amount to be distributed with respect to any Bank Product Debt,
but may rely upon written notice of the amount (setting forth a reasonably
detailed calculation) from the Secured Party.  In the absence of such notice,
Agent may assume the amount to be distributed is the Bank Product Amount last
reported to it.  The allocations set forth in this Section 5.5.2 are solely to
determine the rights and priorities of Agent and Lenders as among themselves,
and may be changed by agreement among them without the consent of any Obligor. 
This Section 5.5.2 is not for the benefit of or enforceable by any Obligor.
 Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Loan Parties to preserve the
allocation to the Obligations otherwise set forth above in this Section 5.5.2.

 

5.5.3.      Erroneous Application.  Agent shall not be liable for any
application of amounts made by it in error (unless it has been determined in a
final, non-appealable judgment by a court of competent jurisdiction that such
error was a result of the gross negligence or willful misconduct of Agent) and
if any such application is subsequently determined to have been made in error,
the sole recourse of any Lender or other Person to which such amount should have
been made in error (unless it has been determined in a final, non-appealable
judgment by a court of competent jurisdiction that such error was a result of
the gross negligence or willful misconduct of Agent) shall be to recover the
amount from the Person that actually received it (and, if such amount was
received by any Lender, such Lender hereby agrees to return it).

 

5.6.         Application of Payments. Dominion Account Proceeds. On each
Business Day occurring prior to the commencement of a Trigger Event Period, the
available balance in the main Dominion Account on each Business Day (to the
extent practicable and consistent with past practices) shall be transferred, by
the Borrowers, to the Borrower Account on the next Business Day (to the extent
practicable and consistent with past practices).  On each Business Day after the
commencement and during the continuation of a Trigger Event Period, the
available balance in the Dominion Accounts on such Business Day shall be
transferred, by the Agent, to a Borrower Account at Bank of America, and shall
be applied to the Obligations on the next Business Day.  Each Obligor
irrevocably waives the right at all times after the commencement and during the
continuation of a Trigger Event Period to direct the application of any payments
orsuch Collateral proceeds, and agrees that Agent (subject to Section 5.5.1 and
Section 5.5.2, as applicable) shall have the continuing, exclusive right to
apply and reapply same against the Obligations, in such manner as Agent deems
advisable, notwithstanding any entry by Agent in its records.  If, as a result
of Agent’s receipt of Payment Items or proceeds of Collateral, a credit balance
exists, the balance shall not accrue interest in favor of Obligors and shall be
made available to Borrowers as long as no Default or Event of Default exists.

 

5.7.         Loan Account; Account Stated.

 

5.7.1.      Loan Account.  Agent shall maintain in accordance with its usual and
customary practices an account or accounts (“Loan Account”) evidencing the Debt
of Borrowers resulting from each Loan or issuance of a Letter of Credit from
time to time.  Any failure of Agent to record anything in the Loan Account, or
any error in doing so, shall not limit or otherwise affect the obligation of
Borrowers to pay any amount owing hereunder.  Agent may maintain a single Loan
Account in the name of Borrower

 

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Agent, and each Borrower confirms that such arrangement shall have no effect on
the joint and several character of its liability for the Obligations.

 

5.7.2.      Entries Binding.  Entries made in the Loan Account shall constitute
presumptive evidence of the information contained therein.  If any information
contained in the Loan Account is provided to or inspected by any Person, then
such information shall be conclusive and binding on such Person for all purposes
absent demonstrable error, except to the extent such Person notifies Agent in
writing within 30 days after receipt or inspection that specific information is
subject to dispute.

 

5.8.         Taxes.  If any Taxes (except Excluded Taxes) shall be payable by
any party due to the execution, delivery, issuance or recording of any Loan
Documents, or the creation or repayment of any Obligations, Borrowers shall pay
(and shall promptly reimburse Agent and Lenders for their payment of) all such
Taxes, including any interest and penalties thereon, and will indemnify and hold
harmless Indemnitees against all liability in connection therewith.  If
Borrowers shall be required by Applicable Law to withhold or deduct any Taxes
(except Excluded Taxes) with respect to any sum payable under any Loan
Documents, (a) the sum payable to Agent or such Lender shall be increased as may
be necessary so that, after making all required withholding or deductions, Agent
or such Lender (as the case may be) receives an amount equal to the sum it would
have received had no such withholding or deductions been made; (b) Borrowers
shall make such withholding or deductions; and (c) Borrowers shall pay the full
amount withheld or deducted to the relevant taxing or other authority in
accordance with Applicable Law.  Unless required by Applicable Law, at no time
shall the Agent have any obligation to file for or otherwise pursue on behalf of
a Lender or an Issuing Bank, or have any obligation to pay to any Lender or
Issuing Bank, any refund of Taxes withheld or deducted from funds paid for the
account of such Lender or Issuing Bank, as the case may be.  If the Agent, any
Lender or Issuing Bank determines, in its sole discretion, that it has received
a refund of any Taxes as to which it has been indemnified by the Borrowers or
with respect to which the Borrowers have paid additional amounts pursuant to
this Section 5.8 or Section 5.9, it shall pay to the Borrowers an amount equal
to such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrowers under this Section 5.8 or Section 5.9 with
respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses incurred by the Agent, such Lender or Issuing Bank, as the case may be,
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Borrowers, upon the
request of the Agent, such Lender or Issuing Bank, agrees to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent, such Lender or
Issuing Bank in the event the Agent, such Lender or Issuing Bank is required to
repay such refund to such Governmental Authority.  This Section shall not be
construed to require the Agent, any Lender or Issuing Bank to pursue any tax
refund or to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to the Borrowers or any other Person.

 

5.8.1.      Payments Free of Taxes; Obligation to Withhold; Payments on Account
of Taxes.

 

(a)           Any and all payments by or on account of any obligation of any
Obligor hereunder or under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by Applicable Laws.  If any
Applicable Laws (as determined in the good faith discretion of Agent) require
the deduction or withholding of any Tax from any such payment by Agent or an
Obligor, then Agent or such Obligor shall be entitled to make such deduction or
withholding, upon the basis of the information and documentation to be delivered
pursuant to Section 5.8.5 below.

 

(b)           If any Obligor or the Agent shall be required by the IRC to
withhold or deduct any Taxes, including both United States federal backup
withholding and withholding taxes, from any payment, then (A) Agent shall
withhold or make such deductions as are determined by Agent to be required based
upon the information and documentation to be delivered pursuant to Section 5.8.5
below, (B) Agent shall timely pay the full amount withheld or deducted to the
relevant Governmental Authority in accordance with the IRC, and (C) to the
extent that the withholding or deduction is made on account of Indemnified
Taxes,

 

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the sum payable by the applicable Obligor shall be increased as necessary so
that after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this
Section 5.8) the applicable Recipient receives an amount equal to the sum it
would have received had no such withholding or deduction been made.

 

(c)           If any Obligor or the Agent shall be required by any Applicable
Laws other than the IRC to withhold or deduct any Taxes from any payment, then
(A) such Obligor or Agent, as required by such Applicable Laws, shall withhold
or make such deductions as are determined by it to be required based upon the
information and documentation to be delivered pursuant to Section 5.8.5 below,
(B) such Obligor or the Agent, to the extent required by such Applicable Laws,
shall timely pay the full amount withheld or deducted to the relevant
Governmental Authority in accordance with such Applicable Laws, and (C) to the
extent that the withholding or deduction is made on account of Indemnified
Taxes, the sum payable by the applicable Obligor shall be increased as necessary
so that after any required withholding or the making of all required deductions
(including deductions applicable to additional sums payable under this
Section 5.8) the applicable Recipient receives an amount equal to the sum it
would have received had no such withholding or deduction been made.

 

5.8.2.      Payment of Other Taxes by the Borrowers.  Without limiting the
provisions of Section 5.8.1 above, the Obligors shall timely pay to the relevant
Governmental Authority in accordance with Applicable Law, or at the option of
Agent timely reimburse it for the payment of, any Other Taxes.

 

5.8.3.      Tax Indemnifications.

 

(a)           Each of the Obligors shall, and does hereby, jointly and
severally, indemnify each Recipient, and shall make payment in respect thereof
within thirty (30) days after demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.8) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient, and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to the
Borrower Agent by a Lender or the Issuing Bank (with a copy to Agent, or by
Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.  Each of the Obligors shall, and does hereby,
jointly and severally, indemnify the Agent, and shall make payment in respect
thereof within thirty (30) days after demand therefor, for any amount which a
Lender or the Issuing Bank for any reason fails to pay indefeasibly to Agent as
required pursuant to Section 5.8.3(b) below.

 

(b)           Each Lender and Issuing Bank shall, and does hereby, severally
indemnify, and shall make payment in respect thereof within thirty (30) days
after demand therefor, (x) the Agent against any Indemnified Taxes attributable
to such Lender or the Issuing Bank (but only to the extent that any Obligor has
not already indemnified Agent for such Indemnified Taxes and without limiting
the obligation of the Obligors to do so), (y) Agent and the Obligors, as
applicable, against any Taxes attributable to such Lender’s failure to comply
with the provisions of Section 13.3.1 relating to the maintenance of a
Participant Register and (z) Agent and the Obligors, as applicable, against any
Excluded Taxes attributable to such Lender or the Issuing Bank, in each case,
that are payable or paid by Agent or an Obligor in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to any Lender by Agent shall be conclusive absent
manifest error.  Each Lender and Issuing Bank hereby authorizes Agent to set off
and apply any and all amounts at any time owing to such Lender or the Issuing
Bank, as the case may be, under this Loan Agreement or any other Loan Document
against any amount due to Agent under this Section 5.8.3(b).

 

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5.8.4.      Evidence of Payments.  As soon as practicable after any payment of
Taxes by the Obligors to a Governmental Authority as provided in this
Section 5.8, the Borrower Agent shall deliver to Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of any return required by Applicable Laws to report such
payment or other evidence of such payment reasonably satisfactory to Agent.

 

5.8.5.      Status of Lenders; Tax Documentation.

 

(a)           5.9. Withholding Tax Exemption.  At least five Business Days prior
to the first date for payment of interest or fees hereunder to a Foreign Lender,
the Foreign Lender shall deliver to Borrowers and Agent two duly completed
copies of IRS Form W-8BEN or W-8ECI (or any subsequent replacement or substitute
form therefor), certifying that such Lender can receive payment of Obligations
without deduction or withholding of any United States federal income taxes.  In
addition, in the case of a Foreign Lender that is relying on the portfolio
interest exemptionAny Lender that is entitled to an exemption from or reduction
of withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower Agent and the Agent, at the time or times reasonably
requested by the Borrower Agent or the Agent, such properly completed and
executed documentation reasonably requested by the Borrower Agent or the Agent
as will permit such payments to be made without withholding or at a reduced rate
of withholding.  In addition, any Lender, if reasonably requested by the
Borrower Agent or the Agent, shall deliver such other documentation prescribed
by Applicable Laws or reasonably requested by the Borrower Agent or Agent as
will enable the Borrower Agent or the Agent to determine whether or not such
Lender is subject to backup withholding or information reporting requirements. 
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 5.8.5(b)(i), (b)(ii) and (b)(iv) below) shall
not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

 

(b)           Without limiting the generality of the foregoing, in the event
that the relevant Borrower is a U.S. Person,

 

(i)            any Lender that is a U.S. Person shall deliver to the Borrower
Agent and the Agent on or prior to the date on which such Lender becomes a
Lender under this Loan Agreement (and from time to time thereafter upon the
reasonable request of the Borrower Agent or Agent), executed copies of IRS
Form W-9 certifying that such Lender is exempt from U.S. federal backup
withholding tax;

 

(ii)           any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Borrower Agent and the Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Loan Agreement (and from time to time
thereafter upon the reasonable request of the Borrower Agent or the Agent),
whichever of the following is applicable:

 

(1)           in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or
W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;

 

(2)           executed copies of IRS Form W-8ECI;

 

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(3)           in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the IRC, such Foreign
Lender shall also deliver at such time described above a form approved by the
Borrower Agent,(x) a certificate substantially in the form of Exhibit I-1 to the
effect that such Foreign Lender is not (A) a “bank” lending in the ordinary
course of its trade or business, within the meaning of Section 881(c)(3)(A) of
the IRC, (B) a “10 percent shareholder” of any BorrowerHoldings within the
meaning of Section 881(c)(3)(B) of the IRC, or (C) a “controlled foreign
corporation” related to any Borrower within the meaning ofdescribed in
Section 881(3)(c)(3)(C) of the IRC.  Each (a “U.S. Tax Compliance Certificate”)
and (y) executed copies of IRS Form W-8BEN or W-8BEN-E, as applicable; or

 

(4)           to the extent a Foreign Lender is not the beneficial owner,
executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, W-8BEN or
W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the
form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit I-4 on behalf of each such direct and indirect partner;

 

(iii)          any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to Borrowers and Agent two additional copies of such forms before
the preceding forms expire or become obsolete or after the occurrence of any
event requiring a change in the forms, as well as any amendments, extensions or
renewals thereof as may be reasonably requested by Borrowers or Agent, in each
case, certifying that the Foreign Lender can receive payment of Obligations
without deduction or withholding of any such taxes unless any change in treaty
or law has occurred that renders such forms inapplicable or prevents the Foreign
Lender from certifying that it can receive payments without deduction or
withholding of such taxes.  During any period that a Foreign Lender does not or
is unable to establish that it can receive payments without deduction or
withholding of such taxes, other than by reason of any change in treaty or law
that occurs after it becomes a Lender, Agent may withhold taxes from payments to
such Foreign Lender at the applicable statutory and treaty rates, and Borrowers
shall not be required to pay any additional amounts under Section 5.8 or this
Section 5.9 as a result of such withholding.  Each Lender or Agent that is
organized under the laws of the United States, or any state or district thereof
shall provide to the Borrowers (and in the case of a Lender, to the Agent) two
duly executed copies of IRS Form W-9 certifying that such Lender is not subject
to U.S. federal backup withholding tax.  During any period that a Lender does
not or is unable to establish that it can receive payments without deduction or
withholding of such backup withholding taxes, Agent may withhold taxes from
payments to such Lender at the applicable statutory rate, and Borrowers shall
not be required to pay any additional amounts under Section 5.8 or this
Section 5.9 as a result of such withholding.  In the event that any Lender or
Agent does not comply with the requirements of this Section 5.9, Borrowers may
withhold taxes from payments to such Lender or Agent as required by applicable
law.  In the event of the resignation or removal of the Agent pursuant to
Section 12.8 hereunder, the successor Agent shall be subject to the provisions
of this Section 5.9 in the same manner as a its predecessor Agent, and shall be
required to provide the appropriate documentation to the Borrowers as required
in this Section 5.9.  In the event that the successor Agent does not comply with
the requirements of this Section 5.9, Borrowers may withhold taxes from payments
to such successor Agent as required by applicable law.  Ifthe Borrower Agent and
the Agent (in such number of copies as shall be requested by the recipient) on
or prior to the date on which such Foreign Lender becomes a Lender under this
Loan Agreement (and from time to time thereafter upon the reasonable request of
the Borrower Agent or the Agent), executed originals of any other form
prescribed by Applicable Law as a basis for claiming exemption from or a
reduction in U.S. federal with-holding Tax, duly completed, together with such
supplementary documentation as may be prescribed by Applicable Law to permit the
Borrower Agent or the Agent to determine the withholding or deduction required
to be made; and

 

(iv)          if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable

 

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reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the IRC, as applicable), such Lender shall deliver to the Borrower
Agent and the Agent at the time or times prescribed by law and at such time or
times reasonably requested by the Borrower Agent or the Agent such documentation
prescribed by Applicable Law (including as prescribed by
Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by the Borrower Agent or the Agent as may be necessary for
the Borrowers and the Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment. 
Solely for purposes of this Section 5.9,5.8, “FATCA” shall include any
amendments made to FATCA after the date of this Loan Agreement.  For purposes of
determining withholding Taxes imposed under the FATCA, from and after the Third
Amendment Closing Date, the Obligors and the Agent shall treat (and the Lenders
hereby authorize the Agent to treat) the Loans and the Loan Agreement as not
qualifying as a “grandfathered obligation” within the meaning of Treasury
Regulation Section 1.1471-2(b)(2)(i).

 

(v)           Each Recipient agrees that if any form or certification it
previously delivered pursuant to this Section 5.8 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrower Agent and the Agent in writing of its legal
inability to do so.

 

5.8.6.      Treatment of Certain Refunds.  Unless required by Applicable Laws,
at no time shall the Agent have any obligation to file for or otherwise pursue
on behalf of a Lender or an Issuing Bank, or have any obligation to pay to any
Lender or any Issuing Bank, any refund of Taxes withheld or deducted from funds
paid for the account of such Lender or Issuing Bank, as the case may be.  If any
Recipient determines, in its sole discretion exercised in good faith, that it
has received a refund of any Taxes as to which it has been indemnified by any
Obligor or with respect to which any Obligor has paid additional amounts
pursuant to this Section 5.8, it shall pay to such Obligor an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Obligor under this Section 5.8 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
incurred by such Recipient, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided
that the Obligor, upon the request of the Recipient, agrees to repay the amount
paid over to the Obligor (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Recipient in the event the
Recipient is required to repay such refund to such Governmental Authority. 
Notwithstanding anything to the contrary in this Section 5.8.6, in no event will
the applicable Recipient be required to pay any amount to any Obligor pursuant
to this subsection the payment of which would place the Recipient in a less
favorable net after-Tax position than such Recipient would have been in if Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid.  This Section 5.8.6 shall
not be construed to require any Recipient to make available its tax returns (or
any other information relating to its taxes that it deems confidential) to any
Obligor or any other Person.

 

5.8.7.      Survival.  Each party’s obligations under this Section 5.8 shall
survive the resignation or replacement of one or more of the Agents or any
assignment of rights by, or the replacement of, a Lender or the Issuing Bank,
the termination of the Commitments and the repayment, satisfaction or discharge
of all other Obligations and the termination of this Loan Agreement.

 

5.9.         [Reserved].

 

5.10.       Nature and Extent of Each Borrower’s Liability.

 

5.10.1.    Joint and Several Liability.  Each Borrower agrees that it is jointly
and severally liable for, and absolutely and unconditionally guarantees to Agent
and Lenders the prompt payment and performance of, all Obligations and all
agreements under the Loan Documents.  Each Borrower agrees that

 

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its guaranty of obligations hereunder constitute a continuing guaranty of
payment and performance and not of collection, that such obligations shall not
be discharged until Full Payment of the Obligations and that such obligations
are absolute and unconditional, irrespective of (a) the genuineness, validity,
regularity, enforceability, subordination or any future modification of, or
change in, any Obligations or Loan Document, or any other document, instrument
or agreement to which any Obligor is or may become a party or liable; (b) the
absence of any action to enforce this Loan Agreement (including this
Section 5.10.1) or any other Loan Document, or any waiver, consent or indulgence
of any kind by Agent or any Lender with respect thereto; (c) the existence,
value or condition of, or failure to perfect a Lien or to preserve rights
against, any security or guaranty for the Obligations or any action, or the
absence of any action, by Agent or any Lender in respect thereof (including the
release of any security or guaranty); (d) the insolvency of any Obligor; (e) any
election by Agent or any Lender in an Insolvency Proceeding for the application
of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a
Lien by any other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any
Lender against any Obligor for the repayment of any Obligations under
Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, except Full Payment of all Obligations.

 

5.10.2.    Waivers.

 

(a)           Each Borrower expressly waives all rights that it may have now or
in the future under any statute, at common law, in equity or otherwise, to
compel Agent or Lenders to marshal assets or to proceed against any Obligor,
other Person or security for the payment or performance of any Obligations
before, or as a condition to, proceeding against such Borrower.  It is agreed
among each Borrower, Agent and Lenders that the provisions of this
Section 5.10.2 are of the essence of the transaction contemplated by the Loan
Documents and that, but for such provisions, Agent and Lenders would decline to
make Loans and issue Letters of Credit.  Notwithstanding anything to the
contrary in any Loan Document, and except as set forth in Section 5.10.3, each
Borrower expressly waives all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off, as well as
all defenses available to a surety, guarantor or accommodation co-obligor.  Each
Borrower acknowledges that its guaranty pursuant to this Section 5.10.2 is
necessary to the conduct and promotion of its business, and can be expected to
benefit such business.

 

(b)           Agent and Lenders may, in their discretion, pursue such rights and
remedies as they deem appropriate, including realization upon Collateral or any
Real Estate by judicial foreclosure or non-judicial sale or enforcement, without
affecting any rights and remedies under this Section 5.10.  If, in the exercise
of any rights or remedies, Agent or any Lender shall forfeit any of its rights
or remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to “election of remedies” or otherwise, each Borrower consents to such action by
Agent or such Lender and waives any claim based upon such action, even if the
action may result in loss of any rights of subrogation that any Borrower might
otherwise have had but for such action.  Any election of remedies that results
in denial or impairment of the right of Agent or any Lender to seek a deficiency
judgment against any Borrower shall not impair any other Borrower’s obligation
to pay the full amount of the Obligations.  Each Borrower waives all rights and
defenses arising out of an election of remedies, such as nonjudicial foreclosure
with respect to any security for the Obligations, even though that election of
remedies destroys such Borrower’s rights of subrogation against any other
Person.  If Agent bids at any foreclosure or trustee’s sale or at any private
sale, Agent may bid all or a portion of the Obligations and the amount of such
bid need not be paid by Agent but shall be credited against the Obligations. 
The amount of the successful bid at any such sale, whether Agent or any other
Person is the successful bidder, shall be conclusively deemed to be the fair
market value of the Collateral, and the difference between such bid amount and
the remaining balance of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Section 5.10, notwithstanding
that any

 

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present or future law or court decision may have the effect of reducing the
amount of any deficiency claim to which Agent or any Lender might otherwise be
entitled but for such bidding at any such sale.

 

5.10.3.    Extent of Liability; Contribution.

 

(a)           Notwithstanding anything herein to the contrary, each Borrower’s
liability under this Section 5.10 shall be limited to the greater of (i) all
amounts for which such Borrower is primarily liable and (ii) such Borrower’s
Allocable Amount.

 

(b)           If any Borrower makes a payment under this Section 5.10 of any
Obligations (other than amounts for which such Borrower is primarily liable) (a
“Guarantor Payment”) that, taking into account all other Guarantor Payments
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such Borrower’s Allocable Amount bore to the total Allocable Amounts of all
Borrowers, then such Borrower shall be entitled to receive contribution and
indemnification payments from, and to be reimbursed by, each other Borrower for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.  The “Allocable
Amount” for any Borrower shall be the maximum amount that could then be
recovered from such Borrower under this Section 5.10 without rendering such
payment voidable or avoidable under Section 548 of the Bankruptcy Code or under
any applicable state fraudulent transfer or conveyance act, or similar statute
or common law.

 

(c)           Nothing contained in this Section 5.10 shall limit the liability
of any Borrower to pay Loans made directly or indirectly to that Borrower
(including Loans advanced to any other Borrower and then re-loaned or otherwise
transferred to, or for the benefit of, such Borrower), LC Obligations relating
to Letters of Credit issued to support such Borrower’s business, and all accrued
interest, fees, expenses and other related Obligations with respect thereto, for
which such Borrower shall be primarily liable for all purposes hereunder.

 

5.10.4.    Joint Enterprise.  Each Borrower has requested that Agent and Lenders
make this credit facility available to Borrowers on a combined basis, in order
to finance Borrowers’ business most efficiently and economically.  Borrowers’
business is a mutual and collective enterprise, and Borrowers believe that
consolidation of their credit facility will enhance the borrowing power of each
Borrower and ease the administration of their relationship with Lenders, all to
the mutual advantage of Borrowers.  Borrowers acknowledge and agree that Agent’s
and Lenders’ willingness to extend credit to Borrowers and to administer the
Collateral on a combined basis, as set forth herein, is done solely as an
accommodation to Borrowers and at Borrowers’ request.

 

5.10.5.    Subordination.  Each Borrower hereby subordinates any claims,
including any right of payment, subrogation, contribution and indemnity, that it
may have at any time against any other Obligor, howsoever arising, to the Full
Payment of all Obligations.

 

SECTION 6.        CONDITIONS PRECEDENT

 

6.1.         Conditions Precedent to Initial Loans.  In addition to the
conditions set forth in Section 6.2, Lenders shall not be required to fund any
requested Loan, issue any Letter of Credit, or otherwise extend credit to
Borrowers hereunder, until the date (“Closing Date”) that each of the following
conditions has been satisfied:

 

(a)           Notes shall have been executed by Borrowers and delivered to each
Lender that requests issuance of a Note.  Each of this Loan Agreement and the
other Loan Documents shall have been duly executed and delivered to Agent by
each of the signatories thereto, and each shall be in form and

 

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substance reasonably satisfactory to the Agent and each of the Lenders, and each
Obligor shall be in compliance with all terms thereof.

 

(b)           Agent and the Lenders shall be satisfied that the Security
Documents shall be effective to create in favor of the Agent a legal, valid and
enforceable first priority (subject only to Permitted Liens entitled to priority
under Applicable Law) perfected security interest in and Lien upon the
Collateral and shall have received (i) evidence that all filings, recordings,
deliveries of instruments and other actions necessary or desirable in the
commercially reasonable opinion of Agent to protect and preserve such security
interests shall have been duly effected, (ii) UCC and Lien searches (and the
equivalent thereof in all applicable foreign jurisdictions) and other evidence
reasonably satisfactory to Agent that such Liens are the only Liens upon the
Collateral, except Permitted Liens and Liens to be discharged on or prior to the
Closing Date, (iii) evidence that the payment (or evidence of provision for
payment) of all filing and recording fees and taxes due and payable in respect
thereof has been made in form and substance reasonably satisfactory to Agent and
each of the Lenders, and (iv) a completed and fully executed perfection
certificate in form and substance reasonably satisfactory to Agent;

 

(c)           [Reserved].

 

(d)           Agent shall have received duly executed agreements establishing
each Dominion Account and related lockbox and the Borrower Account, each in form
and substance, and with financial institutions, reasonably satisfactory to Agent
and each of the Lenders.

 

(e)           Agent shall have received a certificate, in form and substance
reasonably satisfactory to it and each of the Lenders, from the chief financial
officer or the treasurer of each Borrower (with such certification to be in such
Person’s capacity as chief financial officer or the treasurer of such Borrower
and not in such Person’s individual capacity) certifying that:

 

(i)            after giving effect to the initial Loans and transactions
hereunder, (A) (x) Parent and its Subsidiaries, on a consolidated basis, are
Solvent and (y) each Borrower, individually, is Solvent; (B) no Default or Event
of Default exists; (C) the representations and warranties set forth in Section 9
are true and correct in all material respects; and (D) each Borrower has
complied in all material respects with all agreements and conditions to be
satisfied by it under the Loan Documents;

 

(ii)           there is no action, suit, investigation or proceeding pending or,
to the knowledge of Parent or its Subsidiaries, threatened in writing in any
court or before any arbitrator or governmental authority that could reasonably
be expected to have a Material Adverse Effect;

 

(iii)          all Loans made by the Lenders to the Borrowers hereunder are and
shall remain in full compliance with the Federal Reserve’s margin regulations;
and

 

(iv)          no Applicable Law or Environmental Law to which any Borrower is
subject is applicable to the transactions contemplated hereby which could
reasonably be expected to have a Material Adverse Effect on any Obligor or a
Material Adverse Effect on the transactions contemplated hereby.

 

(f)            Agent shall have received a certificate of a duly authorized
officer of each Obligor (with such certification to be in such Person’s capacity
as an officer of such Obligor and not in such Person’s individual capacity),
certifying (i) that attached copies of such Obligor’s Organic Documents are true
and complete, and in full force and effect, without amendment except as shown,
(ii) that an attached copy of resolutions authorizing execution and delivery of
the Loan Documents is true and complete, and that such resolutions are in full
force and effect, were duly adopted, have not been amended, modified or revoked,

 

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and constitute all resolutions adopted with respect to this credit facility, and
(iii) to the title, name and signature of each Person authorized to sign the
Loan Documents.

 

(g)           Agent shall have received a written opinion of Paul, Weiss,
Rifkind, Wharton & Garrison LLP, as well as any relevant local counsel to
Obligors (other than The Bon-Ton Giftco, Inc., which the Borrowers represent has
less than $5,000,000 in assets on the Closing Date (exclusive of any
intercompany receivables)), in form and substance reasonably satisfactory to
Agent and each of the Lenders.

 

(h)           Agent shall have received copies of the charter documents of each
Obligor, certified as appropriate by the Secretary of State or another official
of such Obligor’s jurisdiction of organization.  Agent shall have received good
standing or subsistence certificates, as applicable, for each Obligor, issued by
the Secretary of State or other appropriate official of such Obligor’s
jurisdiction of organization and each jurisdiction where such Obligor’s conduct
of business or ownership of Property necessitates qualification.

 

(i)            Agent shall (i) have received copies of policies of insurance,
(ii) be reasonably satisfied with the amount, types and terms and conditions of
all insurance maintained by the Obligors and their Subsidiaries, and (iii) have
received certificates of insurance with endorsements naming Agent, for the
benefit of the Secured Parties, as loss payee or additional insured, as
applicable, with respect to each insurance policy required to be maintained with
respect to the Collateral and otherwise in form and substance reasonably
satisfactory to Agent and each of the Lenders.

 

(j)            [Reserved].

 

(k)           Borrowers shall have paid all reasonable and documented fees and
out-of-pocket expenses to be paid to Agent and Lenders on the Closing Date
(including, without limitation, all reasonable and documented fees,
out-of-pocket charges and disbursements of one outside counsel, one local
counsel in each relevant jurisdiction (as determined by the Agent in its
reasonable discretion), one special or regulatory counsel in respect of each
matter (as reasonably required by the Agent) and conflict of interest counsel
(as determined by the Agent in its reasonable discretion), accounting,
appraisal, consulting and other reasonable and documented fees, out-of-pocket to
the extent invoiced prior to or on the Closing Date.

 

(l)            The Agent shall have received an updated field examination and
appraisals of the Borrowers’ inventory and real estate, with results reasonably
satisfactory to the Agent.

 

(m)          Agent shall have received a flow of funds, in form and substance
reasonably satisfactory to it.

 

(n)           Agent shall have received copies of notifications instructing each
of Mastercard, Visa, HSBC, as applicable, and each Obligor’s other Credit Card
Processor required by Agent to transfer all amounts owing by such Credit Card
Processor to an Obligor directly to the Borrower Account or other Deposit
Account reasonably acceptable to Agent and subject to control arrangements
reasonably satisfactory to Agent, with (x) such notifications (each, a “Credit
Card Notification”) to be substantially the form attached hereto as Exhibit E,
or in such other form reasonably acceptable to Agent, (y) such notifications to
be executed by each relevant Obligor, sent to each such Credit Card Processor
and (z) Agent to be satisfied that the Obligors have exercised commercially
reasonable efforts to obtain acknowledgments of such Credit Card Notifications
from such Credit Card Processors.

 

(o)           Agent shall have received a Borrowing Base Certificate dated as of
the Closing Date, in form and substance reasonably satisfactory to it, and the
Agent shall be satisfied that, both before and after giving effect to all
extensions of credit to be made, and Letters of Credit outstanding, on the
Closing Date, Excess Availability under the Loan Agreement shall not be, less
than $250,000,000.

 

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(p)           Agent shall have received such other certificates, documents,
agreements and information in respect of any Obligor as Agent may reasonably
request.

 

(q)           The Lenders shall have received forecasts prepared by management
of the Borrowers of balance sheets, income statements and cash flow statements,
each in a form substantially similar to those provided to the Agent under the
Existing Credit Agreement, on a fiscal monthly basis for the first Fiscal Year
following the Closing Date and on an annual basis for each Fiscal Year
thereafter during the term of the this Loan Agreement.

 

(r)            The Lenders shall have received a pro forma availability forecast
for the Borrowers, on a fiscal monthly basis, for the first year following the
Closing Date.

 

For purposes of determining compliance with the conditions specified in this
Section 6.1, each Lender that has signed this Loan Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Agent shall have received
written notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.

 

6.2.         Conditions Precedent to All Credit Extensions.  Agent, Issuing Bank
and Lenders shall not be required to fund any Loans or arrange for the issuance,
extension or renewal of any Letters of Credit, unless the following conditions
are satisfied:

 

(a)           No Default or Event of Default shall exist at the time of, or
result from, such funding, issuance, extension or renewal;

 

(b)           The representations and warranties of each Obligor in the Loan
Documents shall be true and correct in all material respects on the date of, and
upon giving effect to, such funding, issuance, extension or renewal (except for
representations and warranties that expressly relate to an earlier date and
except for changes therein which do not cause a violation of this Loan
Agreement);

 

(c)           All conditions precedent to fund any Loans or to arrange for the
issuance, extension or renewal of any Letters of Credit to or for the benefit of
Borrowers set forth in any other Loan Document shall be satisfied;

 

(d)           No event shall have occurred or circumstance exist that has or
could reasonably be expected to have a Material Adverse Effect; and

 

(e)           With respect to the issuance, extension or renewal of a Letter of
Credit, the LC Conditions shall be satisfied.

 

Each request (or deemed request) by Borrowers for funding of a Loan or the
issuance, extension or renewal of a Letter of Credit shall constitute a
representation by Borrowers that the foregoing conditions are satisfied on the
date of such request and on the date of such funding, issuance, extension or
renewal.

 

6.3.         Limited Waiver of Conditions Precedent.  If Agent, Issuing Bank or
Lenders fund any Loans, arrange for issuance of any Letters of Credit or grant
any other accommodation when any conditions precedent are not satisfied
(regardless of whether the lack of satisfaction was known or unknown at the
time), it shall not operate as a waiver of (a) the right of Agent, Issuing Bank
and Lenders to insist upon satisfaction of all conditions precedent with respect
to any subsequent funding, issuance or grant; nor (b) any Default or Event of
Default due to such failure of conditions or otherwise.

 

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SECTION 7.        COLLATERAL

 

7.1.         Grant of Security Interest.  To secure the prompt payment and
performance of all Obligations, each Obligor hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
of the following personal and fixture property, assets and rights of such
Obligor of every kind and nature, whether now owned or hereafter acquired or
arising, and wherever located:

 

(a)           all Accounts and all Credit Card Receivables;

 

(b)           all Chattel Paper, including electronic chattel paper;

 

(c)           all Commercial Tort Claims described on Schedule 7.1(c), as shall
be amended from time to time in accordance with Section 7.4.1;

 

(d)           all Deposit Accounts;

 

(e)           all Documents;

 

(f)            subject to the proviso to Section 7.1(m), all General
Intangibles, including Payment Intangibles, Software and Intellectual Property;
provided, however, that the grant of security interest shall not include any
intent-to-use application for a trademark that may be deemed invalidated,
canceled or abandoned due to the grant and/or enforcement of such security
interest unless and until such time that the grant and/or enforcement of the
security interest will not affect the status or validity of such trademark;

 

(g)           all Goods, including Inventory, Equipment and Fixtures, excluding
(i) any motor vehicles and (ii) any Equipment subject to Purchase Money Liens
securing Permitted Purchase Money Debt so long as the documents evidencing such
Permitted Purchase Money Debt expressly prohibit a second priority lien on such
Equipment;

 

(h)           all Instruments;

 

(i)            all Investment Property;

 

(j)            all Letter-of-Credit Rights;

 

(k)           all Supporting Obligations;

 

(l)            all monies, whether or not in the possession or under the control
of Agent, a Lender, or a bailee or Affiliate of Agent or a Lender, including any
Cash Collateral;

 

(m)          all equity interests in any Subsidiary of such Obligor; provided
that such grant of security interest shall not extend to the partnership
interests in any of The Bon-Ton Properties-Eastview L.P., The Bon-Ton
Properties- Marketplace L.P., or The Bon-Ton Properties- Greece Ridge L.P., to
the extent that the grant of such security interest would constitute or result
in a breach or termination pursuant to the terms of, or a default under, any
lease, loan document, partnership agreement or other organizational document of
such limited partnership, so long as such restrictive provision is enforceable
under Applicable Law;all Capital Stock in any Subsidiary of such Obligor;

 

(n)           all accessions to, substitutions for, and all replacements,
products, and cash and non-cash proceeds of the foregoing, including proceeds of
and unearned premiums with respect to insurance policies, and claims against any
Person for loss, damage or destruction of any Collateral; and

 

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(o)           all books and records (including customer lists, files,
correspondence, tapes, computer programs, print-outs and computer records)
pertaining to the foregoing;

 

provided, however, that notwithstanding any of the other provisions set forth
herein and solely with respect to assets other than Inventory, Accounts, and
other assets of the types that are not included in the Tranche A Borrowing Base
or the Tranche A-1 Borrowing Base, this Loan Agreement shall not constitute a
grant of a security interest in, and “Collateral” shall not include any property
to the extent that a grant of security interest therein (x) is prohibited by any
requirements of law or (y) is prohibited by or constitutes a breach or default
under or results in the termination of or requires any consent not obtained
under any contract, license, agreement, instrument or other document evidencing
or giving rise to such property or any applicable shareholder or similar
agreement, in the case of clause (x) and (y), solely to the extent such
prohibition or breach or default or requirement for consent is in effect and is
enforceable under Applicable Law.

 

7.2.         Lien on Deposit Accounts; Cash Collateral.

 

7.2.1.      Deposit Accounts.  To further secure the prompt payment and
performance of all Obligations, each Obligor hereby grants to Agent, for the
benefit of Secured Parties, a continuing security interest in and Lien upon all
of such Obligor’s right, title and interest in and to each Deposit Account of
such Obligor (except for those referred to in clauses (i) through (iv) of
Section 8.5) and any deposits or other sums at any time credited to any such
Deposit Account, including any sums in any blocked or lockbox accounts or in any
accounts into which such sums are swept.  Prior to the commencement of a Trigger
Event Period, each Obligor shall direct each bank or other depository to deliver
to the Borrower Account, on each Business Day (to the extent practicable and
consistent with past practices), all available balances in each Deposit Account
maintained by such Obligor with such depository (except for (a) those Deposit
Accounts referred to in clauses (i) through (iv) of Section 8.5 and (b) those
Deposit Accounts exclusively used as secondary operating accounts and described
on Schedule 7.2.1 (as may be updated with the reasonable approval of Agent with
respect to such secondary operating accounts) so long as the average account
balances in such accounts described in this clause (b) are in amounts consistent
with the Ordinary Course of Business of the Obligors); provided, however, that
the Obligors may maintain an aggregate account balance in local Deposit Accounts
not to exceed $5,000 for each Store supported by such local Deposit Account for
petty cash and Store expense reimbursement purposes.  At all times after the
commencement and during the continuation of a Trigger Event Period, the Agent
shall direct each bank or other depository to deliver to a Borrower Account at
Bank of America on each Business Day, for application to the Obligations then
outstanding, all available balances in each Deposit Account maintained by any
Obligor with such depository (except for those Deposit Accounts referred to in
clauses (i) through (iv) of Section 8.5).  Each Obligor irrevocably appoints, at
all times after the commencement and during the continuation of a Trigger Event
Period, Agent as such Obligor’s attorney in fact to collect such balances to the
extent any such delivery is not so made.  Each Obligor waives the right at all
times after the commencement and during the continuation of a Trigger Event
Period to direct the application of any payments or Collateral proceeds, and
agrees that Agent shall have the continuing, exclusive right to apply and
reapply same against the Obligations, in such manner as Agent deems advisable,
notwithstanding any entry by Agent in its records.  If, as a result of Agent’s
receipt of Payment Items or proceeds of Collateral, a credit balance exists, the
balance shall not accrue interest in favor of Obligors and shall be made
available to Borrowers as long as no Default or Event of Default exists.

 

7.2.2.      Cash Collateral.  Any Cash Collateral may be invested, in Agent’s
discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement, understanding or course of dealing with any
Obligor, and shall have no responsibility for any investment or loss.  Each
Obligor hereby grants to Agent, for the benefit of Secured Parties, a security
interest in all Cash Collateral held from time to time and all proceeds thereof,
as security for the Obligations, whether such Cash Collateral is held in the
Cash Collateral Account or elsewhere.  Agent may apply Cash Collateral to the
payment of any Obligations, in such order as Agent may elect, as they become due
and payable.  The Cash

 

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Collateral Account and all Cash Collateral shall be under the sole dominion and
control of Agent.  No Obligor or other Person claiming through or on behalf of
any Obligor shall have any right to any Cash Collateral, until payment in full,
in cash of all Obligations and the occurrence of the Commitment Termination
Date.

 

7.3.         Real Estate Collateral.  The Obligations shall be secured by
Mortgages upon (x) all Real Estate owned by Obligors described on Schedule 7.3
and (y) all leasehold interests in Real Estate described on Schedule 7.3.  The
Mortgages shall be duly recorded, at Borrowers’ expense, in each office where
such recording is required to constitute a fully perfected Lien on the Real
Estate covered thereby.  If any Obligor acquires (or otherwise desires to
mortgage) any fee or leasehold interest in any Real Estate after the Closing
Date, the Borrower Agent shall within ten (10) Business Days furnish to Agent a
description of any such Real Estate in detail satisfactory to Agent and, upon
written request of Agent (or the at the election of the Borrower Agent), the
applicable Obligor shall forthwith (but in any event within sixty (60) days),
(i) execute, deliver and record a Mortgage sufficient to create a first priority
perfected Lien (or, where such Real Estate is subject to Permitted Purchase
Money Debt and the documents evidencing such Debt permit Agent to hold a lien
junior in priority on such Real Estate, a Lien junior in priority) in favor of
Agent on such Real Estate and (ii) deliver all Related Real Estate Documents. 
Notwithstanding anything to the contrary in this Section 7.3, the Agent agrees
that it shall not request that any Obligor mortgage to the Agent any Real Estate
(i) encumbered by Permitted Purchase Money Debt, the terms of which expressly
prohibit a Lien junior in priority on such Real Estate or (ii) having a value of
less than (x) $5,000,000, individually or (y) $25,000,000, in the aggregate for
all such Real Estate; provided that, for the avoidance doubt, the foregoing
restriction shall not obligate the Agent to release any Lien on Real Estate or
other Collateral in existence on the Fourth Amendment Closing Date.  The Agent
may amend Schedule 7.3 from time to time to reflect thereon any Real Estate that
constitutes Eligible Real Estate.

 

7.4.         Other Collateral.

 

7.4.1.      Commercial Tort Claims.  Obligors shall promptly notify Agent in
writing if Parent or any Subsidiary has a Commercial Tort Claim (other than, as
long as no Event of Default exists, a Commercial Tort Claim for less than
$3,000,000) and, upon Agent’s request, shall promptly execute such documents and
take such actions as Agent deems appropriate (including amending Schedule
7.1(c))to confer upon Agent (for the benefit of Secured Parties) a duly
perfected, first priority (subject to Permitted Liens entitled to priority under
Applicable Law) Lien upon such claim.

 

7.4.2.      Certain After-Acquired Collateral.  Obligors shall promptly (or, in
the case of Intellectual Property, within 20 Business Days after the first day
of each Fiscal Quarter) notify Agent in writing if, after the Closing Date,
Parent or any Subsidiary obtains any interest in any Collateral consisting of
Deposit Accounts, Chattel Paper, Documents, Instruments, Intellectual Property
that is registered or subject to a pending application for
registration, Investment Property or Letter-of-Credit Rights which has not yet
been perfected and, upon Agent’s reasonable request, shall promptly execute such
documents and take such actions as Agent deems reasonably appropriate to effect
Agent’s duly perfected, first priority (subject to Permitted Liens entitled to
priority under Applicable Law) Lien upon such Collateral, including obtaining
any appropriate possession, control agreement or Lien Waiver to the extent
required by Section 10.1.10.  If any Collateral is in the possession of a third
party, at Agent’s request, Obligors shall use commercially reasonable efforts to
obtain an acknowledgment that such third party holds the Collateral for the
benefit of Agent.

 

7.5.         No Assumption of Liability.  The Lien on Collateral granted
hereunder is given as security only and shall not subject Agent or any Lender
to, or in any way modify, any obligation or liability of the Obligors relating
to any Collateral.

 

7.6.         Further Assurances.  Promptly upon request, Obligors shall deliver
such instruments, assignments, title certificates, or other documents or
agreements, and shall take such actions, as Agent

 

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reasonably deems appropriate under Applicable Law to evidence or perfect its
Lien on any Collateral, or otherwise to give effect to the intent of this Loan
Agreement.  Each Obligor authorizes Agent to file any financing statement that
indicates the Collateral as “all assets” or “all personal property” of such
Obligor, or words to similar effect, and ratifies any action taken by Agent
before the Closing Date to effect or perfect its Lien on any Collateral.

 

7.7.         Foreign Subsidiary Stock.  Notwithstanding Section 7.1, the
Collateral shall include only 65% of the voting securities of any first tier
Foreign Subsidiary.

 

7.8.         Lien Releases.  (a) Upon the occurrence of payment, in full, in
cash of the Obligations (other than unmatured Contingent Obligations) and the
occurrence of the Commitment Termination Date or (b) with respect to any
Collateral that is the subject of an Asset Disposition which Borrowers certify
in writing to Agent is a Permitted Asset Disposition or a disposition of
Equipment permitted under Section 8.4.2 (and Agent may rely conclusively on any
such certificate without further inquiry), Agent will, at the Borrowers’
expense, execute and deliver to the applicable Obligor such documents as such
Obligor may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Loan
Documents.

 

SECTION 8.        COLLATERAL ADMINISTRATION

 

8.1.         Borrowing Base Certificates.  The Borrowers shall deliver to the
Agent and each Co-Collateral Agent (and Agent shall promptly deliver same to
Lenders) (i) at all times prior to the commencement of a Trigger Event Period,
not later than the twelfth (12th) Business Day after the immediately preceding
fiscal month end, a Borrowing Base Certificate prepared as of the close of
business of the previous month and (ii) at all times (x) after the occurrence
and during the continuation of an Event of Default or (y) after the first date
on which Excess Availability for five consecutive Business Days is less than the
greater of (i) $65,000,000 or (ii) 12.5% of the lesser of (A) the aggregate
Commitments at such time and (B) the Aggregate Borrowing Base at such time, not
later than the last Business Day of each week, a Borrowing Base Certificate
prepared as of the close of business of the previous week, with such weekly
Borrowing Base Certificates (other than those coinciding with a month end)
updated for purchases and sales of Inventory from the prior week in a manner
consistent with the past practices of the Obligors and reasonably approved by
Agent; provided, that at such time as, in the case of clause (x) above, all
Events of Default have been waived or remedied in accordance with the terms of
the Loan Documents and, in the case of clause (y) above, the date that Excess
Availability for a period of 60 consecutive calendar days exceeds the greater of
(1) $65,000,000 or (2) 12.5% of the lesser of (I) the aggregate Commitments at
such time and (II) the Aggregate Borrowing Base at such time, then the Borrowers
shall deliver the Borrowing Base Certificate pursuant to clause (i) above.  The
Borrower may elect, pursuant to a written irrevocable notice to the Agent, to
deliver Borrowing Base Certificates on a weekly basis during the fiscal months
of October through January 15th of such Fiscal Year, provided that notice of
such election is received by the Agent no later than the 15th of September of
such Fiscal Year.  All calculations of Tranche A Excess Availability, and the
Tranche A-1 Excess Availability and Excess AvailabilityUtilization Amount in any
Borrowing Base Certificate shall originally be made by Borrower Agent and
certified by a Senior Officer of the Borrower Agent (with such certification to
be in such Person’s capacity as a Senior Officer of the Borrower Agent and not
in such Person’s individual capacity), provided that Agent may from time to time
review and adjust any such calculation (a) to reflect its reasonable estimate of
declines in value of any Collateral, due to collections received in the Dominion
Accounts or otherwise; (b) to adjust advance rates to reflect changes in
dilution, quality, mix and other factors affecting Collateral; and (c) to the
extent the calculation is not made in accordance with this Loan Agreement or
does not accurately reflect the Availability Reserve.

 

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8.2.         Administration of Accounts and Credit Card Receivables.

 

8.2.1.      Credit Card Notifications; Records.  Schedule 8.2.1 sets forth, as
of the Fourth Amendment Closing Date, all arrangements to which any Obligor is a
party with respect to the payment to any Obligor of the proceeds of credit card
charges for sales by such Obligor.  The Obligors shall deliver to Agent Credit
Card Notifications instructing each of their Credit Card Issuers or Credit Card
Processors to transfer all amounts owing by such processor or issuer to an
Obligor directly to the Borrower Account or a Dominion Account, with such Credit
Card Notifications to be executed by each relevant Obligor and accompanied by
evidence that such Credit Card Notifications have been received by such Credit
Card Issuers or Credit Card Processors.  The Obligors shall exercise
commercially reasonable efforts to obtain acknowledgments to such Credit Card
Notifications from each of the Credit Card Issuers and Credit Card Processors. 
Each Obligor shall keep accurate and complete records of its Credit Card
Receivables, and shall submit to Agent Credit Card Receivables reports,
including all additions and reductions (cash and non-cash) with respect to
Credit Card Receivables of the Obligors in each case accompanied by such
supporting detail and documentation as shall be reasonably requested by Agent,
in form reasonably satisfactory to Agent, on such periodic basis as Agent may
request.

 

8.2.2.      Account Verification.  Whether or not a Default or Event of Default
exists, Agent shall have the right at any time, in the name of Agent, any
designee of Agent or any Obligor to verify the validity, amount or any other
matter relating to any Accounts of Obligors by mail, telephone or otherwise. 
Obligors shall cooperate fully with Agent in an effort to facilitate and
promptly conclude any such verification process.

 

8.2.3.      Maintenance of Dominion Accounts.  Obligors shall maintain Dominion
Accounts pursuant to lockbox or other arrangements reasonably acceptable to
Agent.  Obligors shall obtain an agreement (in form and substance reasonably
satisfactory to Agent) from each lockbox servicer and Dominion Account bank,
establishing Agent’s control over and Lien in the lockboxes or Dominion
Accounts, requiring immediate deposit of all remittances received in the lockbox
to a Dominion Account and, if such Dominion Account is not maintained with Bank
of America, directing, in accordance with Section 5.6, the account bank to
transfer at the end of each Business Day available funds in the Dominion
Accounts to the Borrower Account consistent with past practice, and waiving
offset rights of such servicer or bank against any funds in the lockboxes or
Dominion Accounts, except offset rights for customary administrative charges. 
Neither Agent nor Lenders assume any responsibility to Obligors for any lockbox
arrangements or Dominion Accounts, including any claim of accord and
satisfaction or release with respect to any Payment Items accepted by any bank.

 

8.2.4.      Proceeds of Collateral.  Obligors shall request in writing and
otherwise take all reasonable steps to ensure that all payments on Accounts or
otherwise relating to Collateral are made directly to a Dominion Account (or a
lockbox relating to a Dominion Account).  If any Obligor or Subsidiary receives
cash or Payment Items with respect to any Collateral, it shall hold same in
trust for Agent and promptly deposit same into a Dominion Account.

 

8.3.         Administration of Inventory.

 

8.3.1.      Records and Reports of Inventory.  Each Obligor shall keep accurate
and complete records of its Inventory, including costs and daily withdrawals and
additions, and shall submit to Agent inventory reports in form reasonably
satisfactory to Agent, on such periodic basis as Agent may request.  Each
Obligor shall conduct a physical inventory at least once per calendar year (and
on a more frequent basis if requested by Agent when an Event of Default exists)
and periodic cycle counts consistent with historical practices, and shall
provide to Agent a report based on each such inventory and count promptly upon
completion thereof, together with such supporting information as Agent may
request.  Agent may participate in and observe each inventory or physical count.

 

8.3.2.      Returns of Inventory.  No Obligor shall return any Inventory to a
supplier, vendor or other Person, whether for cash, credit or otherwise, unless
(a) such return is in the Ordinary Course of

 

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Business and (b) no Event of Default, Tranche A Overadvance or Tranche A-1
Overadvance exists or would result therefrom.

 

8.3.3.      Acquisition, Sale and Maintenance.  No Obligor shall acquire or
accept any Inventory which is part of the Borrowing Base on consignment or
approval.  No Obligor shall sell any Inventory which is part of the Borrowing
Base on consignment or approval.  Obligors shall use, store and maintain all
Inventory with reasonable care and caution, in accordance with applicable
standards of any insurance and in conformity with all Applicable Law, and shall
make current rent payments (within applicable grace periods provided for in
leases) at all locations where any Collateral is located.

 

8.4.         Administration of Equipment.

 

8.4.1.      Records and Schedules of Equipment.  Each Obligor shall keep
accurate and complete records of its Equipment, including kind, quality,
quantity, cost, acquisitions and dispositions thereof, and shall submit to
Agent, on such periodic basis as Agent may request, a current schedule thereof,
in form reasonably satisfactory to Agent.  Promptly upon request, Obligors shall
deliver to Agent evidence of their ownership or interests in any Equipment.

 

8.4.2.      Dispositions of Equipment.  No Obligor shall sell, lease or
otherwise dispose of any Equipment, without the prior written consent of Agent,
other than (a) a Permitted Asset Disposition; and (b) replacement of Equipment
that is worn, damaged or obsolete with Equipment of like function and value, if
the replacement Equipment is acquired substantially contemporaneously with such
disposition and is free of Liens (other than Permitted Liens).

 

8.4.3.      Condition of Equipment.  Except where failure to do so would not
reasonably be expected to result in a Material Adverse Effect, the Equipment is
in good operating condition and repair, and all necessary replacements and
repairs have been made so that the value and operating efficiency of the
Equipment is preserved at all times, reasonable wear and tear excepted.  Except
where failure to do so would not reasonably be expected to result in a Material
Adverse Effect, each Obligor shall ensure that the Equipment is mechanically and
structurally sound, and capable of performing the functions for which it was
designed, in accordance with the manufacturer’s published and recommended
specifications.

 

8.5.         Administration of Deposit Accounts.  Schedule 8.5 sets forth all
Deposit Accounts maintained by Obligors as of the Closing Date (or, after any
update to such Schedule 8.5 in accordance with the last sentence of this
Section 8.5, as of the date of such amendment). Each Obligor shall take all
actions necessary to establish Agent’s control (pursuant to an Account Control
Agreement) of each Deposit Account other than:

 

(i)            each Deposit Account exclusively used for payroll, payroll taxes,
or employee benefits as set forth in Schedule 8.5(a) or any replacement account
exclusively used for payroll, payroll taxes or employee benefits;

 

(ii)           each disbursement account of the Obligors as set forth on
Schedule 8.5(a) or any replacement disbursement account that is reasonably
acceptable to Agent;

 

(iii)          each trust account listed on Schedule 8.5(b) maintained at U.S.
Bank National Association (or any replacement account thereof) so long as the
average account balance in the accounts described in this clause (iii) is in an
amount consistent with the ordinary course of business and past practices of the
Obligors and, in any event, does not exceed (x) at any time other than during a
Trigger Event Period, $10,000,000 in the aggregate or (y) after the commencement
and during the continuation of a Trigger Event Period, $2,000,000 in the
aggregate; and

 

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(iv)          each Deposit Account, other than those described in clauses
(i) through (iii) above, containing not more than $75,000 at any time; provided
that the aggregate amount contained in all such accounts under this clause
(iv) shall not exceed $750,000 at any time; provided, however, that not later
than ten (10) Business Days after the commencement of the first Trigger Event
Period to occur after the Closing Date, the Obligors shall either (a) take all
actions necessary to establish the Agent’s control of each such Deposit Account
referred to in this clause (iv) or (b) close the Deposit Accounts referenced in
this clause (iv) and transfer all balances and all related deposit activity to a
Deposit Account over which the Agent’s control has already been established.

 

Each Obligor shall be the sole account holder of each Deposit Account and shall
not allow any other Person (other than the Agent and, subject to the Junior Debt
Intercreditor Agreement, any Junior Lien Agent) to have control over a Deposit
Account.  Each Obligor shall promptly notify Agent of any opening or closing of
a Deposit Account and, at the request of Agent, will amend Schedule 8.5 (and
Schedule 8.5(a) or Schedule 8.5(b), if applicable) to reflect the same.

 

8.6.         General Provisions.

 

8.6.1.      Location of Collateral.  All tangible items of Collateral, other
than (i) tangible Inventory having an aggregate value of no more than $500,000,
and (ii) Inventory in transit, shall at all times be kept by Obligors at the
business locations set forth in Schedule 8.6.1, except that Obligors may
(a) make sales or other dispositions of Collateral in accordance with
Section 10.2.6; and (b) move Collateral to another location in the United
States, so long as, if such Collateral has an aggregate value of more than
$500,000 the Borrower Agent has provided Agent with 30 Business Days prior
written notice thereof.

 

8.6.2.      Insurance of Collateral; Condemnation Proceeds.

 

(a)           Each Obligor shall maintain insurance with respect to the
Collateral, covering casualty, hazard, public liability, theft, malicious
mischief, and such other risks, in such amounts, with such endorsements, and
with such insurers as are reasonably satisfactory to Agent.  All proceeds under
each policy shall be payable to Agent.  From time to time upon request, Obligors
shall deliver to Agent the originals or certified copies of its insurance
policies and updated flood plain searches.  Unless Agent shall agree otherwise,
each policy shall include reasonably satisfactory endorsements (i) showing Agent
as sole loss payee or additional insured, as appropriate; (ii) requiring 30 days
prior written notice to Agent in the event of cancellation of the policy for any
reason whatsoever; and (iii) specifying that the interest of Agent shall not be
impaired or invalidated by any act or neglect of any Obligor or the owner of the
Property, nor by the occupation of the premises for purposes more hazardous than
are permitted by the policy.  If any Obligor fails to provide and pay for such
insurance, Agent may, at its option, but shall not be required to, procure the
insurance and charge Obligors therefor.  Each Obligor agrees to deliver to
Agent, promptly as rendered, copies of all reports made to insurance companies. 
While no Event of Default exists, Obligors may settle, adjust or compromise any
insurance claim, as long as the proceeds are delivered to Agent.  If an Event of
Default exists, only Agent shall be authorized to settle, adjust and compromise
such claims.

 

(b)           Any proceeds of insurance (other than proceeds from workers’
compensation or D&O insurance) and any awards arising from condemnation of any
Collateral shall be paid to Agent.

 

(c)           If requested by Obligors in writing within 30 days after Agent’s
receipt of any insurance proceeds or condemnation awards relating to any loss or
destruction of Equipment or Real Estate, Obligors may use such proceeds or
awards to repair or replace such Equipment or Real Estate (and until so used,
the proceeds shall, at the Borrowers’ election be held by Agent as Cash
Collateral) as long as (i) no Default or Event of Default exists; (ii) such
repair or replacement is promptly undertaken and concluded; (iii) the repaired
or replaced Property is free of Liens, other than Permitted Liens; (iv) Obligors
comply with disbursement procedures for such repair or replacement as Agent may
reasonably require; and (v) the aggregate amount of such proceeds or awards from
any single casualty or condemnation does not exceed

 

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$10,000,000. Any such proceeds or awards not applied to repair or replace such
Equipment or Real Estate in accordance with this Section 8.6.2(c) shall be
applied, by the Agent, to the Obligations in accordance with Section 5.5.

 

8.6.3.      Protection of Collateral.  All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes (other than Excluded Taxes) payable with respect to any Collateral
(including any sale thereof), and all other payments required to be made by
Agent to any Person to realize upon any Collateral, shall be borne and paid by
Obligors.  Agent shall not be liable or responsible in any way for the
safekeeping of any Collateral, for any loss or damage thereto (except for
reasonable care in its custody while Collateral is in Agent’s actual
possession), for any diminution in the value thereof, or for any act or default
of any warehouseman, carrier, forwarding agency or other Person whatsoever, but
the same shall be at Obligors’ sole risk.

 

8.6.4.      Defense of Title to Collateral.  Each Obligor shall at all times
defend its title to Collateral and Agent’s Liens therein against all Persons,
claims and demands whatsoever, except Permitted Liens.

 

8.7.         Power of Attorney.  Each Obligor hereby irrevocably constitutes and
appoints Agent (and all Persons designated by Agent) as such Obligor’s true and
lawful attorney (and agent-in-fact) for the purposes provided in this
Section 8.7.  Agent, or Agent’s designee, may, during the continuation of an
Event of Default, without notice and in either its or an Obligor’s name, but at
the cost and expense of Obligors:

 

(a)           Endorse an Obligor’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and

 

(b)           (i) Notify any Account Debtors of the assignment of their
Accounts, demand and enforce payment of Accounts, by legal proceedings or
otherwise, and generally exercise any rights and remedies with respect to
Accounts; (ii) settle, adjust, modify, compromise, discharge or release any
Accounts or other Collateral, or any legal proceedings brought to collect
Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral
upon such terms, for such amounts and at such times as Agent deems advisable;
(iv) take control, in any manner, of any proceeds of Collateral; (v) prepare,
file and sign an Obligor’s name to a proof of claim or other document in a
bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of
Lien or similar document; (vi) receive, open and dispose of mail addressed to an
Obligor, and notify postal authorities to change the address for delivery
thereof to such address as Agent may designate; (vii) endorse any Chattel Paper,
Document, Instrument, invoice, freight bill, bill of lading, or similar document
or agreement relating to any Accounts, Inventory or other Collateral; (viii) use
an Obligor’s stationery and sign its name to verifications of Accounts and
notices to Account Debtors; (ix) use the information recorded on or contained in
any data processing equipment and computer hardware and software relating to any
Collateral; (x) make and adjust claims under policies of insurance; (xi) take
any action as may be necessary or appropriate to obtain payment under any letter
of credit or banker’s acceptance for which an Obligor is a beneficiary; and
(xii) take all other actions as Agent deems reasonably appropriate to fulfill
any Obligor’s obligations under the Loan Documents.

 

SECTION 9.        REPRESENTATIONS AND WARRANTIES

 

9.1.         General Representations and Warranties.  To induce Agent and
Lenders to enter into this Loan Agreement and to make available the Commitments,
Loans and Letters of Credit, each Obligor represents and warrants that:

 

9.1.1.      Organization and Qualification.  Each Obligor and Subsidiary is duly
organized, validly existing and in good standing or subsisting, as applicable
under the laws of the jurisdiction of its organization.  Each Obligor and
Subsidiary is duly qualified, authorized to do business and in good standing

 

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as a foreign corporation in each jurisdiction where failure to be so qualified
could reasonably be expected to have a Material Adverse Effect.

 

9.1.2.      Power and Authority.  Each Obligor is duly authorized to execute,
deliver and perform its Loan Documents.  The execution, delivery and performance
of the Loan Documents by each Obligor have been duly authorized by all necessary
action, and do not (a) require any consent or approval of any holders of Equity
InterestsCapital Stock of any Obligor, other than those already obtained;
(b) contravene the Organic Documents of any Obligor; (c) violate or cause a
material default under any Applicable Law or Material Contract; or (d) result in
or require the imposition of any Lien (other than Permitted Liens and Liens
granted hereunder) on any Property of any Obligor.

 

9.1.3.      Enforceability.  Each Loan Document is a legal, valid and binding
obligation of each Obligor party thereto, enforceable against each Obligor in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles.

 

9.1.4.      Capital Structure.  Schedule 9.1.4 shows as of the Fourth Amendment
Closing Date, for each Obligor and Subsidiary (other than the Parent), its name,
its jurisdiction of organization, its duly authorized and validly issued Equity
InterestsCapital Stock, the holders of its Equity InterestsCapital Stock, and
all agreements binding on such holders with respect to their Equity
InterestsCapital Stock.  Each Obligor has good title to its Equity
InterestsCapital Stock in its Subsidiaries, subject only to Agent’s Lien and to
Junior Liens, and all such Equity Interests areCapital Stock is duly issued,
fully paid and non-assessable.  There are no outstanding options to purchase,
warrants, subscription rights, agreements to issue or sell, convertible
interests, phantom rights or powers of attorney relating to any Equity
InterestsCapital Stock of any Obligor (other than the Parent) or Subsidiary.

 

9.1.5.      Corporate Names; Locations.  During the five years preceding the
Fourth Amendment Closing Date, except as shown on Schedule 9.1.5, no Obligor or
Subsidiary has been known as or used any corporate, fictitious or trade names,
has been the surviving corporation of a merger or combination, or has acquired
any substantial part of the assets of any Person.  The chief executive offices
and other places of business of Obligors and Subsidiaries as of the Fourth
Amendment Closing Date are shown on Schedule 8.6.1.

 

9.1.6.      Title to Properties; Priority of Liens.  Each Obligor and Subsidiary
has good and marketable title to (or valid leasehold interests in) all of its
Real Estate, and good title to all of its personal Property, including all
Property reflected in any financial statements delivered to Agent or Lenders, in
each case free of Liens except Permitted Liens.  Each Obligor and Subsidiary has
paid and discharged all lawful claims that, if unpaid, could become a Lien on
its Properties, other than Permitted Liens.  All Liens of Agent in the
Collateral are duly perfected, first priority (subject to Permitted Liens
entitled to priority under Applicable Law) Liens.

 

9.1.7.      Security Documents.  The Security Documents are effective to create
in favor of the Agent a legal, valid, perfected and enforceable first priority
(subject to Permitted Liens entitled to priority under Applicable Law) security
interest in and Lien upon the Collateral.

 

9.1.8.      Financial Statements.  The consolidated and, if applicable, combined
balance sheets, and related statements of income, cash flow and shareholder’s
equity, of Obligors and Subsidiaries that have been and are hereafter delivered
to Agent and Lenders, pursuant to Section 6.1(n) or otherwise, are prepared in
accordance with GAAP, and fairly present in all material respects the financial
positions and results of operations of Obligors and Subsidiaries at the dates
and for the periods indicated, subject, in the case of interim statements, to
normal year-end adjustments.  All projections delivered from time to time to
Agent and Lenders have been prepared in good faith, based on reasonable
assumptions in light of the circumstances at such time.  Since January 30, 2010
there have been no changes in the financial condition

 

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of any Obligor or Subsidiary that, alone or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.  Parent and its Subsidiaries, on
a consolidated basis, are Solvent.  Each Borrower, individually, is Solvent.

 

9.1.9.      Surety Obligations.  No Obligor or Subsidiary is obligated as surety
or indemnitor under any bond or other contract that assures payment or
performance of any obligation of any Person, except as is not prohibited
hereunder.

 

9.1.10.    Taxes.  Each Obligor and Subsidiary has filed all material federal,
state and local tax returns and other reports that it is required by law to
file, and has paid, or made provision for the payment of, all material Taxes
upon it, its income and its Properties that are due and payable, except to the
extent being Properly Contested.  The provision for Taxes on the books of each
Obligor and Subsidiary is adequate for all years not closed by applicable
statutes, and for its current Fiscal Year.

 

9.1.11.    Brokers.  There are no brokerage commissions, finder’s fees or
investment banking fees payable in connection with any transactions contemplated
by the Loan Documents.

 

9.1.12.    Intellectual Property.  Each Obligor and Subsidiary owns or has the
lawful right to use all Intellectual Property necessary for the conduct of its
business, without, to any Obligor’s knowledge, conflict with any rights of
others.  There is no pending or, to any Obligor’s knowledge, threatened material
Intellectual Property Claim with respect to any Obligor, any Subsidiary or any
of their Property (including any Intellectual Property).  All Intellectual
Property registered with the U.S. Patent and Trademark Office which is owned by
any Obligor or Subsidiary on the Fourth Amendment Closing Date is shown on
Schedule 9.1.12.

 

9.1.13.    Governmental Approvals.  Each Obligor and Subsidiary has, is in
compliance with, and is in good standing with respect to, all material
Governmental Approvals necessary to conduct its business and to own, lease and
operate its Properties.  All necessary material import, export or other
licenses, permits or certificates for the import or handling of any goods or
other Collateral have been procured and are in effect, and Obligors and
Subsidiaries have complied with all foreign and domestic laws with respect to
the shipment and importation of any goods or Collateral, except where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

 

9.1.14.    Compliance with Laws.  Each Obligor and Subsidiary has duly complied,
and its Properties and business operations are in compliance, in all material
respects with all Applicable Law, except where noncompliance could not
reasonably be expected to have a Material Adverse Effect.  There have been no
citations, notices or orders of material noncompliance issued to any Obligor or
Subsidiary under any Applicable Law.

 

9.1.15.    Compliance with Environmental Laws.  Except as disclosed on Schedule
9.1.15 or as could not reasonably be expected to have a Material Adverse Effect,
(a) no Obligor’s or Subsidiary’s past or present operations, Real Estate or
other Properties are subject to any federal, state or local investigation to
determine whether any remedial action is needed to address any environmental
pollution, hazardous material or environmental clean-up, (b) no Obligor or
Subsidiary has received any Environmental Notice, (c) no Obligor or Subsidiary
has Environmental Liabilities with respect to any Environmental Release,
environmental pollution or Hazardous Material on any Real Estate now or
previously owned, leased or operated by it, or regarding any Environmental
Release at or under any off-site third party property, (d)  no Obligor is party
to, and no Obligor and no real property currently (or to the knowledge of any
Obligor previously) owned, leased, subleased, operated or otherwise occupied by
or for any Obligor is subject to or the subject of, any Contractual Obligation
or any pending (or, to the knowledge of any Obligor, threatened) order, action,
investigation, suit, proceeding, audit, claim, demand, dispute or notice of
violation or of potential liability or similar notice under or pursuant to any
Environmental Law other than those that, in the aggregate, are not reasonably
likely to result in Material Adverse Effect and the

 

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representations and warranties contained in the Environmental Agreement are true
and correct in all material respects on the Closing Date.

 

9.1.16.    Burdensome Contracts.  No Obligor or Subsidiary is a party or subject
to any contract, agreement or charter restriction that could reasonably be
expected to have a Material Adverse Effect.  Except as described on Schedule
9.1.16, no Obligor or Subsidiary is party or subject to any material Restrictive
Agreement on the Closing Date.  No material Restrictive Agreement to which any
Obligor or Subsidiary is a party prohibits the execution or delivery of any Loan
Documents by an Obligor or the performance by an Obligor of any obligations
thereunder.

 

9.1.17.    Litigation.  Except as shown on Schedule 9.1.17, there are no
proceedings or investigations pending or, to any Obligor’s knowledge, threatened
in writing against any Obligor or Subsidiary, or any of their businesses,
operations, Properties or conditions, that (a) relate to any Loan Documents or
transactions contemplated thereby; (b) as of the Fourth Amendment Closing Date,
could reasonably be expected to result in damages or penalties in excess of
$10,000,000 (net of insurance proceeds which the Borrowers reasonably believe
will cover such claim or claims) or (c) could reasonably be expected to have a
Material Adverse Effect.  No Obligor or Subsidiary is in default with respect to
any order, injunction or judgment of any Governmental Authority.

 

9.1.18.    Insurance.  The properties of the Obligor and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Obligor, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Obligor or the applicable Subsidiary
operates.

 

9.1.19.    No Defaults.  No Default or Event of Default has occurred and is
continuing.  No Obligor or Subsidiary is in default under any Material Contract,
which default could reasonably be expected to have a Material Adverse Effect. 
There is no basis upon which any party (other than an Obligor or Subsidiary)
could terminate a Material Contract prior to its scheduled termination date,
which termination could reasonably be expected to have a Material Adverse
Effect.

 

9.1.20.    ERISA.  No Obligor or Subsidiary has any Multiemployer Plan or
Foreign Plan.

 

9.1.21.    Trade Relations.  There exists no actual or, to the knowledge of any
Obligor, threatened termination, limitation or adverse modification of any
business relationship between any Obligor or Subsidiary and any customer or
supplier, or any group of customers or suppliers, who individually or in the
aggregate are material to the business of such Obligor or Subsidiary.  There
exists no condition or circumstance that could reasonably be expected to impair
the ability of any Obligor or Subsidiary to conduct its business at any time
hereafter in substantially the same manner as conducted on the Closing Date.

 

9.1.22.    Labor Relations.  Except as described on Schedule 9.1.22, on the
Fourth Amendment Closing Date, no Obligor or Subsidiary is party to or bound by
any (a) management agreement, (b) consulting agreement where the aggregate
obligations of such Obligor or Subsidiary thereunder are in excess of $500,000
or (c) collective bargaining agreement.  There are no material grievances,
disputes or controversies with any union or other organization of any Obligor’s
or Subsidiary’s employees, or, to any Obligor’s knowledge, any asserted or
threatened strikes, work stoppages or demands for collective bargaining.

 

9.1.23.    Not a Regulated Entity.  No Obligor is (a) required to be registered
as an “investment company” within the meaning of the Investment Company Act of
1940, as amended; or (b) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.

 

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9.1.24.    Margin Stock.  No Obligor or Subsidiary is engaged, principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.  No Loan proceeds or Letters
of Credit will be used by Obligors to purchase or carry, or to reduce or
refinance any Debt incurred to purchase or carry, any Margin Stock or for any
related purpose governed by Regulations T, U or X of the Board of Governors.

 

9.1.25.    Plan Assets.  No Obligor is an entity deemed to hold “plan assets”
within the meaning of 29 C.F.R. §2510.3-101 of any “employee benefit plan” (as
defined in Section 3(3) of ERISA) that is subject to Title I of ERISA or any
“plan” (within the meaning of Section 4975 of the Internal Revenue Code),
andIRC), and, subject to the accuracy of the representations in Section 13.5 of
this Loan Agreement, neither the execution of this Loan Agreement nor the
funding of any Loans gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue CodeIRC.

 

9.1.26.    Complete Disclosure.  No (x) Loan Document or (y) written information
provided by or on behalf of any Obligor and included in the confidential
information memorandum, dated February 2011, and delivered to the Lenders in
connection with the syndication of the Commitments, contains any untrue
statement of a material fact, nor fails to disclose any material fact necessary
to make the statements contained therein, taken as a whole, not materially
misleading in light of the circumstances under which they were delivered;
provided that to the extent any such document, certificate or statement was
based upon or constitutes a forecast or projection, each Obligor represents only
that it acted in good faith and utilized assumptions believed by it to be
reasonable at the time made and due care in the preparation of such document,
certificate or statement, it being understood that forecasts and projections are
subject to uncertainties and contingencies and no assurance can be given that
any forecast or projection will be realized.

 

9.1.27.    Anti-Terrorism.  No Obligor, nor its Subsidiaries, nor, to the
knowledge of any Obligor and its Subsidiaries, any director, officer, employee,
agent, affiliate or representative thereof, is an individual or entity that is
(i) currently the subject of any Sanctions, (ii) included on OFAC’s List of
Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions
Targets and the Investment Ban List, or any similar list enforced by any other
relevant sanctions authority or (iii) located, organized or resident in a
Designated Jurisdiction.

 

9.1.28.    Anti-Corruption Laws.  Each Obligor and its Subsidiaries have
conducted their businesses in compliance with the United States Foreign Corrupt
Practices Act of 1977, the UK Bribery Act 2010, and other similar
anti-corruption legislation in other jurisdictions, and have instituted and
maintained policies and procedures designed to promote and achieve compliance
with such laws.

 

9.1.29.    EEA Financial Institution.  No Obligor is an EEA Financial
Institution.

 

SECTION 10.      COVENANTS AND CONTINUING AGREEMENTS

 

10.1.       Affirmative Covenants.  For so long as any Commitments or
Obligations are outstanding, each Obligor shall, and shall cause each Subsidiary
to:

 

10.1.1.    Inspections; Appraisals.  (a)              Permit Agent from time to
time, subject (except when a Default or Event of Default exists) to reasonable
notice and normal business hours, to visit and inspect the Properties of any
Obligor, inspect, audit and make extracts from any Obligor’s books and records,
and discuss with its officers, employees, agents, advisors and independent
accountants such Obligor’s business, financial condition, assets, prospects and
results of operations.  Lenders may participate in any such visit or inspection,
at their own expense.  Neither Agent nor any Lender shall have any duty to any
Obligor to make any inspection, nor to share any results of any inspection,
appraisal or report with any Obligor.  To the extent any appraisal or other
information is shared by Agent or a Lender with any Obligor, such Obligor
acknowledges that it was prepared by Agent and Lenders for their purposes and
Obligors shall

 

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not be entitled to rely upon it.  The Agent shall provide each Co-Collateral
Agent with all final Collateral appraisals and audit reports promptly after the
Agent’s receipt thereof.

 

(b)           Reimburse Agent for all reasonable and documented out-of-pocket
charges, costs and expenses of Agent in connection with (i) examinations of any
Obligor’s books and records or any other financial or Collateral matters as
Agent deems appropriate, (x) other than those times described in clause (y),
once per Loan Year or (y) at all times during the twelve (12) month period
following any date that Excess Availability for a period of five (5) consecutive
Business Days, is less than 30% of the lesser of (A) the aggregate Commitments
at such time and (B) the Aggregate Borrowing Base at such time, up to two times
per Loan Year; (ii) appraisals of Inventory (x) other than those times described
in clause (y), once per Loan Year or (y) at all times during the twelve (12)
month period following any date that Excess Availability for a period of five
(5) consecutive Business Days, is less than 30% of the lesser of (A) the
aggregate Commitments at such time and (B) the Aggregate Borrowing Base at such
time, up to two times per Loan Year; (iii) appraisals of Eligible Real Estate,
in form and detail reasonably satisfactory to Agent, (x) at all times other than
those described in clause (y), once per Loan Year if so requested by Agent or
(y) at all times during the twelve (12) month period following any date that
Excess Availability for a period of five (5) consecutive Business Days is less
than 15% of the lesser of (x) the aggregate Commitments at such time and (y) the
Aggregate Borrowing Base at such time, twice per Loan Year if so requested by
Agent; and (iv) environmental assessment reports as Agent deems appropriate in
its reasonable discretion, with respect to the Eligible Real Estate of the
Obligors; provided, however, that (x) during the occurrence and continuance of
an Event of Default, the Agent may conduct any examinations and appraisals in
its reasonable discretion without regard to any such limits and (y) if any
examination or appraisal is initiated during the occurrence and continuance of
an Event of Default, all reasonable and documented out-of-pocket charges, costs
and expenses therefor shall be reimbursed by Obligors without regard to such
limits.  Obligors shall pay Agent’s then standard charges for each day that an
employee of Agent or its Affiliates is engaged in any examination activities in
connection with the foregoing, and shall pay the standard charges of Agent’s
internal appraisal group.  This Section shall not be construed to limit Agent’s
right to conduct examinations or to obtain appraisals at any time in its
discretion, nor to use third parties for such purposes.

 

10.1.2.    Financial and Other Information.  Keep adequate records and books of
account with respect to its business activities, in which proper entries are
made in accordance with GAAP reflecting all financial transactions; and furnish
to Agent and Lenders:

 

(a)           within 90 days after the close of each Fiscal Year, balance sheets
as of the end of such Fiscal Year and the related statements of income, cash
flow and shareholders’ equity for such Fiscal Year, on a consolidated basis for
Obligors and Subsidiaries, which consolidated statements shall all be in
reasonable detail and prepared in accordance with GAAP and applicable Securities
Laws, audited and accompanied by (i) a certification (without qualification as
to scope or “going concern” (or similar) qualification) by a firm of independent
certified public accountants of recognized standing selected by Borrowers and
reasonably acceptable to Agent (with the Agent hereby acknowledging and agreeing
that each of PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte & Touche
are acceptable), which certification shall be prepared in accordance with
generally accepted auditing standards and applicable Securities Laws and (ii) an
attestation report of such certified public accountants as to the Obligors’
internal controls pursuant to Section 404 of Sarbanes-Oxley, and shall set forth
in comparative form corresponding figures for the preceding Fiscal Year and
other information reasonably acceptable to Agent;

 

(b)           within 45 days after the end of each Fiscal Quarter (but within 60
days after the last Fiscal Quarter of each Fiscal Year), unaudited balance
sheets as of the end of such Fiscal Quarter and the related statements of income
and cash flow for such Fiscal Quarter and for the portion of the Fiscal Year
then elapsed, on a (i) consolidated basis for Obligors and Subsidiaries and
(ii) combined basis for Obligors and Subsidiaries other than the SPEs and
Passive Companies, setting forth in comparative form corresponding figures for
the preceding Fiscal Year as well as the applicable projections for such period
delivered under Section 10.1.2(f) and certified by the Borrower Agent pursuant
to a certificate signed on

 

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behalf of Borrower Agent by a Senior Officer of the Borrower Agent (with such
certification to be in such Person’s capacity as a Senior Officer of such
Obligor and not in such Person’s individual capacity) as prepared in accordance
with GAAP and fairly presenting in all material respects the financial position
and results of operations for such quarterly period, subject to normal year-end
adjustments and the absence of footnotes;

 

(c)           within 30 days after the end of each month (but within 60 days
after the last month in a Fiscal Year), unaudited balance sheets as of the end
of such month and the related statements of income and cash flow for such month
and for the portion of the Fiscal Year then elapsed, on a consolidated basis for
Parent and Subsidiaries, setting forth in comparative form corresponding figures
for the preceding Fiscal Year as well as the applicable projections for such
period delivered under Section 10.1.2(f) and certified by a Senior Officer (with
such certification to be in such Person’s capacity as a Senior Officer of such
Obligor and not in such Person’s individual capacity) of Borrower Agent as
prepared in accordance with GAAP and fairly presenting in all material respects
the financial position and results of operations for such month and period,
subject to normal year-end adjustments and the absence of footnotes;

 

(d)           concurrently with delivery of financial statements under clauses
(a) and (b) above, or more frequently if requested by Agent while an Event of
Default exists, a Compliance Certificate executed by a Senior Officer of
Borrower Agent (with such certification to be in such Person’s capacity as a
Senior Officer of Borrower Agent and not in such Person’s individual capacity)
certifying as to whether a Default or Event of Default has occurred and, if a
Default or Event of Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto;

 

(e)           concurrently with delivery of financial statements under clause
(a) above, and otherwise promptly after the request by Agent, copies of any
detailed audit reports or management letters submitted to the board of directors
(or the audit committee of the board of directors) of any Obligor by independent
accountants in connection with the accounts or books of any Obligor or any
Subsidiary, or any audit of any of them;

 

(f)            not later than 45 days after the beginning of the then current
Fiscal Year, projections of Obligors’ consolidated balance sheets, results of
operations, cash flow and Availability for the current Fiscal Year and the next
two Fiscal Years, year by year, and for the current Fiscal Year, month by month;

 

(g)           at Agent’s request, a listing of the Obligors’ consolidated trade
payables, specifying the trade creditor and balance due, and a detailed trade
payable aging;

 

(h)           promptly after the sending or filing thereof, copies of any proxy
statements, financial statements or reports that any Obligor has made generally
available to its shareholders; copies of any regular, periodic and special
reports or registration statements or prospectuses that any Obligor files with
the Securities and Exchange Commission or any other Governmental Authority, or
any securities exchange; and copies of any press releases or other statements
made available by an Obligor to the public concerning material changes to or
developments in the business of such Obligor, if and to the extent such
information is not available on the SEC’s or the Parent’s website;

 

(i)            promptly after the sending or filing thereof, copies of any
annual report to be filed in connection with each Plan or Foreign Plan;

 

(j)            promptly upon the consummation of the transactions relating to
the Convertible Note Debt, Junior Debt or any Refinancing Debt, copies certified
by a Senior Officer as complete and correct (with such certification to be in
such Person’s capacity a Senior Officer of an Obligor and not in such Person’s
individual capacity) of the Convertible Note Debt Documents, the Junior Debt
Documents or the documents relating to such Refinancing Debt, as the case may
be.

 

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(k)                                 promptly (x) upon delivery thereof, copies
of all documents and materials of a material financial nature provided to any
other creditor of any Obligor or any Subsidiary and (y) upon receipt thereof,
copies of all material notices or information or material non-ordinary course
correspondence received from, or on behalf of, any other creditor of any Obligor
or any Subsidiary (including, without limitation, any default or similar
notices);

 

(l)                                     promptly upon request therefor, all
information pertaining to the Obligors and their Subsidiaries reasonably
requested by any Lender in order for such Lender to comply with the provisions
of the Patriot Act; and

 

(m)                             such other reports and information (financial or
otherwise) as Agent may reasonably request from time to time in connection with
any Collateral or any Obligor’s or Subsidiary’s financial condition or business;

 

(n)                                 on or after January 29, 2017, not later than
the twelfth (12th) Business Day after the end of any fiscal month in which an
FCCR Reporting Monitoring Event has occurred, a certificate executed by a Senior
Officer of Borrower Agent (with such certification to be in such Person’s
capacity as a Senior Officer of Borrower Agent and not in such Person’s
individual capacity) setting forth reasonably detailed calculations with respect
to the Consolidated Fixed Charge Coverage Ratio for the most recent period of
twelve consecutive fiscal months for which financial statements have been
delivered pursuant to Section 10.1.2(c) ending on or prior to such date; and

 

(o)                                 to the extent the Borrower Agent has not
delivered a certificate complying with the following requirements within the 31
days immediately prior to such date, on any other date on or after January 29,
2017 on which (i) the Borrower Agent has requested a Loan or the issuance,
extension or renewal of any Letter of Credit and (ii) an FCCR Trigger Event has
occurred, a certificate executed by a Senior Officer of Borrower Agent (with
such certification to be in such Person’s capacity as a Senior Officer of
Borrower Agent and not in such Person’s individual capacity) setting forth
reasonably detailed calculations with respect to the Consolidated Fixed Charge
Coverage Ratio for the most recent period of twelve consecutive fiscal months
for which financial statements have been delivered pursuant to
Section 10.1.2(c) ending on or prior to such date.

 

Documents required to be delivered pursuant to Section 10.1.2(a) or
Section 10.1.2(b) (to the extent any such documents are included in materials
otherwise filed with the Securities and Exchange Commission) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the applicable Borrower posts such documents, or provides
a link thereto on such Borrowers’ website on the internet at the website address
indicated in writing to Agent and Lenders by the Borrower Agent; or (ii) on
which such documents are posted on the Borrowers’ behalf on an internet or
intranet website, if any, to which each Lender and Agent have access (whether a
commercial, third-party website or whether sponsored by Agent); provided that:
(i) such Borrower shall deliver paper copies of such documents to Agent or any
Lender that requests such Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by Agent or such Lender and
(ii) such Borrower shall notify Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to Agent by
electronic mail electronic versions (i.e., soft copies) of such documents. 
Notwithstanding anything contained herein, in every instance the Borrowers shall
be required to provide paper copies of the Compliance Certificates to Agent and
the Lenders.  Except for such Compliance Certificates, Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Borrowers with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

 

The Obligors hereby acknowledge that (a) Agent and/or MLPFS will make available
to the Lenders and the Issuing Bank materials and/or information provided by or
on behalf of the Obligors hereunder

 

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(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (b) certain
of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Obligors or their
securities) (each, a “Public Lender”).  The Obligors hereby agree that (w) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC,” the Obligors shall be deemed to have
authorized the Agent, MLPFS, the Issuing Bank and the Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to the Obligors or their securities for purposes of United States
Federal and state securities laws (provided, however, that to the extent such
Borrower Materials constitute Information, they shall be treated as set forth in
Section 14.11); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (z) Agent and MLPFS shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated “Public Investor.”

 

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the
Agent or any of its Related Parties (collectively, the “Agent Parties”) have any
liability to any Borrower, any Lender, the L/C Issuerany Issuing Bank or any
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrowers’ or the
Agent’s transmission of Borrower Materials or notices through the Platform, any
other electronic messaging service, or through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined
by a court of competent jurisdiction by a final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such Agent or
such Related Party; provided, however, that in no event shall the Agent or any
of its Related Parties have any liability to any Borrower, any Lender, the L/C
Issuerany Issuing Bank or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).

 

10.1.3.           Notices.

 

A.                                    Notify Agent and Lenders in writing,
promptly after any Senior Officer of the Parent or the Borrower Agent obtaining
knowledge thereof, of any of the following that affects an Obligor:  (a) the
threat (in writing) or commencement of any proceeding or investigation, whether
or not covered by insurance, reasonably likely to result in a Material Adverse
Effect; (b) any material pending or threatened (in writing) labor dispute,
strike or walkout, or the expiration of any material labor contract; (c) any
material default under or termination of a Material Contract; (d) the occurrence
of any Default or Event of Default; (e) any judgment in an amount exceeding
$5,000,000; (f) the assertion of any Intellectual Property Claim reasonably
likely to result in a Material Adverse Effect; (g) any violation or asserted
violation of any Applicable Law (including ERISA, OSHA, FLSA, or any
Environmental Laws) reasonably likely to result in a Material Adverse Effect;
(h) any material Environmental Release by an Obligor or on any Property owned,
leased or occupied by an Obligor; or receipt of any material Environmental
Notice; (i) the discharge of or any withdrawal or resignation by Obligors’
independent accountants; (j) any opening of a new office, place of business or
Distribution Center where Collateral with a fair market value of $2,000,000 or
more will be located, at least 30 days prior to such opening, (k) any “default”
or “event of default” under any Junior Debt Documents, Mortgage Loan Debt
Documents, Senior Note Debt Documents or Convertible Note Debt Documents, as the
case may be,; or (l) as soon as practicable, in any event prior thereto, any
waiver, consent, amendment or permanent prepayment or permanent commitment
reduction (and the

 

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amount thereof) pursuant to the Junior Debt Documents, Mortgage Loan Debt
Documents, Senior Note Debt Documents or Convertible Note Debt Documents, as the
case may be.

 

B.                                    Notice Regarding Environmental Matters —
(a)  The Obligor shall provide the Agent written notice of each of the following
promptly after any Responsible Officer of any Obligor knows or has reason to
know of it (and, upon reasonable request of the Agent, documents and information
in connection therewith): (i)(A) unpermitted Environmental Releases, (B) the
receipt by any Obligor of any notice of violation of or potential liability or
similar notice under, or the existence of any condition that could reasonably be
expected to result in violations of or liabilities under, any Environmental Law
or (C) the commencement of, or any material change to, any action,
investigation, suit, proceeding, audit, claim, demand, dispute alleging a
violation of or liability under any Environmental Law, that, for each of clauses
(A), (B) and (C) above (and, in the case of clause (C), if adversely
determined), in the aggregate for each such clause, could reasonably be expected
to result in Environmental Liabilities in excess of $1,000,000, (ii) the receipt
by any Obligor of notification that any property of any Obligor is subject to
any Lien in favor of any Governmental Authority securing, in whole or in part,
Environmental Liabilities and (iii) any proposed acquisition or lease of real
property (except as part of any Permitted Acquisition) if such acquisition or
lease would have a reasonable likelihood of resulting in aggregate Environmental
Liabilities in excess of $1,000,000.

 

(b)  Upon reasonable request of the Agent, the Obligors shall provide the Agent
a report containing an update as to the status of any environmental, health or
safety compliance, hazard or liability issue identified in any document
delivered to any Secured Party pursuant to any Loan Document or as to any
condition reasonably believed by the Administrative Agent to result in material
Environmental Liabilities.

 

10.1.4.           Storage Agreements.  Upon request, provide Agent with copies
of all existing agreements, and promptly after execution thereof provide Agent
upon request with copies of all future agreements, between an Obligor and any
warehouseman, processor, shipper, bailee, customs broker or other Person (other
than Store landlords) that owns any premises at which any Collateral having an
aggregate value of more than $500,000 may be kept or that otherwise may possess
or handle any Collateral.

 

10.1.5.           Compliance with Laws; Organic Documents; Material Contracts. 
Comply (a) with all Applicable Laws, including ERISA, Environmental Laws, FLSA,
OSHA, Anti-Terrorism Laws, and laws regarding collection and payment of Taxes,
and maintain all Governmental Approvals necessary to the ownership of its
Properties or conduct of its business, unless failure to so comply or maintain
such Governmental Approvals could not reasonably be expected to have a Material
Adverse Effect, (b) with all Organic Documents unless failure to comply
therewith could not (x) be reasonably expected to have a Material Adverse Effect
and (y) be reasonably expected to have a materially adverse effect on the Agent
or any Lender and (c) with all of its Material Contracts except in each case
where the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.  Without limiting the generality of the foregoing, if
any material Environmental Release occurs at or on any Properties of any Obligor
or Subsidiary, it shall act promptly and diligently to investigate and report to
Agent and all appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release, whether or
not directed to do so by any Governmental Authority.

 

10.1.6.           Taxes.  Pay and discharge all material Taxes prior to the date
on which they become delinquent or penalties attach, unless such Taxes are being
Properly Contested.

 

10.1.7.           Insurance.  In addition to the insurance required hereunder
with respect to Collateral, maintain insurance with insurers reasonably
satisfactory to Agent, with respect to the Properties, business and business
interruption of Obligors and Subsidiaries of such type (including product
liability, workers’ compensation, larceny, embezzlement, or other criminal
misappropriation insurance), in each

 

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case, in such amounts, and with such coverages and deductibles as are customary
for companies similarly situated.

 

10.1.8.           Licenses.  Keep each License affecting any Collateral
(including the manufacture, distribution or disposition of Inventory) or any
other material Property of Obligors and Subsidiaries in full force and effect,
if the failure to maintain such License could reasonably be expected to result
in a Material Adverse Effect.

 

10.1.9.           Future Subsidiaries; Designation of Subsidiaries.  Promptly
notify Agent upon any Person becoming a Subsidiary and on the date such Person
becomes a Subsidiary, unless such Person is a Foreign Subsidiary, SPE or Passive
Company, cause it to either (i) guaranty the Obligations by executing a Guaranty
in favor of the Agent or (ii) become a Borrower by executing a joinder agreement
substantially in the form of Exhibit H, and, in each case, to execute and
deliver such documents, instruments and agreements and to take such other
actions as Agent shall reasonably require to evidence and perfect a first
priority (subject to Permitted Liens entitled to priority under Applicable Law)
Lien in favor of Agent (for the benefit of Secured Parties) on all assets of
such Person constituting Collateral (provided that perfection of any such Lien
shall be required to the same extent required by this Loan Agreement on the
Closing Date), including, if reasonably requested by the Agent, delivery of such
legal opinions, in form and substance reasonably satisfactory to Agent, as it
shall deem appropriate.  The Borrower Agent may at any time designate any
Guarantor as a Borrower; provided that any such Guarantor shall execute a
joinder agreement substantially in the form of Exhibit H.  The Borrower Agent
may at any time designate any Borrower as a Guarantor; provided, that any such
Borrower shall execute a Guaranty in favor of the Agent.  Notwithstanding
anything to the contrary in the foregoing two sentences, in no event shall any
assets of a Person that is designated a Borrower pursuant to this Section 10.1.9
be deemed eligible for inclusion in the Tranche A Borrowing Base or the Tranche
A-1 Borrowing Base unless and until the Agent has completed (at the expense of
the Borrowers) collateral audits, examinations, appraisals and environmental
assessments of such assets, which collateral audits, examinations, appraisals
and environmental assessments shall be conducted in a manner reasonably
acceptable to the Agent and the Co-Collateral Agents; provided, however, that
any such collateral audits, examinations, appraisals and environmental
assessments shall not be subject to (and shall not be included in) the
limitations set forth in Section 10.1.1 on the number of collateral audits,
examinations, appraisals and environmental assessments for which the Agent is
entitled to be reimbursed in any period.

 

10.1.10.     Lien Waivers.  Use commercially reasonable efforts to deliver Lien
Waivers for each of the Obligor’s leased locations that constitutes a Large
Inventory Location and for each of the Obligor’s leased locations in a Landlord
Lien State.

 

10.1.11.    Preservation of Existence.  Preserve, renew and maintain in full
force and effect its legal existence and good standing under the laws of the
jurisdiction of its organization except in a transaction permitted by
Section 10.2.6 or Section 10.2.9.

 

10.1.12.    Maintenance of Properties.  Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in working order and condition, ordinary wear and tear excepted and make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

10.1.13.    Books and Records.  Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all material financial transactions involving the
assets and business of such Obligors or such Subsidiary, as the case may be.

 

10.1.14.    Operation and Maintenance Plan.  If recommended by any environmental
report furnished to the Agent and if required by applicable Environmental Law
with respect to any individual parcel of Real Estate, the Obligors shall
establish and comply with an operations and maintenance program

 

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with respect to such individual parcel of Real Estate, in form and substance
reasonably acceptable to Agent, prepared by an environmental consultant
reasonably acceptable to Agent.  Without limiting the generality of the
preceding sentence, Agent may require (a) periodic notices or reports regarding
matters addressed by the operation and maintenance program to Agent in form,
substance and at such intervals as Agent may reasonably require, (b) and
amendment to such operations and maintenance program reasonably required to
address changing circumstances or applicable laws, (c) access to such parcel of
Real Estate, subject to Section 10.1.1, to review and assess the environmental
condition of such parcel and Obligors’ compliance with such operations and
maintenance program, and (d) variation of the operations and maintenance program
reasonably required in response to the reports provided by any such consultants,
as required by applicable Environmental Law.

 

10.1.15.    Anti-Corruption Laws.  Conduct its businesses in compliance with the
United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010,
and other similar anti-corruption legislation in other jurisdictions, and
maintain policies and procedures designed to promote and achieve compliance with
such laws.

 

10.2.                     Negative Covenants.  For so long as any Commitments or
Obligations are outstanding, each Obligor shall not, and shall cause each
Subsidiary not to:

 

10.2.1.           Permitted Debt.  Create, incur, guarantee or suffer to exist
any Debt, except:

 

(a)                                 the Obligations;

 

(b)                                 the Mortgage Loan Debt;[reserved];

 

(c)                                  the Senior Note Debt;

 

(d)                                 Permitted Purchase Money Debt;

 

(e)                                  Borrowed Money (other than the Obligations,
Mortgage Loan Debt, the Senior Note Debt and Permitted Purchase Money Debt), but
only to the extent outstanding on the Closing Date, not satisfied with proceeds
of the initial Loans and set forth on Schedule 10.2.1;

 

(f)                                   Bank Product Debt; provided that with
respect to such Bank Product Debt in respect of Hedging Agreements, such Obligor
is otherwise permitted to enter into such Hedging Agreement pursuant to
Section 10.2.15;

 

(g)                                  Permitted Contingent Obligations;

 

(h)                                 Refinancing Debt as long as each Refinancing
Condition is satisfied;

 

(i)                                     Debt that is not included in any of the
preceding clauses of this Section 10.2.1, is not secured by a Lien and the
principal amount thereof does not exceed, in the aggregate at any time
(x) $10,000,000 minus (y) the then outstanding principal amount of Permitted
Purchase Money Debt in excess of $25,000,000;

 

(j)                                    the guarantee by any Obligor of Debt of
another Obligor so long as such Debt was otherwise permitted to be incurred
under this Section 10.2.1;

 

(k)                                 Debt of any Obligor secured by Junior Liens
in an aggregate principal amount not to exceed $100,000,000 at any time
outstanding; provided that (i) the final maturity of such Debt shall not occur
prior to the 60th day following the Termination Date, (ii) there shall be no
scheduled amortization or mandatory prepayments or mandatory repayments of such
Debt prior to the 60th day following the

 

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Termination Date, (iii) 100% of the net proceeds from the issuance of such Debt
is applied to the repayment of the outstanding Loans (it being understood that
the Commitments shall not be reduced and the net proceeds shall not be required
to Cash Collateralize outstanding LC Obligations), (iv) both before and after
giving effect to the Junior Debt Documents, no Default or Event of Default shall
exist, (v) the obligors on such debt shall be Obligors hereunder, (vii) the
holders of such Junior Debt (or a representative thereof) shall have entered
into an intercreditor agreement with the Agent, which intercreditor agreement
shall be in form and substance reasonably satisfactory to the Agent and the
Co-Collateral Agents and (vi) prior to the consummation of any Junior Debt
transaction, Agent shall have received an officer’s certificate of the Borrower
Agent (in form and substance reasonably satisfactory to Agent) from a Senior
Officer of the Borrower Agent certifying that the conditions set forth in this
clause (k) are satisfied;

 

(l)                                     the incurrence by any Obligor of Debt
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or guarantees or letters of credit, surety bonds
or performance bonds securing any obligations of any other Obligor pursuant to
such agreements, in any case incurred in connection with the disposition of any
business, assets or capital stockCapital Stock of any Obligor (other than
guarantees of Debt incurred by any Person acquiring all or any portion of such
business, assets or capital stockCapital Stock of such Obligor for the purpose
of financing such acquisition), so long as the principal amount does not exceed
the gross proceeds actually received by any Obligor in connection with such
disposition;

 

(m)                             the incurrence by any Obligor of Debt arising
from the honoring by a bank or other financial institution of a check, draft or
similar instrument drawn against insufficient funds in the ordinary course of
business, provided, however, that such Debt is extinguished within five Business
Days of its Incurrence;

 

(n)                                 Debt in respect of loans permitted to be
made pursuant to Section 10.2.7;

 

(o)                                 an unsecured guarantee by any Obligor of the
obligations of any other Obligor, as tenant, under any Master Lease Agreement;

 

(p)                                 Convertible Note Debt in an aggregate
principal amount not to exceed $100,000,000; provided that (i) the final
maturity of such Debt shall not occur prior to the 91st day following the
Termination Date, (ii) there shall be no scheduled amortization or mandatory
prepayments or mandatory repayments of such Debt prior to the 91st day following
the Termination Date, (iii) 100% of the net proceeds from the issuance of such
Debt is applied to the repayment of the outstanding Loans (it being understood
that the Commitments shall not be reduced and the net proceeds shall not be
required to Cash Collateralize outstanding LC Obligations), (iv) both before and
after giving effect to the Convertible Debt Documents, no Default or Event of
Default shall exist and (v) prior to the consummation of any Convertible Note
Debt transaction, Agent shall have received an officer’s certificate of the
Borrower Agent (in form and substance reasonably satisfactory to Agent) from a
Senior Officer of the Borrower Agent certifying that the conditions set forth in
this clause (p) are satisfied;

 

(q)                                 unsecured Debt owed to sellers constituting
consideration for Permitted Acquisitions on terms and conditions reasonably
acceptable to Agent;

 

(r)                                    unsecured Debt consisting of earn-out
obligations in connection with any Permitted Acquisition;

 

(s)                                   Debt of a Person or Debt attaching to
assets of a Person that, in either case, becomes a Subsidiary of a Borroweran
Obligor after the date hereof as the result of a Permitted Acquisition, provided
that such Debt existed at the time such Person became a Subsidiary or at the
time such assets were acquired and, in each case, was not created in
anticipation thereof;

 

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(t)                                    Debt in respect of deferred compensation
incurred in the ordinary course of business;

 

(u)                                 Debt incurred in connection with any sale or
disposition of any property in connection with any transaction covered by, but
not prohibited by, Section 10.2.23; and

 

(v)                                 Debt owing to any insurance company in
connection with the financing of any insurance premiums permitted by such
insurance company in the ordinary course of business.

 

10.2.2.           Permitted Liens.  Create or suffer to exist any Lien upon any
of its Property, except the following (collectively, “Permitted Liens”):

 

(a)                                 Liens in favor of Agent;

 

(b)                                 Purchase Money Liens securing Permitted
Purchase Money Debt (provided that such Liens shall not, for the avoidance of
doubt, secure the Debt permitted pursuant to Section 10.2.1(p));

 

(c)                                  (i) Liens for Taxes not yet due or being
Properly Contested, (ii) Liens for Taxes that are set forth in Schedule
10.2.2(c); provided that such Taxes (and the Liens in respect thereof) are
satisfied or are being Properly Contested not later than the date that is 90
days after the Closing Date and (iii) other Liens for Taxes in an aggregate
amount not to exceed $500,000; provided that such Taxes (and the Liens in
respect thereof) are satisfied or are being Properly Contested not later than
the date that is 90 days after a Senior Officer of a Borrower becomes aware of
such Liens;

 

(d)                                 statutory Liens (other than Liens for Taxes
or imposed under ERISA) arising in the Ordinary Course of Business, but only if
(i) payment of the obligations secured thereby is not yet due or is being
Properly Contested, and (ii) such Liens do not materially impair the value or
use of the Property or materially impair operation of the business of any
Obligor or Subsidiary;

 

(e)                                  Liens incurred or deposits made in the
Ordinary Course of Business to secure the performance of tenders, bids, leases,
contracts (except those relating to Borrowed Money), statutory obligations and
other similar obligations, or arising as a result of progress payments under
government contracts, as long as such Liens are at all times junior to Agent’s
Liens;

 

(f)                                   Liens arising by virtue of a judgment or
judicial order against any Obligor or Subsidiary, or any Property of an Obligor
or Subsidiary, in each case not giving rise to an Event of Default;

 

(g)                                  easements, rights-of-way, restrictions,
covenants or other agreements of record, and other similar charges or
encumbrances on Real Estate, that do not secure any monetary obligation and do
not interfere with the Ordinary Course of Business;

 

(h)                                 normal and customary rights of setoff upon
deposits in favor of depository institutions, and Liens of a collecting bank on
Payment Items in the course of collection;

 

(i)                                     (x) Junior Liens securing Junior Debt
permitted by Section 10.2.1(k) and (y) Liens on the assets of any SPE who is not
an Obligor securing the Mortgage Loan Debt and the Refinancing Debt of Mortgage
Loan Debt;

 

(j)                                    Liens on property of a Person existing at
the time such Person is merged with or into or consolidated with any Obligor;
provided that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with such Obligor;

 

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(k)                                 Liens on property existing at the time of
acquisition thereof by any Obligor, provided that such Liens were in existence
prior to the contemplation of such acquisition and do not extend to (i) any
Accounts or Inventory or (ii) any property other than the property so acquired
by such Obligor;

 

(l)                                     Liens incurred or deposits made in the
ordinary course of business in connection with worker’s compensation,
unemployment insurance or other social security obligations;

 

(m)                             Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
Debt), leases, or other similar obligations arising in the ordinary course of
business;

 

(n)                                 survey exceptions, encumbrances, easements
or reservations of, or rights of others for, rights of way, zoning or other
restrictions as to the use of properties, and defects in title which, in the
case of any of the foregoing, were not incurred or created to secure the payment
of Debt, and which in the aggregate do no materially adversely affect the value
of such properties or materially impair the use for the purposes of which such
properties are held by any Obligor;

 

(o)                                 judgment and attachment Liens not giving
rise to an Event of Default and notices of lis pendens and associated rights
related to litigation being contested in good faith by appropriate proceedings
and for which adequate reserves have been made;

 

(p)                                 Liens, deposits or pledges to secure public
or statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds or obligations; and Liens, deposits or pledges in lieu of such
bonds or obligations, or to secure such bonds or obligations, or to secure
letters of credit in lieu of or supporting the payment of such bonds or
obligations;

 

(q)                                 any interest or title of a lessor, licensor
or sublicensor in the property subject to any lease, license or sublicense,
including any interest of a Licensor in any License;

 

(r)                                    Liens arising from UCC financing
statements regarding operating leases or consignments;

 

(s)                                   Liens securing Refinancing Debt of the
Senior Note Debt; provided that any such Liens are (i) limited to the collateral
securing the Obligations and do not extend to any other assets of the Parent and
its Subsidiaries and (ii) expressly subordinated to the Liens securing the
Obligations and subject to an intercreditor agreement, in form and substance and
on terms and conditions, reasonably acceptable to Agent and the Co-Collateral
Agents, and such intercreditor agreement is in full force and effect;

 

(t)                                    Liens for assessments and governmental
charges not yet delinquent or being contested in good faith and for which
adequate reserves have been established to the extent required by GAAP;

 

(u)                                 carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or are being Properly Contested;

 

(v)                                 deposits in the ordinary course of business
to secure liability to insurance carriers;

 

(w)                               Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods in the ordinary course of business;

 

(x)                                 Liens (i) of a collection bank arising under
Section 4-210 of the Uniform Commercial Code on items in the course of
collection, (ii) attaching to commodity trading accounts or other

 

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commodity brokerage amounts incurred in the ordinary course of business and
(iii) in favor of banking institutions arising as a matter of law encumbering
deposits (including the right of set-off) and which are within the general
parameters customary in the banking industry;

 

(y)                                 existing Liens shown on Schedule 10.2.2 and
Liens securing Refinancing Debt in respect thereof; and

 

(z)                                  the licensing of Intellectual Property to
third Persons on reasonable and customary terms in the ordinary course of
business consistent with past practice; provided that such licensing does not
(i) materially interfere with the business of the Parent or any other Obligor or
(ii) interfere with the Agent’s liens or security interests or the Agent’s right
to dispose of any Collateral subject to such Intellectual Property.

 

10.2.3.           Cash Accumulation.  Permit, for a period exceeding five
(5) consecutive Business Days, cash or Cash Equivalents in an aggregate amount
in excess of $100,000,000 (other than (a) cash and Cash Equivalents reasonably
necessary for the Obligors and their Subsidiaries to satisfy the current
liabilities incurred by them in the ordinary course of their business and
without acceleration of the satisfaction of such current liabilities and (b) so
long as no Trigger Event Period exists, proceeds from the issuance of Equity
InterestsCapital Stock of the Obligors for a period of 180 days after the
receipt by the Obligors thereof) to accumulate and be maintained in the Deposit
Accounts and investment accounts of the Obligors; provided, however, that the
Obligors’ obligations under this Section 10.2.3 shall be suspended if and for so
long as there are no Loans outstanding.

 

10.2.4.           Distributions; Upstream Payments.  Declare or make any
Distributions, except (i) Upstream Payments or (ii) Permitted Distributions; or
create or suffer to exist any encumbrance or restriction on the ability of a
Subsidiary to make any Upstream Payment, except for restrictions (a) under the
Loan Documents, (b) under Applicable Law, (c) in effect on the Closing Date as
shown on Schedule 9.1.16, and (d) as set forth in documents evidencing
Refinancing Debt with respect to the documents described on Schedule 9.1.16.

 

10.2.5.           Restricted Investments.  Make any Restricted Investment.

 

10.2.6.           Disposition of Assets.  Make any Asset Disposition (other than
any Asset Disposition by any SPE or Passive Company), except a Permitted Asset
Disposition, a disposition of Equipment under Section 8.4.2, or a transfer of
Property by any Obligor to another Obligor.

 

10.2.7.           Loans.  Make any loans or other extensions of credit to any
Person, except (a) advances to an officer or employee of any Obligor for salary,
travel expenses, relocation expenses, commissions and similar items in the
Ordinary Course of Business; (b) prepaid expenses and extensions of trade credit
made in the Ordinary Course of Business; (c) deposits with financial
institutions permitted hereunder; (d) loans or other extensions of credit from
Obligor to Obligor so long as (x) each Borrower is Solvent and (y) Parent and
its Subsidiaries, on a consolidated basis, are Solvent, in each case, at the
time of any such loan or extension of credit; (e) loans or other extensions of
credit by any Obligor to any Subsidiary that is not an Obligor in an amount not
to exceed $1,000,000 at any time outstanding; and (f) loans or other extensions
of credit by any Subsidiary that is not an Obligor to any Obligor.

 

10.2.8.           Restrictions on Payment of Certain Debt.  Make any payments
(whether voluntary or mandatory, or a prepayment, redemption, retirement,
defeasance or acquisition) with respect to the Senior Note Debt, the Mortgage
LoanConvertible Note Debt, any Junior Debt, the Convertible Note Debt and
Refinancing Debt of any of the Senior Note Debt, the Mortgage Loan Debt, the
Convertible Note Debt andor any Junior Debt other than (a) payments of interest,
fees and expenses due in the ordinary course, (b) regularly scheduled principal
payments with respect to the Mortgage Loan Debt and Refinancing Debt of the
Mortgage Loan Debt[reserved], (c) payments (whether voluntary or mandatory, or a
prepayment,

 

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redemption, retirement, defeasance or acquisition) of the Senior Note Debt, any
Junior Debt, the Mortgage Loan Debt and the Convertible Note Debt, or any Junior
Debt and derived solely from Refinancing Debt which meets the Refinancing
Condition, (d) prepayments of any Junior Debt with the proceeds of Asset
Dispositions, insurance proceeds and condemnation awards solely to the extent
(i) the Net Proceeds, insurance proceeds or condemnation awards, as applicable,
were required to be applied to the Obligations pursuant to Section 5.2 hereof
and (ii) the Required Lenders (or other parties authorized hereunder, as
applicable) and each of the Co-Collateral Agents have waived, forgiven or
postponed for more than ten (10) Business Days (by way of amendment, consent or
otherwise) such requirement, and (e) other payments (whether voluntary or
mandatory, or a prepayment, redemption, retirement, defeasance or acquisition)
of Senior Note Debt, Mortgage Loan Debt, Junior Debt, Convertible Note Debt and
Refinancing Debt of the Senior Note Debt, any Junior Debt, and the Convertible
Note Debt and the Mortgage Loan Debt, so long as (i) no Default or Event of
Default shall have occurred and be continuing or would result after giving
effect to any such payment, (ii) Excess Availability on the date of the making
of such payment on a pro forma basis after giving effect to such payment, and
projected Excess Availability on a pro forma basis for the upcoming six month
period (after giving effect to such payment), measured as of the last day of
each fiscal month during such six month period, is, in each case, greater than
or equal to 15% of the lesser of (x) the aggregate Commitments as of the date of
such payment and last day of each fiscal month during such six month period and
(y) the Aggregate Borrowing Base as of the date of such payment and the last day
of each fiscal month during such six month period, (iii) as of the monthly
fiscal period most recently then ended, the Consolidated Fixed Charge Coverage
Ratio (on a pro forma trailing 12 fiscal month basis, giving effect to the
making of such payment, and any Borrowings made in connection therewith,
determined as though such payment and such Borrowings occurred on the first day
of the twelve fiscal month period ended prior to such payment) is greater than
or equal to 1.00 to 1.00; provided that this clause (iii) shall not be
applicable in the event that Excess Availability on the date of the making of
such payment on a pro forma basis after giving effect to such payment, and
projected Excess Availability on a pro forma basis for the upcoming six month
period (after giving effect to such payment), measured as of the last day of
each fiscal month during such six month period, is, in each case, greater than
or equal to 30% of the lesser of (x) the aggregate Commitments as of the date of
such payment and last day of each fiscal month during such six month period and
(y) the Aggregate Borrowing Base as of the date of such payment and the last day
of each fiscal month during such six month period and (iv) the Borrowers shall
have provided the Agent with a certificate not less than then (10) days prior to
the making of such payment executed by a Senior Officer of the Borrower Agent,
evidencing compliance, on a pro forma basis, after giving effect to such
payment, with the requirements set forth in clauses (e)(ii) and
(e)(iii) above).  Notwithstanding this Section 10.2.8 or anything to the
contrary contained herein or in any other Loan Document, the Obligors shall be
permitted to repay, redeem, retire, defease or otherwise refinance all or any
portion of Bon-Ton’s existing Senior Note Debt consisting of 10.625% senior
notes due in 2017 at any time on or prior to January 28, 2017 so long as, at the
time of any such prepayment and after giving pro forma effect thereto, no
Default or Event of Default shall have occurred and be continuing and Excess
Availability is greater than or equal to 30% of the lesser of: (x) the aggregate
Commitments at such time and (y) the Aggregate Borrowing Base at such time.

 

10.2.9.           Fundamental Changes.  (a)  Merge, combine or consolidate with
any Person, or liquidate, wind up its affairs or dissolve itself, in each case
whether in a single transaction or in a series of related transactions, except
(i) for mergers or consolidations of (x) an Obligor with another Obligor or
(y) a Subsidiary that is not an Obligor with (A) any other Subsidiary that is
not an Obligor or (B) any Obligor so long as such Obligor is the continuing or
surviving entity or, if such Obligor is not the continuing or surviving entity,
the continuing or surviving entity becomes an Obligor (prior to or concurrently
with the consummation of such merger or consolidation), (ii) for liquidation or
dissolution of any Subsidiary of the Parent, so as long as (x) the net assets of
such Subsidiary remaining after payments to creditors are distributed to an
Obligor and (y) in any event, 100% of the Capital Stock or other equity
securities held by such dissolving Subsidiary are transferred to an Obligor,
(iii) for liquidation or dissolution of any Obligor not permitted pursuant to
clause (ii) above (other than a liquidation or dissolution of the Parent) on
terms and conditions acceptable to Agent or (iv) to affect the transactions
otherwise permitted pursuant to Section

 

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10.2.5; or (b) without fifteen (15) days prior written notice to the Agent,
change its name or conduct business under any fictitious name, change its tax,
charter or other organizational identification number, or change its form or
state of organization.

 

10.2.10.    Subsidiaries.  Form or acquire any Subsidiary after the Closing
Date, except in accordance with Sections 10.1.9 and 10.2.5; or permit any
existing Subsidiary to issue any additional Equity InterestsCapital Stock except
(a) director’s qualifying shares and (b) Equity InterestsCapital Stock issued to
an Obligor.

 

10.2.11.    Organic Documents.  Amend, modify or otherwise change, in a manner
which would be materially adverse to any Lender, any of its Organic Documents as
in effect on the Closing Date.

 

10.2.12.    Tax Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Obligors and
Subsidiaries.

 

10.2.13.    Accounting Changes.  Make any material change in accounting
treatment or reporting practices, except as required by GAAP and in accordance
with Section 1.2; or change its Fiscal Year.

 

10.2.14.    Restrictive Agreements.  Other than any conditions or restrictions
in respect of Distributions by the Parent, become a party to any Restrictive
Agreement, except (a) a Restrictive Agreement as in effect on the Closing Date
and shown on Schedule 9.1.16; (b) a Restrictive Agreement relating to secured
Debt permitted hereunder, if such restrictions apply only to the collateral for
such Debt; (c) customary provisions in leases and other contracts restricting
assignment thereof; (d) Restrictive Agreements contained in documents evidencing
Refinancing Debt of (A) the Senior Note Debt and (B) the Mortgage Loan Debt;
(e) Restrictive Agreements contained in documents evidencing any Junior Debt so
long as (i) such documents do not restrict or limit (A) the incurrence of
indebtedness under this Loan Agreement (except as may be provided in the Junior
Debt Intercreditor Agreement), (B) the making of payments on account of the
Obligations, (C) the granting of liens to the Agent to secure the Obligations,
or (D) the modification, renewal or extension of this Loan Agreement (except as
may be provided in the Junior Debt Intercreditor Agreement) and (ii) a Senior
Officer of the Borrower Agent has delivered a certificate to the Agent stating
that the Borrower Agent has determined in good faith that such restrictions
taken as a whole are consistent with market terms of agreements governing
comparable Debt of similar companies at the time of incurrence of any Junior
Debt under such Junior Debt Documents; (f) Restrictive Agreements contained in
documents evidencing the Convertible Note Debt or Refinancing Debt of the
Convertible Note Debt; and (g) customary restrictions entered into in the
ordinary course of business in asset sale agreements, sale-leaseback agreements,
stock sale agreements and other similar agreements limiting the transfer of the
assets subject thereto pending the consummation of the sale provided therein.

 

10.2.15.    Hedging Agreements.  Enter into any Hedging Agreement, except to
hedge risks arising in the Ordinary Course of Business and not for speculative
purposes.

 

10.2.16.    Conduct of Business.  Engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Obligors taken
as a whole.

 

10.2.17.    Affiliate Transactions.  Enter into or be party to any transaction
with an Affiliate, except (a) transactions contemplated by the Loan Documents;
(b) payment of reasonable compensation to officers and employees for services
actually rendered, and loans and advances permitted by Section 10.2.7;
(c) payment of customary directors’ fees and indemnities; (d) transactions
solely among Obligors; (e) transactions with Affiliates that were entered into
prior to the Closing Date, as shown on Schedule 10.2.17 or as thereafter amended
or replaced in any manner, that, taken as a whole, is not more adverse to the
interests of the Lenders in any material respect than such transaction or
agreement evidencing such transaction as in effect on the date hereof;
(f) transactions contemplated by the Mortgage Loan Debt

 

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Documents and (gand (f) transactions with Affiliates in the Ordinary Course of
Business, upon fair and reasonable terms fully disclosed to Agent and no less
favorable than would be obtained in a comparable arm’s-length transaction with a
non-Affiliate.

 

10.2.18.    Plans.  Become a party or contribute (or have an obligation to
contribute) to any (a) Multiemployer Plan or (b) Foreign Plan.

 

10.2.19.    Amendments to Certain Material Contracts.  Except in connection with
any Refinancing Debt permitted hereunder, change, waive or amend any agreement
or arrangement to which Parent or a Subsidiary is party that relates to any
Mortgage Loan Debt Document, the Convertible Note Debt Document, any Junior Debt
Document or any Senior Note Debt Document if such change, waiver or amendment
(i) increases the principal balance of such Debt, or increases any required
payment of principal or interest; (ii) accelerates the date on which any
installment of principal or any interest is due, or adds any additional
redemption, put or prepayment provisions; (iii) shortens the final maturity date
or otherwise accelerates amortization; (iv) increases the interest rate;
(v) increases or adds any fees or charges; (vi) modifies any covenant in a
manner or adds any representation, covenant or default that is more onerous or
restrictive in any material respect for any Obligor or Subsidiary, or that is
otherwise materially adverse to any Obligor, any Subsidiary or Lenders; or
(vii) could reasonably be considered to be materially adverse to the Lenders.

 

10.2.20.    No Speculative Transactions.  Engage in any transaction involving
commodity options, futures contracts or similar transactions, except solely to
hedge against fluctuations in the prices of commodities owned or purchased by it
and the values of foreign currencies receivable or payable by it and interest
swaps, caps or collars.

 

10.2.21.    Passive Company Status.  Where such Obligor or such Subsidiary is a
Passive Company, engage in any trade or business or incur any Debt or guaranteed
Debt except for the trade or business in which it is engaged on the Closing
Date.  [Reserved].

 

10.2.22.    General Partner.  Be or become the general partner of any
partnership other than (a) a Passive Company and (b) any Subsidiary with nominal
assets; provided that notwithstanding anything to the contrary contained herein,
at no time may any assets (other than assets with a fair market value of a
nominal amount) of any Obligor be transferred to any such Subsidiary described
in this clause (b).

 

10.2.23.    Sale-Leaseback Transactions.  Engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets other than
such transactions involving assets of the Obligors with a fair market value of
not more than $150,000,000 in the aggregate; provided that (a) the terms and
conditions of any such transaction shall be reasonably acceptable to Agent;
(b) the Net Proceeds received from such sale are not less than 70% of the most
recent appraised value of such assets; and (c) simultaneously with the
consummation of any such transaction the Obligors shall (i) deliver to Agent a
Lien Waiver in form and substance satisfactory to Agent (or Agent shall take an
appropriate Rent and Charges Reserve), (ii) adjust the Tranche A Borrowing Base
and the Tranche A-1 Borrowing Base to reflect the sale of Eligible Real Estate
included therein, if any, and (iii) apply proceeds from such transaction to the
prepayment of the Loans to the extent required by Section 5.2.

 

10.2.24.    Debt under Senior Note Debt Documents.  Incur any Indebtedness (as
defined in the Senior Note Indenture), other than (i) the Obligations, (ii) the
Mortgage Loan Debt and any Refinancing Debt of the Mortgage Loan Debt, (iii) any
Junior Debt and (iviii) theany Convertible Note Debt, that at the time of the
incurrence thereof, or at any time thereafter, is Indebtedness (as defined in
the Senior Note Indenture) permitted to be incurred under the Senior Note
Indenture as a result of such Indebtedness (as defined in the Senior Note
Indenture) being permitted under Section 4.09(b)(1) of the Senior Note
Indenture.

 

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10.2.25.    Use of Proceeds.  The proceeds of Loans or Letters of Credit shall
not be used by Borrowers, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry Margin Stock or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

 

10.2.26.    No Inconsistent Agreements.  Enter into any contractual obligation
or enter into any amendment or other modification to any currently existing
contractual obligation, which by its terms restricts or prohibits the Borrowers
from paying the principal of or interest on the Loans or Cash Collateralizing
the Letters of Credit.

 

10.2.27.    Stay, Extension and Usury Laws.  Insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law wherever enacted (to the extent that it may lawfully
do so), now or at any time hereafter in force, that may affect the covenants or
the performance of its obligations under the Loans, this Loan Agreement or the
other Loan Documents, and each Obligor hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
Lenders, but shall suffer and permit the execution of every such power as though
no such law has been enacted.

 

10.2.28.    Sanctions.  Use the proceeds of any Borrowing, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other individual or entity, to fund any activities of or business
with any individual or entity, or in any Designated Jurisdiction, that, at the
time of such funding, is the subject of Sanctions, or in any other manner that
will result in a violation by any individual or entity (including any individual
or entity participating in the transaction, whether as Lender, Joint Lead
Arranger, Agent, L/C IssuerIssuing Bank, or otherwise) of Sanctions.

 

10.2.29.    Anti-Corruption Laws.  Directly or indirectly use the proceeds of
any Credit Extension for any purpose which would breach the United States
Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other
similar anti-corruption legislation in other jurisdictions.

 

10.3.                     Financial Covenants.

 

10.3.1.           Minimum Excess Availability.  For so long as any Commitments
or Obligations are outstanding, Borrowers shall:10.3.1.  Minimum Excess
Availability.  Maintain maintain Excess Availability at all times in an amount
greater than or equal to the greater of (i) 10% of the lesser of: (x) the
aggregate Commitments at such time and (y) the Aggregate Borrowing Base at such
time and (ii) $50,000,000.75,000,000.

 

10.3.2.           Springing FCCR.  If at any time on or after January 29, 2017
an FCCR Trigger Event has occurred, the Consolidated Fixed Charge Coverage Ratio
shall be at least 1.00 to 1.00, calculated as of the last day of the most recent
period of twelve consecutive fiscal months for which financial statements have
been delivered pursuant to Section 10.1.2(c) ending on or prior to such time.

 

SECTION 11.                  EVENTS OF DEFAULT; REMEDIES ON DEFAULT

 

11.1.                     Events of Default.  Each of the following shall be an
“Event of Default” hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of law or otherwise:

 

(a)                                 Any Borrower fails to pay (i) any principal
of the Loans when due (whether at stated maturity, on demand, upon acceleration
or otherwise) or any interest on the Loans when due or (ii) any fee or any other
amount (other than an amount payable under clause (i) of this Section) payable
under this Loan Agreement or any other Loan Document, when and as the same shall
become due and payable,

 

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and, in the case of this clause (ii), such failure shall continue unremedied for
a period of three (3) Business Days;

 

(b)                                 (i) Any information contained in any
Compliance Certificate or Borrowing Base Certificate was untrue or incorrect in
any material respect when made or (ii) any representation or warranty made or
delivered to Agent or any Lender by any Obligor herein, in connection with any
Loan Document or transaction contemplated thereby, or in any written statement,
report, financial statement or certificate (other than a Borrowing Base
Certificate or Compliance Certificate) is untrue, incorrect or misleading in any
material respect when given or confirmed;

 

(c)                                  Any Obligor breaches or fails to perform
any covenant contained in (i) Section 7.2 of this Loan Agreement (other than
inadvertent breaches of such covenant), (ii) in Sections 8.1, 8.2.3, 10.1.1,
10.1.2(a), 10.1.2(b), 10.1.2(c), 10.1.2(d), 10.1.2(e), 10.1.2(f), 10.1.2(n),
10.1.2(o), 10.1.3(A)(k), 10.1.3(A)(l), 10.2, or 10.3 or 10.4 of this Loan
Agreement, or (iii) any provision contained in the Senior Note Intercreditor
Agreement or any Junior Debt Intercreditor Agreement (in each case, from and
after the execution and delivery thereof);

 

(d)                                 Any Obligor breaches or fails to perform any
other covenant contained in any Loan Documents, and such breach or failure is
not cured within 30 days after a Senior Officer of such Obligor has knowledge
thereof or receives written notice thereof from Agent, whichever is sooner;
provided, however, that such notice and opportunity to cure shall not apply if
the breach or failure to perform is not capable of being cured within such
period;

 

(e)                                  Any Guarantor repudiates, revokes or
attempts to revoke its Guaranty; any Obligor denies or contests the validity or
enforceability of any Loan Documents or Obligations, or the perfection or
priority of any Lien granted to Agent; or any Loan Document ceases to be in full
force or effect for any reason (other than a waiver or release by Agent and
Lenders);

 

(f)                                   Any (x) breach or default of an Obligor or
any Subsidiary of an Obligor occurs under any document, instrument or agreement
to which it is a party or by which it or any of its Properties is bound relating
to any Debt (other than the Obligations) in excess of $5,000,000 then
outstanding if the maturity of or any payment with respect to such Debt may be
accelerated or demanded due to such breach or (y) Debt (other than the
Obligations) in excess of $5,000,000 of any Obligor or any Subsidiary of any
Obligor is required to be repaid, repurchased, redeemed or defeased, other than
in connection with a Permitted Refinancing;

 

(g)                                  Any judgment or order for the payment of
money is entered against an Obligor in an amount that exceeds, individually or
cumulatively with all unsatisfied judgments or orders against all Obligors,
$5,000,000 (other than amounts covered by insurance for which the insurer
thereof has not challenged such coverage), unless a stay of enforcement of such
judgment or order is in effect, by reason of a pending appeal or otherwise;

 

(h)                                 (i) Any Obligor becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of any Obligor and is
not released, vacated or fully bonded within 60 days after its issue or levy;

 

(i)                                     [Reserved];

 

(j)                                    Any Obligor is enjoined, restrained or in
any way prevented by any Governmental Authority from conducting any material
part of its business; any Obligor suffers the loss, revocation or termination of
any material license, permit, lease or agreement necessary to its business and
such loss, revocation or termination could reasonably be expected to result in a
Material Adverse Effect; there is a

 

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cessation of any material part of an Obligor’s business for a material period of
time not covered by business interruption insurance and such cessation could
reasonably be expected to result in a Material Adverse Effect; or any material
Collateral or Property of an Obligor is taken or impaired through condemnation
and such taking or impairment could reasonably be expected to result in a
Material Adverse Effect;

 

(k)                                 Any Insolvency Proceeding is commenced by
any Obligor or any Obligor takes any corporate action authorizing the
commencement thereof; an Insolvency Proceeding is commenced against any Obligor
and:  such Obligor consents to the institution of the proceeding against it, the
petition commencing the proceeding is not timely controverted by such Obligor,
such petition is not dismissed or stayed within 60 days after its filing, or an
order for relief is entered in the proceeding; a trustee (including an interim
trustee) is appointed to take possession of any substantial Property of or to
operate any of the business of any Obligor; or any Obligor makes an offer of
settlement, extension or composition to its unsecured creditors generally;

 

(l)                                     A Reportable Event occurs that
constitutes grounds for termination by the Pension Benefit Guaranty Corporation
ofor any Multiemployer Plan or appointment of a trustee for any Multiemployer
Plan; any Multiemployer Plan is terminated or any such trustee is requested or
appointed; any Obligor is in “default” (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan resulting from any
withdrawal therefrom; or any event similar to the foregoing occurs or exists
with respect to a Foreign Plan, in each case, where the liability associated
with the foregoing is reasonably expected to be in excess of $5,000,000;

 

(m)                             Any Obligor is criminally indicted or convicted
for (i) a felony committed in the conduct of such Obligor’s business, or
(ii) any state or federal law (including the Controlled Substances Act, Money
Laundering Control Act of 1986 and Illegal Exportation of War Materials Act)
that could lead to forfeiture of any material Property or any Collateral; or

 

(n)                                 A Change of Control occurs.

 

11.2.                     Remedies upon Default.  If an Event of Default
described in Section 11.1(k) occurs with respect to any Obligor, then to the
extent permitted by Applicable Law, all Obligations (including the Tranche A-1
Prepayment Premium) shall become automatically due and payable and all Tranche A
Revolver Commitments and unused Tranche A-1 Revolver Commitments shall
terminate, without any action by Agent or notice of any kind.  In addition, or
if any other Event of Default exists, Agent may in its discretion (and shall
upon written direction of Required Lenders) do any one or more of the following
from time to time:

 

(a)                                 declare any Obligations (including the
Tranche A-1 Prepayment Premium) immediately due and payable, whereupon they
shall be due and payable without diligence, presentment, demand, protest or
notice of any kind, all of which are hereby waived by Obligors to the fullest
extent permitted by law;

 

(b)                                 terminate, reduce or condition any of the
Tranche A Revolver Commitments or unused Tranche A-1 Revolver Commitments, or
make any adjustment to the Tranche A Borrowing Base or to the Tranche A-1
Borrowing Base;

 

(c)                                  require Obligors to Cash Collateralize LC
Obligations, Bank Product Debt and other Obligations (other than unmatured
contingent indemnification obligations) that are contingent or not yet due and
payable, and, if Obligors fail promptly to deposit such Cash Collateral, Agent
may (and shall upon the direction of Required Lenders) advance the required Cash
Collateral as Tranche A Revolver Loans (whether or not an Overadvance exists or
is created thereby, or the conditions in Section 6 are satisfied); and

 

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(d)                                 exercise any other rights or remedies
afforded under any agreement, by law, at equity or otherwise, including the
rights and remedies of a secured party under the UCC.  Such rights and remedies
include the rights to (i) take possession of any Collateral; (ii) require
Obligors to assemble Collateral, at Borrowers’ expense, and make it available to
Agent at a place designated by Agent; (iii) enter any premises where Collateral
is located and store Collateral on such premises until sold (and if the premises
are owned or leased by an Obligor, Obligors agree not to charge for such
storage); and (iv) sell or otherwise dispose of any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale, with such notice as may be required by Applicable Law, in lots
or in bulk, at such locations, all as Agent, in its discretion, deems
advisable.  Each Obligor agrees that 10 days’ notice of any proposed sale or
other disposition of Collateral by Agent shall be reasonable.  Agent shall have
the right to conduct such sales on any Obligor’s premises, without charge, and
such sales may be adjourned from time to time in accordance with Applicable
Law.  Agent shall have the right to sell, lease or otherwise dispose of any
Collateral for cash, credit or any combination thereof, and Agent may purchase
any Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of the purchase price, may set off the amount of such price
against the Obligations.

 

11.3.                     License.  Agent is hereby granted an irrevocable,
non-exclusive license or other right to use, license or sub-license (without
payment of royalty or other compensation to any Person) any or all Intellectual
Property (subject, in the case of trademarks owned by any Obligor, to sufficient
rights to quality control and inspection in favor of such Obligor to avoid the
risk of invalidation of said trademarks), computer hardware and software, trade
secrets, brochures, customer lists, promotional and advertising materials,
labels, packaging materials and other Property owned by any Obligor, in
advertising for sale, marketing, selling, collecting, completing manufacture of,
or otherwise exercising any rights or remedies with respect to, any Collateral
in each case after the occurrence, and during the continuance, of an Event of
Default.

 

11.4.                     Setoff.  Agent, Lenders and their Affiliates are each
authorized by Obligors at any time during the occurrence and continuance of an
Event of Default, without notice to Obligors or any other Person, to set off and
to appropriate and apply any deposits (general or special), funds, claims,
obligations, liabilities or other Debt at any time held or owing by Agent, any
Lender or any such Affiliate to or for the account of any Obligor against any
Obligations, whether or not demand for payment of such Obligation has been made,
any Obligations have been declared due and payable, are then due, or are
contingent or unmatured, or the Collateral or any guaranty or other security for
the Obligations is adequate.

 

11.5.                     Remedies Cumulative; No Waiver.

 

11.5.1.           Cumulative Rights.  All covenants, conditions, provisions,
warranties, guaranties, indemnities and other undertakings of Borrowers
contained in the Loan Documents are cumulative and not in derogation or
substitution of each other.  In particular, the rights and remedies of Agent and
Lenders are cumulative, may be exercised at any time and from time to time,
concurrently or in any order, and shall not be exclusive of any other rights or
remedies that Agent and Lenders may have, whether under any agreement, by law,
at equity or otherwise.

 

11.5.2.           Waivers.  The failure or delay of any party hereto to require
strict performance by any other party thereto with any terms of the Loan
Documents, or to exercise any rights or remedies with respect to Collateral or
otherwise, shall not operate as a waiver thereof nor as establishment of a
course of dealing.  All rights and remedies shall continue in full force and
effect until the payment in full, in cash of all Obligations (other than
contingent indemnification obligations) and the occurrence of the Commitment
Termination Date.  No modification of any terms of any Loan Documents (including
any waiver thereof) shall be effective, unless such modification is specifically
provided in a writing directed to Borrower Agent and executed by Borrower Agent
and Agent or the requisite Lenders, and such modification shall be applicable
only to the matter specified.  No waiver of any Default or Event of Default
shall constitute a waiver of any other Default or Event of Default that may
exist at such time, unless expressly stated.  If

 

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Agent or any Lender accepts performance by any Obligor under any Loan Documents
in a manner other than that specified therein, or during any Default or Event of
Default, or if Agent or any Lender shall delay or exercise any right or remedy
under any Loan Documents, such acceptance, delay or exercise shall not operate
to waive any Default or Event of Default nor to preclude exercise of any other
right or remedy.  It is expressly acknowledged by Obligors that any failure to
satisfy a financial covenant on a measurement date shall not be cured or
remedied by satisfaction of such covenant on a subsequent date.

 

SECTION 12.                  AGENT

 

12.1.                     Appointment, Authority and Duties of Agent

 

12.1.1.           Appointment and Authority.  Each Lender and Issuing Bank
appoints and designates Bank of America as Agent hereunder.  Agent may, and each
Lender and Issuing Bank authorizes Agent to, enter into all Loan Documents to
which Agent is intended to be a party and accept all Security Documents, for
Agent’s benefit and the Pro Rata benefit of LendersSecured Parties.  Each Lender
and Issuing Bank agrees that any action taken by Agent or Required Lenders, in
accordance with the provisions of the Loan Documents, and the exercise by Agent
or Required Lenders of any rights or remedies set forth therein, together with
all other powers reasonably incidental thereto, shall be authorized and binding
upon all Lenders and the Issuing Banks.  Without limiting the generality of the
foregoing, Agent shall have the sole and exclusive authority to (a) act as the
disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with the Loan Documents; (b) execute and
deliver as Agent each Loan Document, including any intercreditor or
subordination agreement, and accept delivery of each Loan Document from any
Obligor or other Person; (c) act as collateral agent for Secured Parties for
purposes of perfecting and administering Liens under the Loan Documents, and for
all other purposes stated therein; (d) manage, supervise or otherwise deal with
Collateral; and (e) exercise all rights and remedies given to Agent with respect
to any Collateral under the Loan Documents, Applicable Law or otherwise.  The
duties of Agent shall be ministerial and administrative in nature, and Agent
shall not have a fiduciary relationship with any Lender, Secured Party,
Participant or other Person, by reason of any Loan Document or any transaction
relating thereto.  Agent alone shall be authorized to determine whether any
fixtures, Real Estate or Inventory constitute Eligible Real Estate or Eligible
Inventory, as the case may be, or whether to impose or release any reserve,
which determinations and judgments, if exercised in good faith, shall exonerate
Agent from liability to any Lender, any Issuing Bank or other Person for any
error in judgment.

 

12.1.2.           Duties.  Agent shall not have any duties except those
expressly set forth in the Loan Documents, nor be required to initiate or
conduct any Enforcement Action except to the extent directed to do so by
Required Lenders while an Event of Default exists.  The conferral upon Agent of
any right shall not imply a duty on Agent’s part to exercise such right, unless
instructed to do so by Required Lenders in accordance with this Loan Agreement. 
Without limiting the generality of the foregoing, Agent:

 

(a)                                 shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing;

 

(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Agent is required to exercise as directed in writing by (i) the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), (ii) the Required
Tranche A-1 Lenders in accordance with Schedule 14 hereto, or (iii) solely with
respect to matters as to which any Co-Collateral Agent may direct the Agent, a
Co-Collateral Agent, provided that the Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the Agent
to liability or that is contrary to any Loan Document or Applicable Law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any debtor relief law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of
any debtor relief law;

 

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(c)                                  shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall not
be liable for the failure to disclose, any information relating to any Borrower
or any of its Affiliates that is communicated to or obtained by the Person
serving as the Agent or any of its Affiliates in any capacity;

 

(d)                                 shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required Lenders
or the Required Tranche A-1 Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Agent shall believe in good faith shall
be necessary, under the circumstances as provided in Sections 11.2 or 14.1) or
at the request of any Co-Collateral Agent; provided that, for the avoidance of
doubt, no such consent or request of the Required Lenders shall be sufficient to
excuse the Agent from taking any action required to be taken by the Agent at the
direction of the Required Tranche A-1 Lenders pursuant to Schedule 14 hereto, or
(ii) in the absence of its own gross negligence or willful misconduct, as
determined by a court of competent jurisdiction by a final and nonappealable
judgment.  The Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given in writing to the Agent by a
Borrower, a Lender or an Issuing Bank; and

 

(e)                                  shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Loan Agreement or any other Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein or the occurrence of any Default,
(iv) the validity, enforceability, effectiveness or genuineness of this Loan
Agreement, any other Loan Document or any other agreement, instrument or
document, or the creation, perfection or priority of any Lien purported to be
created by the Security Documents, (v) the value or the sufficiency of any
Collateral, or (vi) the satisfaction of any condition set forth in Section 6 or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Agent.

 

12.1.3.           Agent Professionals.  Agent may perform its duties through
agents and employees.  Agent may consult with and employ Agent Professionals,
and shall be entitled to act upon, and shall be fully protected in any action
taken in good faith reliance upon, any advice given by an Agent Professional. 
Agent shall not be responsible for the negligence or misconduct of any agents,
employees or Agent Professionals selected by it with reasonable care.

 

12.1.4.           Instructions of Required Lenders.  The rights and remedies
conferred upon Agent under the Loan Documents may be exercised without the
necessity of joinder of any other party, unless required by Applicable Law. 
Agent may request instructions from Required Lenders with respect to any act
(including the failure to act) in connection with any Loan Documents, and may
seek assurances to its satisfaction from Lenders of their indemnification
obligations under Section 12.6 against all Claims that could be incurred by
Agent in connection with any act.  Agent shall be entitled to refrain from any
act until it has received such instructions or assurances, and Agent shall not
incur liability to any Person by reason of so refraining.  Instructions of
Required Lenders shall be binding upon all Lenders, and no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
refraining from acting in accordance with the instructions of Required Lenders. 
Notwithstanding the foregoing, instructions by and consent of all Lenders shall
be required in the circumstances described in Section 14.1.1, and in no event
shall, and in no event shall Required Lenders, without the prior written consent
of each Lender, direct Agent to accelerate and demand payment of Loans held by
one Lender without accelerating and demanding payment of all other Loans, nor to
terminate the Commitments of one Lender without terminating the Commitments of
all Lenders.  In no event shall Agent be required to take any action that, in
its opinion, is contrary to Applicable Law or any Loan Documents or could
subject any Agent Indemnitee to personal liability.

 

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12.1.5.           Co-Collateral Agents.  Each Lender appoints and designates
each of Bank of America and General Electric Company (as successor in interest
by merger to General Electric Capital Corporation)Wells Fargo as a Co-Collateral
Agent hereunder.  The rights of the Co-Collateral Agents are set forth in the
Co-Collateral Agent Rights Agreement.

 

12.1.6.           No Fiduciary Relationship.  The relationship between Agent and
each of the Lenders is that of an independent contractor.  The use of the term
“Agent” is for convenience only and is used to describe, as a form of
convention, the independent contractual relationship between Agent and each of
the Lenders.  Nothing contained in this Loan Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between Agent and any of the Lenders. It is understood and agreed
that the use of the terms “Agent” and “Co-Collateral Agent” herein or in any
other Loan Documents (or any other similar term) with reference to the Agent or
any Co-Collateral Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any Applicable
Law. Instead such term is used as a matter of market custom, and is intended to
create or reflect only an administrative relationship between contracting
parties.

 

12.2.                     Agreements Regarding Collateral and Field Examination
Reports.

 

12.2.1.           Lien Releases; Care of Collateral.  Lenders authorize Agent to
(x) release any Lien with respect to any Collateral (a) upon the occurrence of
(i) the payment, in full, in cash of the Obligations (other than contingent
indemnification obligations with respect to which no claim has been asserted in
writing), (ii) the payment of any appropriate Cash Collateral deposits in
connection with contingent LC Obligations and other Obligations and (iii) the
occurrence of the Commitment Termination Date, (b) that is the subject of an
Asset Disposition which Borrower Agent certifies in writing to Agent is a
Permitted Asset Disposition (and Agent may rely conclusively on any such
certificate without further inquiry), (c) that does not constitute a material
part of the Collateral, or (d) with the written consent of all Lenders, or
(y) release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder. 
Agent shall have no obligation whatsoever to any Lenders to assure that any
Collateral exists or is owned by an Obligor, or is cared for, protected, insured
or encumbered, nor to assure that Agent’s Liens have been properly created,
perfected or enforced, or are entitled to any particular priority, nor to
exercise any duty of care with respect to any Collateral.

 

12.2.2.           Possession of Collateral.  Agent and Lenders appoint each
other Lender as agent for the purpose of perfecting Liens (for the benefit of
Secured Parties) in any Collateral that, under the UCC or other Applicable Law,
can be perfected by possession.  If any Lender obtains possession of any such
Collateral, it shall notify Agent thereof and, promptly upon Agent’s request,
deliver such Collateral to Agent or otherwise deal with such Collateral in
accordance with Agent’s instructions.

 

12.2.3.           Reports.  Agent shall promptly, upon receipt thereof, forward
to each Lender copies of the results of any field audit or other examination or
any appraisal prepared by or on behalf of Agent with respect to any Obligor or
Collateral (“Report”).  Each Lender agrees (a) that neither Bank of America nor
Agent makes any representation or warranty as to the accuracy or completeness of
any Report, and shall not be liable for any information contained in or omitted
from any Report; (b) that the Reports are not intended to be comprehensive
audits or examinations, and that Agent or any other Person performing any audit
or examination will inspect only specific information regarding Obligations or
the Collateral and will rely significantly upon Obligors’ books and records as
well as upon representations of Obligors’ officers and employees; and (c) to
keep all Reports confidential and strictly for such Lender’s internal use, and
not to distribute any Report (or the contents thereof) to any Person (except to
such Lender’s Participants, attorneys and accountants) or use any Report in any
manner other than administration of the Loans and other Obligations.  Each
Lender agrees to indemnify and hold harmless Agent and any other Person
preparing a Report from any action such Lender may take as a result of or any
conclusion it may draw from any Report, as well as any Claims arising in
connection with any third parties that obtain all or any part of a Report
through such Lender.

 

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12.3.                     Reliance By Agent.  Agent shall be entitled to rely,
and shall be fully protected in relying, upon any certification, notice or other
communication (including those by telephone, telex, telegram, telecopy or,
e-mail, Internet or intranet website posting or other distribution) believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person, and upon the advice and statements of Agent Professionals.  The Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon.  In determining compliance with any condition hereunder to
the making of a Loan, or the issuance, extension, renewal or increase of a
Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Lender or any Issuing Bank, the Agent may presume that such condition is
satisfactory to such Lender or such Issuing Bank unless the Agent shall have
received notice to the contrary from such Lender or such Issuing Bank prior to
the making of such Loan or the issuance of such Letter of Credit.  The Agent may
consult with legal counsel (who may be counsel for the Borrowers), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

12.4.                     Action Upon Default.  Agent shall not be deemed to
have knowledge of any Default or Event of Default unless it has received written
notice from a Lender, a Borrower or Borrower Agent specifying the occurrence and
nature thereof.  If any Lender acquires knowledge of a Default or Event of
Default, it shall promptly notify Agent and the other Lenders thereof in
writing.  Each Lender agrees that, except as otherwise provided in any Loan
Documents or with the written consent of Agent and Required Lenders, it will not
take any Enforcement Action, accelerate its Obligations, or exercise any right
that it might otherwise have under Applicable Law to credit bid at foreclosure
sales, UCC sales or other similar dispositions of Collateral.  Notwithstanding
the foregoing, however, a Lender may take action to preserve or enforce its
rights against an Obligor where a deadline or limitation period is applicable
that would, absent such action, bar enforcement of Obligations held by such
Lender, including the filing of proofs of claim in an Insolvency Proceeding.

 

12.5.                     Ratable Sharing.  If any Lender shall obtain any
payment or reduction of any Obligation, whether through set-off or otherwise, in
excess of its share of such Obligation, determined on a Pro Rata basis or in
accordance with Section 5.5, as applicable, such Lender shall forthwith purchase
from Agent, Issuing Bank and the other Lenders such participations in the
affected Obligation as are necessary to cause the purchasing Lender to share the
excess payment or reduction on a Pro Rata basis or in accordance with
Section 5.5, as applicable.  If any of such payment or reduction is thereafter
recovered from the purchasing Lender, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.

 

12.6.                     Indemnification of Agent Indemnitees.

 

12.6.1.           INDEMNIFICATION.  EACH LENDER SHALL INDEMNIFY AND HOLD
HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS (BUT
WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF OBLIGORS UNDER ANY LOAN
DOCUMENTS), ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR
ASSERTED AGAINST ANY AGENT INDEMNITEE; PROVIDED THAT NO LENDER SHALL HAVE ANY
OBLIGATION TO INDEMNIFY OR HOLD HARMLESS THE AGENT INDEMNITEES FOR ANY CLAIM
THAT IS DETERMINED IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY
AGENT INDEMNITEE.  If Agent is sued by any receiver, trustee in bankruptcy,
debtor-in-possession or other Person for any alleged preference from an Obligor
or fraudulent transfer, then any monies paid by Agent in settlement or
satisfaction of such proceeding, together with all interest, costs and expenses
(including attorneys’ fees) incurred in the defense of same, shall be promptly
reimbursed to Agent by Lenders to the extent of each Lender’s Pro Rata share.

 

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12.6.2.           Proceedings.  Without limiting the generality of the
foregoing, if at any time (whether prior to or after the Commitment Termination
Date) any proceeding is brought against any Agent Indemnitees by an Obligor, or
any Person claiming through an Obligor, to recover damages for any act taken or
omitted by Agent in connection with any Obligations, Collateral, Loan Documents
or matters relating thereto, or otherwise to obtain any other relief of any kind
on account of any transaction relating to any Loan Documents, each Lender agrees
to indemnify and hold harmless Agent Indemnitees with respect thereto and to pay
to Agent Indemnitees such Lender’s Pro Rata share of any amount that any Agent
Indemnitee is required to pay under any judgment or other order entered in such
proceeding or by reason of any settlement, including all interest, costs and
expenses (including attorneys’ fees) incurred in defending same; provided that
no Lender shall be liable for payment of any such amount to the extent that it
is determined in a final, non-appealable judgment by a court of competent
jurisdiction that such judgment, order or settlement resulted from any Agent
Indemnitees’ gross negligence or willful misconduct.  In Agent’s discretion,
Agent may reserve for any such proceeding, and may satisfy any judgment, order
or settlement, from proceeds of Collateral prior to making any distributions of
Collateral proceeds to Lenders provided that it has not been determined in a
final, non-appealable judgment by a court of competent jurisdiction that such
judgment, order or settlement resulted from any Agent Indemnitees’ gross
negligence or willful misconduct.

 

12.7.                     Limitation on Responsibilities of Agent.  Agent shall
not be liable to Lenders for any action taken or omitted to be taken under the
Loan Documents, except for losses directly and solely caused by Agent’s gross
negligence or willful misconduct.  Agent does not assume any responsibility for
any failure or delay in performance or any breach by any Obligor or Lender of
any obligations under the Loan Documents.  Agent does not make to Lenders any
express or implied warranty, representation or guarantee with respect to any
Obligations, Collateral, Loan Documents or Obligor.  No Agent Indemnitee shall
be responsible to Lenders for any recitals, statements, information,
representations or warranties contained in any Loan Documents; the execution,
validity, genuineness, effectiveness or enforceability of any Loan Documents;
the genuineness, enforceability, collectibility, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectibility of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Obligor or Account
Debtor.  No Agent Indemnitee shall have any obligation to any Lender to
ascertain or inquire into the existence of any Default or Event of Default, the
observance or performance by any Obligor of any terms of the Loan Documents, or
the satisfaction of any conditions precedent contained in any Loan Documents.

 

12.8.                     Successor Agent.

 

12.8.1.           Resignation; Successor Agent.  Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any time
by giving at least 30 days written notice thereof to Lenders and Borrower
Agent.  Upon receipt of such notice, Required Lenders shall have the right to
appoint a successor Agent which shall be (a) a Lender or an Affiliate of a
Lender; or (b) a commercial bank that is organized under the laws of the United
States or any state or district thereof, has a combined capital surplus of at
least $200,000,000 and (provided no Default or Event of Default exists) is
reasonably acceptable to Borrower Agent.  If no successor Agent is appointed
prior to the effective date of the resignation of Agent, then Agent may appoint
a successor agent from among the Lenders that is reasonably acceptable to the
Borrower Agent or, if no successor Lender accepts its appointment on or prior to
the effective date of the resignation of Agent, Agent may appoint any other
Person reasonably acceptable to the Borrower Agent as successor Agent.  Upon
acceptance by a successor Agent of an appointment to serve as Agent hereunder,
such successor Agent shall thereupon succeed to and become vested with all the
powers and duties of the retiring Agent without further act, and the retiring
Agent shall be discharged from its duties and obligations hereunder but shall
continue to have the benefits of the indemnification set forth in Sections 12.6
and 14.2.  Notwithstanding any Agent’s resignation, the provisions of this
Section 12 shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it whileAgent, its sub-agents and any related
persons (a) while the retiring Agent was acting as Agent and (b) after such

 

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resignation for as long as any of them continues to act in any capacity
hereunder or under the other Loan Documents, including (i) acting as collateral
agent or otherwise holding any collateral security on behalf of any of the
Lenders and (ii) in respect of any actions taken in connection with transferring
the agency to any successor Agent.  Any successor by merger or acquisition of
the stock or assets of Bank of America shall continue to be Agent hereunder
without further act on the part of the parties hereto, unless such successor
resigns as provided above.

 

12.8.2.           Separate Collateral Agent.  It is the intent of the parties
that there shall be no violation of any Applicable Law denying or restricting
the right of financial institutions to transact business in any jurisdiction. 
If Agent believes that it may be limited in the exercise of any rights or
remedies under the Loan Documents due to any Applicable Law, Agent may appoint
an additional Person who is not so limited, as a separate collateral agent or
co-collateral agent.  If Agent so appoints a collateral agent or co-collateral
agent, each right and remedy intended to be available to Agent under the Loan
Documents shall also be vested in such separate agent.  Every covenant and
obligation necessary to the exercise thereof by such agent shall run to and be
enforceable by it as well as Agent.  Lenders shall execute and deliver such
documents as Agent deems appropriate to vest any rights or remedies in such
agent.  If any collateral agent or co-collateral agent shall die or dissolve,
become incapable of acting, resign or be removed, then all the rights and
remedies of such agent, to the extent permitted by Applicable Law, shall vest in
and be exercised by Agent until appointment of a new agent.

 

12.9.                     Due Diligence and Non-Reliance.  Each Lender
acknowledges and agrees that it has, independently and without reliance upon
Agent or any other Lenders, and based upon such documents, information and
analyses as it has deemed appropriate, made its own credit analysis of each
Obligor and its own decision to enter into this Loan Agreement and to fund Loans
and participate in LC Obligations hereunder.  Each Lender has made such
inquiries concerning the Loan Documents, the Collateral and each Obligor as such
Lender feels necessary.  Each Lender further acknowledges and agrees that the
other Lenders and Agent have made no representations or warranties concerning
any Obligor, any Collateral or the legality, validity, sufficiency or
enforceability of any Loan Documents or Obligations.  Each Lender will,
independently and without reliance upon the other Lenders or Agent, and based
upon such financial statements, documents and information as it deems
appropriate at the time, continue to make and rely upon its own credit decisions
in making Loans and participating in LC Obligations, and in taking or refraining
from any action under any Loan Documents.  Except for notices, reports and other
information expressly requested by a Lender, Agent shall have no duty or
responsibility to provide any Lender with any notices, reports or certificates
furnished to Agent by any Obligor or any credit or other information concerning
the affairs, financial condition, business or Properties of any Obligor (or any
of its Affiliates) which may come into possession of Agent or any of Agent’s
Affiliates.

 

12.10.              Replacement of Certain Lenders.  In the event that (a) any
Lender is a Defaulting Lender, (b) a Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.8 or 5.9,5.8, or (c) any Lender fails to give its consent
to any amendment, waiver or action for which consent of all Lenders or all
affected Lenders was required and Required Lenders have consented thereto, then,
in addition to any other rights and remedies that any Person may have, the
Borrower Agent may, at its sole expense and effort, upon notice to such Lender
and the Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 13.2), all of its interests, rights and obligations under
this Loan Agreement and the related Loan Documents to an Eligible Assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment), provided that:

 

(a)                                  the Borrowers shall have paid to the Agent
any applicable assignment fee specified in Section 13.2 (unless such fee has
been waived by Agent);

 

(b)                                  such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans, participations
purchased in Letters of Credit, accrued interest thereon,

 

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accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.9) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);

 

(c)                                   in the case of any such assignment
resulting from a claim for compensation under Section 3.6 or payments required
to be made pursuant to Section 5.8 or 5.9,5.8, such assignment will result in a
reduction in such compensation or payments thereafter; and

 

(d)                                  such assignment does not conflict with
applicable laws.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

 

12.11.              Remittance of Payments and Collections.

 

12.11.1.    Remittances Generally.  All payments by any Lender to Agent shall be
made by the time and on the day set forth in this Loan Agreement, in immediately
available funds.  If no time for payment is specified or if payment is due on
demand by Agent and request for payment is made by Agent by 12:00 noon  on a
Business Day, payment shall be made by Lender not later than 2:00 p.m. on such
day, and if request is made after 12:00 noon, then payment shall be made by
11:00 a.m. on the next Business Day.  Payment by Agent to any Lender shall be
made by wire transfer, in the type of funds received by Agent.  Any such payment
shall be subject to Agent’s right of offset for any amounts due from such Lender
under the Loan Documents.

 

12.11.2.    Failure to Pay.  If any Lender fails to pay any amount when due by
it to Agent pursuant to the terms hereof, such amount shall bear interest from
the due date until paid at the rate determined by Agent as customary in the
banking industry for interbank compensation.  In no event shall Borrowers be
entitled to receive credit for any interest paid by a Lender to Agent.

 

12.11.3.    Recovery of Payments.  If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from an Obligor and
such related payment is not received, then Agent may recover such amount from
each Lender that received it.  If Agent determines at any time that an amount
received under any Loan Document must be returned to an Obligor or paid to any
other Person pursuant to Applicable Law or otherwise, then, notwithstanding any
other term of any Loan Document, Agent shall not be required to distribute such
amount to any Lender.  If any amounts received and applied by Agent to any
Obligations are later required to be returned by Agent pursuant to Applicable
Law, Lenders shall pay to Agent, on demand, such Lender’s Pro Rata share of the
amounts required to be returned.

 

12.12.              Agent in its Individual Capacity.  As a Lender, Bank of
America shall have the same rights and remedies under the other Loan Documents
as any other Lender, and the terms “Lenders,” and “Required Lenders” or any
similar term shall include Bank of America in its capacity as a Lender.  Each of
Bank of America and its Affiliates may accept deposits from, maintain deposits
or credit balances for, invest in, lend money to, provide Bank Products to, act
as trustee under indentures of, own securities of, serve as financial or other
advisor to, and generally engage in any kind of business with, Obligors and
their Affiliates, as if Bank of America were any other bank, without any duty to
account therefor (including any fees or other consideration received in
connection therewith) to the other Lenders.  In their individual capacity, Bank
of America and its Affiliates may receive information regarding Obligors, their
Affiliates and their Account Debtors (including information subject to
confidentiality obligations), and each Lender agrees that Bank of America and
its Affiliates shall be under no obligation to provide such information to
Lenders, if acquired in such individual capacity and not as Agent hereunder.

 

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12.13.              Agent Titles.  Each Lender, other than Bank of America, that
is designated (on the cover page of this Loan Agreement or otherwise) by Bank of
America as an “Agent”, “Co-Syndication Agent”, “Co-Documentation Agent” or
“Arranger” of any type shall not have any right, power, responsibility or duty
under any Loan Documents other than those applicable to all Lenders (or, with
respect to the Co-Collateral Agents, the rights set forth in the Co-Collateral
Agent LetterRights Agreement), and shall in no event be deemed to have any
fiduciary relationship with any other Lender.

 

12.14.              No Third Party Beneficiaries.  This Section 12 is an
agreement solely among Lenders and Agent, and does not confer any rights or
benefits upon Obligors or any other Person.  As between Obligors and Agent, any
action that Agent may take under any Loan Documents shall be conclusively
presumed to have been authorized and directed by Lenders as herein provided.

 

12.15.              Junior Debt Intercreditor Agreements.  The Lenders hereby
irrevocably authorize the Agent to enter into any intercreditor agreements or
acknowledgements thereto relating to any Junior Debt, and agree to be bound by
the provisions thereof.

 

12.16.              Mortgage Intercreditor Agreement.  The Lenders hereby
irrevocably authorize the Agent to enter into the Mortgage Intercreditor
Agreement, and agree to be bound by the provisions of the Mortgage Intercreditor
Agreement.Agent May File Proofs of Claim.  In case of any Insolvency Proceeding
or any other judicial proceeding relative to any Obligor, the Agent
(irrespective of whether the principal of any Loan or LC Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Agent shall have made any demand on the Borrowers)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

 

(a)                                 to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
LC Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the Issuing Banks, the Agent and the other Secured
Parties (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the Issuing Banks, the Agent and the
other Secured Parties  and their respective agents and counsel and all other
amounts due the Lenders, the Issuing Banks and the Agent under Sections 3.2, 3.4
and 14.2) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Secured Party to make such payments to the Agent and, if the Agent shall
consent to the making of such payments directly to the Secured Parties, to pay
to the Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Agent and its agents and counsel, and any
other amounts due the Agent under Sections 3.2, 3.4 and 14.2.

 

12.17.              Post-Closing Agreement.  The Lenders hereby irrevocably
authorize the Agent to enter into the Post-Closing Agreement, and agree to and
acknowledge the terms and provisions thereofBank Product Providers.  No Lender
or any of its branches or Affiliates that provides Bank Products and obtains the
benefits of Section 5.5.2, any Guaranty or any Collateral by virtue of the
provisions hereof or of any Guaranty or any Loan Document shall have any right
to notice of any action or to consent to, direct or object to any action
hereunder or under any other Loan Document or otherwise in respect of the
Collateral (including the release or impairment of any Collateral) other than in
its capacity as a Lender and, in such case, only to the extent expressly
provided in the Loan Documents.  Notwithstanding any other provision of this
Section 12 to the contrary, the Agent shall not be required to verify the
payment of, or that other satisfactory arrangements have been made with respect
to, Obligations arising in respect of Bank Product Debt unless the Agent has
received written notice of such Obligations, together with such supporting

 

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documentation as the Agent may request, from the applicable provider of such
Bank Products, as the case may be.

 

SECTION 13.                  BENEFIT OF AGREEMENT; ASSIGNMENTS AND
PARTICIPATIONS

 

13.1.                     Successors and Assigns.  The provisions of this Loan
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Obligor may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of Section 13.2, (ii) by way of participation in accordance with the provisions
of Section 13.3 or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of Sections 13.2.3 and 13.2.4 (and any other
attempted assignment or transfer by any party hereto shall be null and void). 
Nothing in this Loan Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of Agent, the Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Loan
Agreement.

 

13.2.                     Assignments.

 

13.2.1.           Assignments by Lenders.  Any Lender may at any time assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Loan Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this Section 13.2.1, participations in LC
Obligations and in Swingline Loans) at the time owing to it); provided that:

 

(i)                                     except in the case of an assignment of
the entire remaining amount of the assigning Lender’s (a) Tranche A Revolver
Commitment and Tranche A Revolver Loans at the time owing to it or in the case
of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund
with respect to a Lender, the aggregate amount of the Tranche A Revolver
Commitment (which for this purpose includes Tranche A Revolver Loans outstanding
thereunder) or, if the Tranche A Revolver Commitment is not then in effect, the
principal outstanding balance of the Tranche A Revolver Loans of the assigning
Tranche A Lender subject to each such assignment, determined as of the date the
Assignment and Assumption Agreement with respect to such assignment is delivered
to Agent or, if “Trade Date” is specified in the Assignment and Assumption
Agreement, as of the Trade Date, shall not be less than $10,000,000 unless each
of10,000,000, unless (1) such assignment is of the entire remaining amount of
the assigning Lender’s Tranche A Revolver Commitment and Tranche A Revolver
Loans at the time owing to it, or (2) the Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower Agent otherwise consents
(each such consent not to be unreasonably withheld or delayed) and (b) Tranche
A-1 Revolver Commitment and Tranche A-1 Revolver Loans at the time owing to it
or; provided that no minimum amount need be specified in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, ;

 

(ii)                                  the aggregate amount of the Tranche A-1
Revolver Commitment (which for this purpose includes Tranche A-1 Revolver Loans
outstanding thereunder) or, if the Tranche A-1 Revolver Commitment is not then
in effect, the principal outstanding balance of the Tranche A-1 Revolver Loans
of the assigning Tranche A-1 Lender subject to each such assignment, determined
as of the date the Assignment and Assumption Agreement with respect to such
assignment is delivered to Agent or, if “Trade Date” is specified in the
Assignment and Assumption Agreement, as of the Trade Date, shall not be less
than (x) with respect to each Tranche A-1 Lender party to this Loan Agreement as
of the Closing Date, $1,000,000 and (y) with respect to all other Tranche A-1
Lenders, $5,000,000, unless each of$10,000,000, unless (1) such assignment is of
the entire

 

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remaining amount of the assigning Lender’s Tranche A-1 Revolver Commitment or
(2) the Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower Agent otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided, however that no minimum amount need
be specified in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender;

 

(iii)                               concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether suchthe applicable minimum amount has been met under this
Section 13.2.1(i) or Section 13.2.1(ii);

 

(iv)                              (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Loan Agreement with respect to the Loans or the
Commitment assigned, except that this clause (iiiv) shall not apply to rights in
respect of Swingline Loans;

 

(v)                                 (iii) any assignment of a Commitment must be
approved by Agent,must be approved by the Borrower Agent (such approval not to
be unreasonably withheld or delayed) unless (1) an Event of Default has occurred
and is continuing or (2) such assignment is to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender; provided that the Borrower
Agent shall be deemed to have consented to any such assignment unless it shall
object thereto by written notice to the Agent within two (2) Business Days after
having received notice thereof;

 

(vi)                              any assignment of a Tranche A Revolver
Commitment must be approved by the Agent (such consent not to be unreasonably
withheld or delayed) unless the Person that is the proposed assignee is itself a
Tranche A Lender or an Affiliate of a Tranche A Lender or an Approved Fund with
respect to a Tranche A Lender;

 

(vii)                           any assignment of a Tranche A-1 Revolver Loan
must be approved by the Agent (such consent not to be unreasonably withheld or
delayed) unless such assignment is to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender;

 

(viii)                        any assignment of a Tranche A Commitment must be
approved by the Issuing Bank and the provider of Swingline Loans (with each such
approval not to be unreasonably withheld or delayed) unless the Person that is
the proposed assignee is itself a Tranche A Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and

 

(ix)                              (iv) the parties to each assignment shall
execute and deliver to Agent (1) an Assignment and Assumption Agreement, and
(2) a processing and recordation fee of $5,000.5,000; provided, however, that
the Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment.  The assignee, if it is not a
Lender, shall deliver to the Agent an administrative questionnaire; and

 

(x)                                 in connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower Agent and the Agent, the applicable
Pro Rata share of Loans previously requested but not funded by the Defaulting
Lender, to each of which the applicable assignee and assignor hereby irrevocably
consent), to (A) pay and satisfy in full all payment liabilities then owed by
such Defaulting Lender

 

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to the Agent, the Issuing Bank or any Lender hereunder (and interest accrued
thereon) and (B) acquire (and fund as appropriate) its full Pro Rata share of
all Loans and participations in Letters of Credit and Swingline Loans. 
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
Applicable Law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Loan Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by Agent pursuant to Section 13.2,
from and after the effective date specified in each Assignment and Assumption
Agreement, the Eligible Assignee thereunder shall be a party to this Loan
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption Agreement, have the rights and obligations of a Lender under this
Loan Agreement; provided, that no such Eligible Assignee (including an Eligible
Assignee that is already a Lender hereunder at the time of the assignment) shall
be entitled to receive any greater amount pursuant to Section 5.8 or 5.9 than
that to which the assignor would have been entitled to receive had no such
assignment occurred. The assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption Agreement, be released from
its obligations under this Loan Agreement (and, in the case of an Assignment and
Assumption Agreement covering all of the assigning Lender’s rights and
obligations under this Loan Agreement, such Lender shall cease to be a party
hereto) but shall continue to be entitled to the benefits of Sections 3.4, 3.6,
3.7, 3.9, 5.8, 5.95.8 and 14.2 with respect to facts and circumstances occurring
prior to the effective date of such assignment; provided, that except to the
extent otherwise expressly agreed by the affected parties, no assignment by a
Defaulting Lender will constitute a waiver or release of any claim of any party
hereunder arising from that Lender’s having been a Defaulting Lender.  Upon
request, the Borrowers (at the Borrowers’ expense) shall execute and deliver a
Note to the assignee Lender.  Any assignment or transfer by a Lender of rights
or obligations under this Loan Agreement that does not comply with this
subsection shall be treated for purposes of this Loan Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 13.3.

 

13.2.2.           Register.  Agent, acting solely for this purpose as an agent
of the Borrowers, shall maintain at Agent’s office a copy of each Assignment and
Assumption Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal
amounts (and stated interest) of the Loans and LC Obligations owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive absent manifest error, and the
Borrowers, Agent and the Lenders mayshall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Loan Agreement, notwithstanding notice to the contrary. 
The Register shall be available for inspection by each of the Borrowers and the
Issuing Bank at any reasonable time and from time to time upon reasonable prior
notice.  In addition, at any time that a request for a consent for a material or
substantive change to the Loan Documents is pending or upon and during the
continuation of any Event of Default, any Lender may request and receive from
Agent a copy of the Register.  The Register shall break out the Tranche A
Lenders and the Tranche A-1 Lenders and their respective portions of the
Obligations.

 

13.2.3.           Certain Pledges.  Nothing herein shall limit the right of a
Lender to pledge or assign any rights under the Loan Documents to (i) any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, or (ii) counterparties to swap agreements
relating to any Loans; provided that any payment by Borrowers to the assigning
Lender in respect of any Obligations assigned as described in this sentence
shall satisfy Borrowers’ obligations hereunder to the extent of such payment,
and no such assignment shall release the assigning Lender from its obligations
hereunder.

 

13.2.4.           Electronic Execution of Assignments and Certain Other
Documents.  The words “execute,” “execution,” “signed,” “signature,” and words
of like import in or related to any document to be signed in connection with
this Loan Agreement and the transactions contemplated hereby (including

 

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without limitation Assignment and AssumptionsAssumption Agreements, amendments
or other modifications, Notices of Borrowing, notices of Swingline Loan
borrowings, waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations
on electronic platforms approved by the Administrative Agent, or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any Applicable Law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act; provided that notwithstanding anything contained herein to the
contrary Agent is under no obligation to agree to accept electronic signatures
in any form or in any format unless expressly agreed to by Agent pursuant to
procedures approved by it.

 

13.2.5.           Assignment by MLPFS.  The parties hereby agree that MLPFS may,
without notice to the Borrowers, assign its rights and obligations under this
Loan Agreement to any other registered broker-dealer wholly-owned by Bank of
America Corporation to which all or substantially all of Bank of America
Corporation’s or any of its subsidiaries’ investment banking, commercial lending
services or related businesses may be transferred following the Fourth Amendment
Closing Date.

 

13.3.                     Participations

 

13.3.1.           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrowers or Agent, sell participations to any
Person (other than a natural person (or a holding company, investment vehicle or
trust for, or owned and operated for the primary benefit of a natural Person), a
Defaulting Lender or any Obligor or any Affiliate or Subsidiary of any Obligor)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Loan Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender’s participations in LC
Obligations and/or Swingline Loans) owing to it); provided that (i) such
Lender’s obligations under this Loan Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, Agent, the Lenders and
the Issuing Bank shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Loan Agreement. 
For the avoidance of doubt, each Lender shall be responsible for the indemnity
under Section 12.6.1 without regard to the existence of any participation.  Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this Loan
Agreement and to approve any amendment, modification or waiver of any  provision
of this Loan Agreement; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described Section 14.1.1 that affects
such Participant.  Subject to Section 13.3.2, the Obligors agree that each
Participant shall be entitled to the benefits of Sections 3.6, 3.9, 5.8 and
5.95.8 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to Section 13.2.13.2 (it being understood that the
documentation required under Section 5.8.5 shall be delivered to the Lender who
sells the participation); provided that such Participant agrees to be subject to
the provisions of Sections 3.8 and 12.10 as if it were an assignee under
Section 13.2.  Each Lender that sells a participation agrees, at the Borrowers’
request and expense, to use reasonable efforts to cooperate with the Borrowers
to effectuate the provisions of Section 3.6 with respect to any Participant.  To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.4 as though it were a Lender, provided that such
Participant agrees to be subject to Section 5.5 as though it were a Lender. 
Each Lender that sells a participation shall, acting solely for this purpose as 
a non-fiduciary agent of the Borrowers, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such

 

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commitment, loan, letter of credit or other obligation is in registered form
under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Loan
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Agent (in its capacity as the Agent) shall have no responsibility for
maintaining a Participant Register.

 

13.3.2.           Limitations upon Participant Rights.  A Participant shall not
be entitled to receive any greater payment under Section 3.6,3.6 or 5.8 or 5.9
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Borrowers’ prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 5.95.8 unless the Borrowers are notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 5.95.8 as though it were a
Lender.

 

13.4.                     Tax Treatment.  If any interest in a Loan Document is
transferred to a Transferee that is organized under the laws of any jurisdiction
other than the United States or any state or district thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 5.9.5.8.

 

13.5.                     Representation of Lenders.  Each Lender represents and
warrants to each Borrower, the Agent and each of the other Lenders that none of
the consideration used by it to fund its Loans or to participate in any other
transactions under this Loan Agreement constitutes for any purpose of ERISA or
Section 4975 of the Internal Revenue CodeIRC assets of any “plan” as defined in
Section 3(3) of ERISA or Section 4975 of the Internal Revenue CodeIRC and the
interests of such Lender in and under the Loan Documents shall not constitute
plan assets under ERISA.

 

SECTION 14.                  MISCELLANEOUS

 

14.1.                     Consents, Amendments and Waivers.

 

14.1.1.           Amendment.  No modification of any Loan Document, including
any extension or amendment of a Loan Document or any waiver of a Default or
Event of Default, shall be effective without the prior written agreement of
Agent, the Required Lenders (or the Agent acting at the direction of the
Required Lenders) and each Obligor party to such Loan Document; provided that:

 

(a)                                 without the prior written consent of
(i) Agent, no modification shall be effective with respect to any provision in a
Loan Document that relates to any rights, duties or discretion of Agent and
(ii) an affected Co-Collateral Agent, no modification shall be effective with
respect to any provision in a Loan Document that relates to any rights, duties
or discretion of such Co-Collateral Agent;

 

(b)                                 without the prior written consent of Issuing
Bank, no modification shall be effective with respect to any LC Obligations or
Section 2.3;

 

(c)                                  without the prior written consent of each
affected Lender, no modification shall be effective that would (i) increase the
Commitment of such Lender; (ii) reduce the amount of, or waive or delay any
scheduled payment of, any principal, interest, fees or other amounts payable to
such Lender or (iii) extend the Termination Date;

 

(d)                                 (i) without the prior written consent of the
Supermajority Lenders, no modification shall be effective that would (A) amend
the definition of Tranche A Borrowing Base or Tranche A-1 Utilization Amount (or
the defined terms used, directly or indirectly, in such definitiondefinitions),
in each case, in a manner that would result in more credit being made available
or (B) amend the definition of

 

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Supermajority Lenders and (ii) without the prior written consent of each of the
Tranche A-1 Lenders, no modification shall be effective that would (A) amend the
definition of Tranche A-1 Borrowing Base or Tranche A-1 Utilization Amount (or
the defined terms used, directly or indirectly, in such definitiondefinitions),
in each case, in a manner that would result in more credit being made available
or (B) amend the definition of Tranche A-1 Lenders, Required Tranche A-1 Lenders
or Supermajority Required Tranche A-1 Lenders; and

 

(e)                                  without the prior written consent of all
Lenders (except a Defaulting Lender as provided in Section 4.2), no modification
shall be effective that would (i) alter Section 2.1.5, Section 5.5, Section 7.1
(except to add Collateral), or Section 14.1.1; (ii) amend the definitions of Pro
Rata or Required Lenders; (iii) release, or subordinate the Lien of the Agent
on, all or substantially all of the Collateral (excluding, if any Obligor or any
Subsidiary of any Obligor becomes a debtor under the federal Bankruptcy code,
the consent to the use of “cash collateral”, as defined in Section 363(a) of the
federal Bankruptcy Code pursuant to a cash collateral stipulation with the
debtor approved by Required Lenders); (iv) except in connection with a
transaction permitted by Section 10.2.9, release all or substantially all of the
Obligors from liability under the Guaranty or (v) increase any advance rate
(other than an advance rate set forth in the definition of Tranche A-1 Borrowing
Base (or set forth in any defined term used, directly or indirectly, in such
definition), which shall require, in each case, the consent of each of the
Tranche A-1 Lenders).

 

14.1.2.           Limitations.  The agreement of Borrowers shall not be
necessary to the effectiveness of any modification of a Loan Document that deals
solely with the rights and duties of Lenders, Agent and/or Issuing Bank as among
themselves.  Only the consent of the parties to the Fee Letter or any agreement
relating to a Bank Product shall be required for any modification of such
agreement, and no Affiliate of a Lender that is party to a Bank Product
agreement shall have any other right to consent to or participate in any manner
in modification of any other Loan Document.  The making of any Loans during the
existence of a Default or Event of Default shall not be deemed to constitute a
waiver of such Default or Event of Default, nor to establish a course of
dealing.  Any waiver or consent granted by Lenders hereunder shall be effective
only if in writing, and then only in the specific instance and for the specific
purpose for which it is given.

 

14.1.3.           Payment for Consents.  No Borrower will, directly or
indirectly, pay any remuneration or other thing of value, whether by way of
additional interest, fee or otherwise, to any Lender (in its capacity as a
Lender hereunder) as consideration for agreement by such Lender with any
modification of any Loan Documents, unless such remuneration or value is
concurrently paid, on the same terms, on a Pro Rata basis to all Lenders
providing their consent (it being understood and agreed that the payment of any
amounts agreed among the Borrowers, MLPFS, the Agent and any Lender or
Increasing Lender participating in connection with an increase in the Tranche A
Revolver Commitments or the Tranche A Revolver Commitments under Section 2.4
shall not be subject to this Section 14.1.3).

 

14.1.4.           Generally.  Notwithstanding anything to the contrary herein,
(i) no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender and
(ii) no Junior Lien Agent, Junior Lien Lender or Junior Lien Affiliate who is an
assignee of any rights and obligations under this Loan Agreement or a
Participant shall have any right to approve or disapprove any amendment, waiver
or consent hereunder or shall be entitled to vote on matters relating to the
Loan Documents (including during any Insolvency Proceeding of any Obligor) and
shall not be deemed to be a “Lender” for any such purpose, except that the
Commitment of such Person may not be increased or extended without the consent
of such Person.

 

14.2.                     Indemnity.  EACH BORROWER SHALL INDEMNIFY AND HOLD
HARMLESS THE INDEMNITEES AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, PROCEEDINGS, COSTS AND EXPENSES OF ANY
KIND (INCLUDING REMEDIAL RESPONSE COSTS, REASONABLE AND

 

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DOCUMENTED ATTORNEYS’ FEES AND EXTRAORDINARY EXPENSES OF ONE OUTSIDE COUNSEL,
ONE LOCAL COUNSEL IN EACH RELEVANT JURISDICTION (AS DETERMINED BY THE AGENT IN
ITS REASONABLE DISCRETION), ONE SPECIAL OR REGULATORY COUNSEL IN RESPECT OF EACH
MATTER (AS REASONABLY REQUIRED BY THE AGENT) AND CONFLICT OF INTEREST COUNSEL
(AS DETERMINED BY THE AGENT IN ITS REASONABLE DISCRETION)) AT ANY TIME
(INCLUDING AFTER FULL PAYMENT OF THE OBLIGATIONS, RESIGNATION OR REPLACEMENT OF
AGENT, OR REPLACEMENT OF ANY LENDER) INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE IN ANY WAY RELATING TO (A) ANY LOAN DOCUMENTS OR TRANSACTIONS
RELATING THERETO OR THE ADMINISTRATION OF THE LOAN DOCUMENTS, (B) ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY ANY INDEMNITEE IN CONNECTION WITH ANY LOAN
DOCUMENTS, (C) THE EXISTENCE OR PERFECTION OF ANY LIENS, OR REALIZATION UPON ANY
COLLATERAL, (D) EXERCISE OF ANY RIGHTS OR REMEDIES UNDER ANY LOAN DOCUMENTS OR
APPLICABLE LAW, (E) FAILURE BY ANY OBLIGOR TO PERFORM OR OBSERVE ANY TERMS OF
ANY LOAN DOCUMENT, IN EACH CASE INCLUDING ALL REASONABLE AND DOCUMENTED
OUT-OF-POCKET COSTS AND EXPENSES RELATING TO ANY INVESTIGATION, LITIGATION,
ARBITRATION OR OTHER PROCEEDING (INCLUDING AN INSOLVENCY PROCEEDING OR APPELLATE
PROCEEDINGS), WHETHER OR NOT THE APPLICABLE INDEMNITEE IS A PARTY THERETO,
(F) ANY LOAN OR LETTER OF CREDIT OR THE USE OR PROPOSED USE OF THE PROCEEDS
THEREFROM (INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH
SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT),
(G) ANY ACTUAL OR ALLEGED ENVIRONMENTAL RELEASE ON OR FROM ANY PROPERTY OWNED OR
OPERATED BY ANY BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL
LIABILITIES IN CONNECTION WITH ANY ACTUAL OR ALLEGED VIOLATION OF OR ANY
OBLIGATION UNDER ANY ENVIRONMENTAL LAW RELATED IN ANY WAY TO ANY BORROWER OR ANY
OF ITS SUBSIDIARIES, OR (H) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER BROUGHT BY A THIRD
PARTY OR BY A BORROWER OR ANY OTHER OBLIGOR (HEREINAFTER, “CLAIMS”) THAT MAY BE
INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ARISING FROM
THE NEGLIGENCE OF AN INDEMNITEE.  In no event shall any party to a Loan Document
have any obligation thereunder to indemnify or hold harmless an Indemnitee with
respect to a Claim that is determined in a final, non-appealable judgment by a
court of competent jurisdiction to result from the bad faith, gross negligence
or willful misconduct of such Indemnitee.  If any claim is made against any
Indemnitee which may result in a claim under this Section 14.2 against
Borrowers, such Indemnitee or Agent shall promptly send to Borrower Agent
written notice thereof, and Borrower Agent shall have the right, at its expense
and with counsel reasonably satisfactory to Agent, to defend such claim. 
Neither any Indemnitee nor any Borrower shall settle any such claim without the
consent of the other party, which consent shall not be unreasonably withheld. 
Notwithstanding the foregoing, the failure of such prompt notice shall not
negate or impair the obligation of the Borrowers under this Section 14.2, but
shall give Borrowers the right to withhold against any indemnity payment the
amount of any actual damages incurred by Borrowers as a result of the failure to
give such prompt notice.

 

14.3.                     Notices and Communications.

 

14.3.1.           Notice Address.  Subject to Section 4.1.4, all notices,
requests and other communications by or to a party hereto shall be in writing
and shall be given to any Borrower, at Borrower Agent’s address shown on the
signature pages hereof, and to any other Person at its address shown on the
signature pages hereof (or, in the case of a Person who becomes a Lender after
the Closing Date, at the

 

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address shown on its Assignment and Assumption Agreement), or at such other
address as a party may hereafter specify by notice in accordance with this
Section 14.3.  Each such notice, request or other communication shall be
effective only (a) if given by facsimile transmission, when transmitted to the
applicable facsimile number, if confirmation of receipt is received; (b) if
given by mail, three Business Days after deposit in the U.S. mail, with
first-class postage pre-paid, addressed to the applicable address; or (c) if
given by personal delivery, when duly delivered to the notice address with
receipt acknowledged., or (d) if given by electronic mail, to the extent
provided in Section 14.3.2.  Notwithstanding the foregoing, no notice to Agent
pursuant to Section 2.2, 2.3, 3.1.2 or 4.1.1 shall be effective until actually
received by the individual to whose attention at Agent such notice is required
to be sent.  Any written notice, request or other communication that is not sent
in conformity with the foregoing provisions shall nevertheless be effective on
the date actually received by the noticed party.  Any notice received by
Borrower Agent shall be deemed received by all Borrowers.

 

14.3.2.           Electronic Communications; Voice Mail.  Electronic mail and
internet websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by
Section 10.1.2, administrative matters, distribution of Loan Documents for
execution, and matters permitted under Section 4.1.4.  Agent and Lenders make no
assurances as to the privacy and security of electronic communications. 
Electronic and voice mail may not be used as effective notice under the Loan
Documents.

 

(a)                                 Notices and other communications to the
Lenders and the Issuing Banks hereunder may be delivered or furnished by
electronic communication (including e-mail, FpML messaging, and Internet or
intranet websites) pursuant to procedures approved by the Agent, provided that
the foregoing shall not apply to notices to any Lender or the Issuing Bank
pursuant to Section 2 if such Lender or the Issuing Bank, as applicable, has
notified the relevant Agent that it is incapable of receiving notices under
Section 2 by electronic communication.  The Agent, the Issuing Banks or the
Borrower Agent may each, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

 

(b)                                 Unless the Agent otherwise prescribes,
(i) notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor;
provided that, for both clauses (i) and (ii), if such notice, email or other
communication is not sent during the normal business hours of the recipient,
such notice, email or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient.  Voice mail may
not be used as effective notice under the Loan Documents.

 

14.3.3.           Non-Conforming Communications.  Agent and Lenders reasonably
may rely upon any notices purportedly given by or on behalf of any Borrower even
if such notices were not made in a manner specified herein, were incomplete or
were not confirmed, or if the terms thereof, as understood by the recipient,
varied from a later confirmation.  Each Borrower shall indemnify and hold
harmless each Indemnitee from any liabilities, losses, costs and expenses
arising from any telephonic communication purportedly given by or on behalf of a
Borrower.

 

14.3.4.           Change of Address, Etc.  Each of the Obligors, the Agent, and
the Issuing Banks may change their address, facsimile or telephone number for
notices and other communications hereunder by notice to the other parties
hereto.  Each other Lender may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the Borrower Agent,
the Agent and the Issuing Bank.  In addition, each Lender agrees to notify the
Agent from time to time to ensure that the

 

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Agent has on record (i) an effective address, contact name, telephone number,
facsimile number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender. 
Furthermore, each Public Lender agrees to cause at least one individual at or on
behalf of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and Applicable Law, including
Securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrowers or
their securities for purposes of Securities Laws.

 

14.4.                     Performance of Borrowers’ Obligations.  Agent may, in
its discretion at any time and from time to time after the occurrence, and
during the continuance, of an Event of Default, at Borrowers’ expense, pay any
amount or do any act required of a Borrower under any Loan Documents or
otherwise lawfully requested by Agent to (a) enforce any Loan Documents or
collect any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agent’s Liens
in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien.  All payments, costs and expenses (including Extraordinary
Expenses) of Agent under this Section 14.4 shall be reimbursed to Agent by
Borrowers, on demand, with interest from the date incurred to the date of
payment thereof at the Default Rate applicable to Base Rate Tranche A-1 Revolver
Loans.  Any payment made or action taken by Agent under this Section 14.4 shall
be without prejudice to any right to assert an Event of Default or to exercise
any other rights or remedies under the Loan Documents.

 

14.5.                     Credit Inquiries.  Each Obligor hereby authorizes
Agent and Lenders (but they shall have no obligation) to respond to usual and
customary credit inquiries from third parties concerning any Obligor or
Subsidiary.

 

14.6.                     Severability.  Wherever possible, each provision of
the Loan Documents shall be interpreted in such manner as to be valid under
Applicable Law.  If any provision is found to be invalid under Applicable Law,
it shall be ineffective only to the extent of such invalidity and the remaining
provisions of the Loan Documents shall remain in full force and effect.

 

14.7.                     Cumulative Effect; Conflict of Terms.  The provisions
of the Loan Documents are cumulative.  The parties acknowledge that the Loan
Documents may use several different limitations, tests or measurements to
regulate the same or similar matters, and they agree that these are cumulative
and that each must be performed as provided.  Except as otherwise specifically
provided in another Loan Document (by specific reference to the applicable
provision of this Loan Agreement), if any provision contained herein is in
direct conflict with any provision in another Loan Document, the provision
herein shall govern and control.

 

14.8.                     Counterparts; Facsimile Signatures.  Any Loan Document
may be executed in counterparts, each of which taken together shall constitute
one instrument.  Loan Documents may be executed and delivered by facsimile or
electronic transmission (including .pdf file), and they shall have the same
force and effect as manually signed originals.  Agent may require confirmation
by a manually-signed original, but failure to request or deliver same shall not
limit the effectiveness of any facsimile or electronic transmission signature.

 

14.9.                     Entire Agreement.  Time is of the essence of the Loan
Documents.  The Loan Documents, and any separate letter agreements with respect
to fees payable to the Agent or the Issuing Banks, embody the entire
understanding of the parties with respect to the subject matter thereof and
supersede all prior understandings regarding the same subject matter.

 

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14.10.              Obligations of Lenders.  The obligations of each Lender
hereunder are several, and no Lender shall be responsible for the obligations or
Commitments of any other Lender.  Amounts payable hereunder to each Lender shall
be a separate and independent debt, and each Lender shall be entitled, to the
extent not otherwise restricted hereunder, to protect and enforce its rights
arising out of the Loan Documents.  It shall not be necessary for Agent or any
other Lender to be joined as an additional party in any proceeding for such
purposes.  Nothing in this Loan Agreement and no action of Agent or Lenders
pursuant to the Loan Documents shall be deemed to constitute Agent and Lenders
to be a partnership, association, joint venture or any other kind of entity, nor
to constitute control of any Obligor.  Each Obligor acknowledges and agrees that
in connection with all aspects of any transaction contemplated by the Loan
Documents, Obligors, Agent, Issuing Bank and Lenders have an arms-length
business relationship that creates no fiduciary duty on the part of
Agent, Issuing Bank or any Lender, and each Obligor, Agent, Issuing Bank and
Lender expressly disclaims any fiduciary relationship.

 

14.11.              Confidentiality.  During the term of this Loan Agreement and
for 12 months thereafter, Agent and Lenders agree to take reasonable precautions
to maintain the confidentiality of any information that Obligors deliver to
Agent and Lenders and identify as confidential at the time of delivery, except
that Agent and any Lender may disclose such information (a) to their respective
officers, directors, employees, Affiliates and agents, including legal counsel,
auditors and other professional advisors; (b) to any party to the Loan Documents
from time to time; (c) pursuant to the order of any court or administrative
agency; (d) upon the request of any Governmental Authority exercising regulatory
authority over Agent or such Lender; (e) which ceases to be confidential, other
than by an act or omission of Agent or any Lender, or which becomes available to
Agent or any Lender on a nonconfidential basis; (f) to the extent reasonably
required in connection with any litigation relating to any Loan Documents or
transactions contemplated thereby, or otherwise as required by Applicable Law;
(g) to the extent reasonably required for the exercise of any rights or remedies
under the Loan Documents; (h) to any actual or proposed party to a Bank Product
or to any Transferee, as long as such Person agrees to be bound by the
provisions of this Section 14.11; (i) to the National Association of Insurance
Commissioners or any similar organization, or to any nationally recognized
rating agency that requires access to information about a Lender’s portfolio in
connection with ratings issued with respect to such Lender; (j) to any investor
or potential investor in an Approved Fund that is a Lender or Transferee, but
solely for use by such investor to evaluate an investment in such Approved Fund,
or to any manager, servicer or other Person in connection with its
administration of any such Approved Fund; or (k) with the consent of Borrowers. 
Notwithstanding the foregoing, Agent and Lenders may issue and disseminate to
the public general information describing this credit facility, including the
names and addresses of Obligors and a general description of Obligors’
businesses, and may (so long as the Borrower Agent has previously reviewed and
approved the form of such advertisement or promotional materials) use Obligors’
names in advertising and other promotional materials.

 

14.12.              GOVERNING LAW.  THIS LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, NEW YORK GENERAL OBLIGATIONS
LAW SECTIONS 5-1401 AND 5-1402 (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO
NATIONAL BANKS).

 

14.13.              Consent to
Forum.14.13.1.                                            Forum.  EACH BORROWER
HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT SITTING
IN OR WITH JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY STATE
COURT OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF MANHATTAN, IN ANY
PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT
ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH
BORROWER IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE
REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR
INCONVENIENT FORUM.  Nothing herein shall limit the right of Agent or any Lender
to bring proceedings against any

 

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Obligor in any other court.  Nothing in this Loan Agreement shall be deemed to
preclude enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction.

 

14.14.              Waivers by Borrowers.  To the fullest extent permitted by
Applicable Law, each Borrower waives (a) the right to trial by jury (which Agent
and each Lender hereby also waives) in any proceeding, claim or counterclaim of
any kind relating in any way to any Loan Documents, Obligations or Collateral;
(b) presentment, demand, protest, notice of presentment, default, non-payment,
maturity, release, compromise, settlement, extension or renewal of any
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which a Borrower may in any
way be liable, and hereby ratifies anything Agent may do in this regard;
(c) notice prior to taking possession or control of any Collateral; (d) any bond
or security that might be required by a court prior to allowing Agent to
exercise any rights or remedies; (e) the benefit of all valuation, appraisement
and exemption laws; (f) any claim against Agent or any Lender, on any theory of
liability, for special, indirect, consequential, exemplary or punitive damages
(as opposed to direct or actual damages) in any way relating to any Enforcement
Action, Obligations, Loan Documents or transactions relating thereto; and
(g) notice of acceptance hereof.  Each Borrower acknowledges that the foregoing
waivers are a material inducement to Agent and Lenders entering into this Loan
Agreement and that Agent and Lenders are relying upon the foregoing in their
dealings with Borrowers.  Each Borrower has reviewed the foregoing waivers with
its legal counsel and has knowingly and voluntarily waived its jury trial and
other rights following consultation with legal counsel.  In the event of
litigation, this Loan Agreement may be filed as a written consent to a trial by
the court.

 

14.15.              Patriot Act Notice.  Agent and Lenders hereby notify
Borrowers that pursuant to the requirements of the Patriot Act, Agent and
Lenders are required to obtain, verify and record information that identifies
each Borrower, including its legal name, address, tax ID number and other
information that will allow Agent and Lenders to identify it in accordance with
the Patriot Act.  Agent and Lenders will also require information regarding each
personal guarantor, if any, and may require information regarding Borrowers’
management and owners, such as legal name, address, social security number and
date of birth.

 

14.16.              Survival of Representations and Warranties.  All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the Agent and
each Lender, regardless of any investigation made by the Agent or any Lender or
on their behalf and notwithstanding that the Agent or any Lender may have had
notice or knowledge of any Default at the time of any extension of credit
hereunder, and shall continue in full force and effect as long as any Loan or
any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding.

 

14.17.              No Advisory or Fiduciary Responsibility.  In connection with
all aspects of each transaction contemplated hereby (including in connection
with any amendment, waiver or other modification hereof or of any other Loan
Document), each Borrower and each Guarantor acknowledges and agrees that:
(i) (A) the arranging and other services regarding this Loan Agreement provided
by the Agent and, the Joint Lead Arrangers and the Lenders are arm’s-length
commercial transactions between the Borrowers and the Guarantors and their
respective Affiliates, on the one hand, and the Agent and, the Joint Lead
Arrangers and the Lenders, on the other hand, (B) each Borrower each Guarantor
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate, and (C) each BorrowersBorrower and each
Guarantor is capable of evaluating, and understands and accepts, the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents; (ii) (A) the Agent and, the Joint Lead Arrangers and the Lenders
each is and has been acting solely as a principal and, except as expressly
agreed in writing by the relevant parties, has not been, is not, and will not be
acting as an advisor, agent or fiduciary for any Borrower, any Guarantor or any
of their respective Affiliates, or any other Person and (B) neither the Agent
nor, any Joint Lead Arranger nor any Lender has any obligation to any Borrower,
any Guarantor or any of their respective Affiliates with respect to the
transactions

 

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contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Agent, the Joint Lead Arrangers and the
Lenders and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrowers, the
Guarantors and their respective Affiliates, and neither the Agent nor, any Joint
Lead Arranger nor any Lender has any obligation to disclose any of such
interests to the Borrowers, the Guarantors or any of their respective
Affiliates.  To the fullest extent permitted by law, each Borrower and each
Guarantor hereby waives and releases any claims that it may have against the
Agent and the, any Joint Lead Arrangers or any Lender with respect to any breach
or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby.

 

14.18.              Resignation as Issuing Bank or Provider of Swingline Loans
after Assignment.  Notwithstanding anything to the contrary contained herein, if
at any time Bank of America assigns all of its Tranche A Revolver Commitment and
Tranche A Loans, Bank of America may, (i) upon 30 days’ notice to the Borrower
and the Lenders, resign as Issuing Bank and/or (ii) upon 30 days’ notice to the
Borrower, resign as provider of Swingline Loans.  In the event of any such
resignation as Issuing Bank or provider of Swingline Loans, the Borrower Agent
shall be entitled to appoint from among the Lenders a successor Issuing Bank or
provider of Swingline Loans; provided, however, that no failure by the Borrower
Agent to appoint any such successor shall affect the resignation of Bank of
America as Issuing Bank or provider of Swingline Loans, as the case may be.  If
Bank of America resigns as Issuing Bank, it shall retain all the rights, powers,
privileges and duties of Issuing Bank hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as Issuing Bank
and all LC Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Tranche A Revolver Loans or fund risk participations
in unreimbursed drawings of Letters of Credit.  If Bank of America resigns as
provider of Swingline Loans, it shall retain all the rights of provider of
Swingline Loans provided for hereunder with respect to Swingline Loans made by
it and outstanding as of the effective date of such resignation, including the
right to require the Lenders to make Base Rate Tranche A Revolver Loans or fund
risk participations in outstanding Swingline Loans.  Upon the appointment of a
successor Issuing Bank and/or provider of Swingline Loans, (a) such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring Issuing Bank or provider of Swingline Loans, as the
case may be, and (b) the successor Issuing Bank shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to Bank of America to
effectively assume the obligations of Bank of America with respect to such
Letters of Credit.

 

14.19.              Amendment and Restatement of Existing Loan Agreement.  On
the Closing Date, this Loan Agreement shall amend, restate and supersede the
Existing Credit Agreement in its entirety, except as provided in this
Section 14.19.  On the Closing Date, the rights and obligations of the parties
evidenced by the Existing Credit Agreement shall be evidenced by this Loan
Agreement and the other Loan Documents and the grant of security interest in the
Collateral by the relevant Obligors under the Existing Credit Agreement and the
other “Loan Documents” (as defined in the Existing Credit Agreement) shall
continue under but as amended by this Loan Agreement and the other Loan
Documents, and shall not in any event be terminated, extinguished or annulled
but shall hereafter be governed by this Loan Agreement and the other Loan
Documents.  All references to the Existing Credit Agreement in any Loan Document
or other document or instrument delivered in connection therewith shall be
deemed to refer to this Loan Agreement and the provisions hereof.  Without
limiting the generality of the foregoing and to the extent necessary, the
existing lenders, the Lenders and the Agents reserve all of their rights under
the Existing Credit Agreement and the other “Loan Documents” (as defined in the
Existing Credit Agreement) which by their express terms survive the termination
of the Existing Credit Agreement and each of the Guarantors hereby obligates
itself again in respect of all such present and future “Obligations” (as defined
in the Existing Credit Agreement).  Nothing contained herein shall be construed
as a novation of the “Obligations” outstanding under and as defined in the
Existing Credit Agreement, which shall remain in full force and effect, except
as modified hereby.

 

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14.20.              Keepwell.  Each Obligor that is a Qualified ECP Guarantor at
the time the Guaranty or the grant of the security interest under the Loan
Documents, in each case, by any Specified Loan PartyObligor, becomes effective
with respect to any Swap Obligation, hereby jointly and severally, absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support to each Specified Loan PartyObligor with respect to such Swap Obligation
as may be needed by such Specified Loan PartyObligor from time to time to honor
all of its obligations under its Guaranty and the other Loan Documents in
respect of such Swap Obligation (but, in each case, only up to the maximum
amount of such liability that can be hereby incurred without rendering such
Qualified ECP Guarantor’s obligations and undertakings under this Section 14.20
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount).  The obligations and undertakings of
each Qualified ECP Guarantor under this Section 14.20 shall remain in full force
and effect until the Obligations have been indefeasibly paid and performed in
full.  Each Qualified ECP Guarantor intends this Section 14.20 to constitute,
and this Section 14.20 shall be deemed to constitute, a guarantee of the
obligations of, and a “keepwell, support, or other agreement” for the benefit
of, each Specified Loan PartyObligor for all purposes of the Commodity Exchange
Act.

 

14.21.              Acknowledgment and Consent to Bail-In of EEA Financial
Institutions.  Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Lender that is an EEA
Financial Institution arising under any Loan Document, to the extent such
liability is unsecured, may be subject to the Write-Down and Conversion Powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

 

(a)                                 the application of any Write-Down and
Conversion Powers by an EEA Resolution Authority to any such liabilities arising
hereunder which may be payable to it by any Lender that is an EEA Financial
Institution; and

 

(b)                                 the effects of any Bail-in Action on any
such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or
cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such
liability into shares or other instruments of ownership in such EEA Financial
Institution, its parent undertaking, or a bridge institution that may be issued
to it or otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such
liability under this Loan Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability
in connection with the exercise of the Write-Down and Conversion Powers of any
EEA Resolution Authority.

 

14.22.              Agreement Among Tranche A Lenders and the Tranche A-1
Lenders.  The Agent, the Tranche A Lenders and the Tranche A-1 Lenders hereby
acknowledge the agreements contained in Schedule 14 hereto, and that the
agreements contained in this Loan Agreement (including, without limitation
Section 5.5) and in Schedule 14 hereto constitute a “subordination agreement”
under Section 510(a) of the Bankruptcy Code (or any similar provision of other
Applicable Law) and shall be enforceable in any Insolvency Proceeding.  The
terms set forth in Schedule 14 hereto are solely for the benefit of the Tranche
A Lenders and the Tranche A-1 Lenders.  No other Person (including any Obligor)
shall be deemed to be a third party beneficiary of the terms set forth in
Schedule 14 hereto.  Notwithstanding anything to the contrary in this Loan
Agreement or in any other Loan Document, the Obligors hereby consent to and
approve the assignment of the Tranche A Claims (as defined in Schedule 14
hereto) contemplated by Section 10 of Schedule 14 to this Loan Agreement.

 

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Schedule 14

 

Agreement Among Tranche A Lenders and Tranche A-1 Lenders

 

The Agent, the Tranche A Lenders and the Tranche A-1 Lenders (collectively, the
“Parties”) hereby agree among themselves as follows:

 

1.              Insolvency Proceedings and Bankruptcy Financing.

 

(a)         General Application.  The terms set forth in this Schedule 14 to the
Loan Agreement shall be applicable both before and after the institution of any
Insolvency Proceeding involving any Borrower or any other Obligor, including
without limitation, the filing of any petition by or against any Borrower or any
other Obligor under the Bankruptcy Code or any other insolvency law and all
converted or succeeding cases in respect thereof, and all references herein to
any Borrower or other Obligor shall be deemed to apply to the trustee for any
such Borrower or Obligor and such Borrower or Obligor as a
debtor-in-possession.  The agreements set forth in the Loan Agreement and this
Schedule 14 to the Loan Agreement constitute a “subordination agreement” under
Section 510(a) of the Bankruptcy Code (or any similar provision of other
Applicable Law) and shall be enforceable in any Insolvency Proceeding.

 

(b)         Bankruptcy Financing.

 

I.                                        If any Obligor shall become subject to
any Insolvency Proceeding and if, as a debtor or debtor-in-possession, such
Obligor moves for approval of (i) financing to be provided in good faith by the
Agent or any Tranche A Lender (each a “DIP Lender” and collectively, the “DIP
Lenders”), under Section 364 of the Bankruptcy Code or any similar provision of
other Applicable Law (“DIP Financing”), or (ii) the use of cash collateral (as
such term is defined under Section 363 of the Bankruptcy Code) with the consent
of the Agent (referred to herein as “Cash Collateral Use” and, together with a
DIP Financing, a “Post-Petition Financing”), each Tranche A-1 Secured Party
agrees and confirms that it shall be deemed to have consented to such
Post-Petition Financing and that it shall not object to any such Post-Petition
Financing (nor support any other Person objecting to such Post-Petition
Financing or request the Agent make any such objection), on any grounds so long
as such Post-Petition Financing is a Conforming Post-Petition Financing.  If in
connection with any Post-Petition Financing, any Liens on the Collateral held by
the Tranche A Secured Parties are subject to a surcharge or are subordinated to
an administrative priority claim or are subject to a Carve Out, and so long as
the amount of such surcharge or Carve Out is reasonable under the circumstances,
and the Agent establishes a borrowing base reserve in the amount of the Carve
Out, then the Liens on the Collateral of the Agent for the benefit of the
Tranche A-1 Secured Parties shall also be subordinated to such surcharge, claim,
Carve Out, court ordered charge, fees or other similar interest or right.

 

II.                                   The Tranche A-1 Secured Parties agree that
they shall not offer or provide, and shall not permit any Affiliate controlled
by any of them to offer or provide, and shall not support any other Person in
providing or offering, any post-petition financing to the Obligors in any
Insolvency Proceeding that is secured by a Lien that is senior or pari passu to
the Lien of the Agent held for the benefit of the Tranche A Lenders.

 

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III.                              Nothing in this Schedule 14 to the Loan
Agreement shall limit the rights of the Tranche A Secured Parties to object to
any post-petition financing provided or offered to be provided by the Tranche
A-1 Secured Parties in connection with any Insolvency Proceeding on any grounds.

 

(c)          Relief from Stay.  Notwithstanding anything to the contrary
contained in this Schedule 14 or in the Loan Agreement, (i) each Tranche A-1
Secured Party agrees not to (x) except to the extent Agent breaches its
obligations under Section 4 of this Schedule 14 to the Loan Agreement, seek (or
support any other Person seeking) relief from the automatic stay or any other
stay in any Insolvency Proceeding in respect of the Collateral, without the
prior written consent of the Agent, or (y) oppose any request by the Agent or
any Tranche A Lender to seek relief from the automatic stay or any other stay in
any Insolvency Proceeding in respect of the Collateral, and (ii) the Tranche A-1
Secured Parties shall have the right to instruct the Agent to seek relief from
the automatic stay or any other stay in any Insolvency Proceeding in respect of
the Collateral upon satisfaction of the Directed Enforcement Conditions.

 

(d)         Plan of Reorganization.

 

I.                                        The Parties hereby agree that (x) the
Tranche A Secured Parties shall not seek in any Insolvency Proceeding to be
treated as part of the same class of creditors as the Tranche A-1 Secured
Parties and shall not oppose or object to any pleading or motion by the Tranche
A-1 Secured Parties for the Tranche A-1 Secured Parties and the Tranche A
Secured Parties to be treated as separate classes of creditors and (y) the
Tranche A-1 Secured Parties shall not seek in any Insolvency Proceeding to be
treated as part of the same class of creditors as the Tranche A Secured Parties
and shall not oppose or object to any pleading or motion by the Tranche A
Secured Parties for the Tranche A Secured Parties and the Tranche A-1 Secured
Parties to be treated as separate classes of creditors.

 

II.                                   Notwithstanding Section 1(d)(I) of this
Schedule 14 to the Loan Agreement, if the Tranche A Claims and the Tranche A-1
Claims are classified in the same class (within the meaning of
Section 1123(a) under the Bankruptcy Code or any similar provision of Applicable
Law), (x) no Tranche A Secured Party will, in its capacity as a holder of any
Tranche A Claims, vote to “accept” a Plan (within the meaning of
Section 1126(c) under the Bankruptcy Code or any similar provision of Applicable
Law) unless the Tranche A-1 Secured Parties holding at least two-thirds in
amount of the Tranche A-1 Claims voting on such Plan have voted to accept such
Plan with respect to such class, and (y) no Tranche A-1 Secured Party will, in
its capacity as a holder of a Tranche A-1 Claims, vote to “accept” a Plan
(within the meaning of Section 1126(c) under the Bankruptcy Code or any similar
provision of Applicable Law) unless the Tranche A Secured Parties holding at
least two-thirds in amount of the Tranche A Claims voting on such Plan have
voted to accept such Plan with respect to such class.  In furtherance of the
foregoing, each Tranche A Secured Party and each Tranche A-1 Secured Party shall
submit any votes on a Plan to the Agent (and only the Agent) not later than
three (3) Business Days prior to the voting deadline established pursuant to the
terms of such Plan or any court order establishing voting or meeting procedures
(“Voting Procedures Order”).  The Agent shall promptly tally the votes and, only
if the Agent determines that Tranche A Secured Parties and Tranche A-1 Secured
Parties

 

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holding the requisite minimum two-thirds in amount of each such tranche of
claims voting on such Plan have voted to accept such Plan, the Agent shall
submit such votes in accordance with the terms of the Plan or Voting Procedures
Order.  The Agent shall submit any votes to “reject” such Plan in accordance
with the terms of the Plan or Voting Procedures Order.  The Agent shall be
authorized by each Secured Party to seek to withdraw any vote submitted by such
Secured Party in contravention of the procedures set forth herein.

 

III.                              Notwithstanding Section 1(d)(II), in the event
the Tranche A Claims and the Tranche A-1 Claims are classified in the same class
(within the meaning of Section 1123(a) of the Bankruptcy Code or any similar
provision of Applicable Law) and notwithstanding that such claims are in fact
classified in the same class, votes with respect to the Tranche A Claims and the
Tranche A-1 Claims shall be tabulated and treated as if the Plan had provided
for separate classification of the Tranche A Claims and the Tranche A-1 Claims
such that if the Plan could have been confirmed without the acceptance by
two-thirds in amount of the Tranche A-1 Claims as a separate class (assuming the
Tranche A Claims the Tranche A-1 Claims were each voting as separate classes),
then the Agent shall submit the vote of the Tranche A Secured Parties on the
Plan in accordance with the Voting Procedures Order without regard to any vote
of the Tranche A-1 Secured Parties.  The Parties agree that any determination
pursuant to clause (III) as to whether a Plan could have been confirmed without
acceptance by two-thirds in amount of the Tranche A-1 Claims as a separate class
(assuming the Tranche A Claims the Tranche A-1 Claims were each voting as
separate classes) shall be submitted to the United States Bankruptcy Court (the
“Bankruptcy Court”) exercising jurisdiction in the case(s) in which the Plan has
been proposed (the “Case”) (or other court of competent jurisdiction in the Case
or over the determination contemplated by this clause (III) in the event the
Bankruptcy Court fails or refuses to make such determination) (any such court of
competent jurisdiction, together with the Bankruptcy Court, the “Applicable
Court”); provided that the Parties agree that pending decision by the Applicable
Court, such determination may be made on an interim basis by the Agent in good
faith acting as an independent arbiter (the “Agent Appointed Process”).  The
Parties acknowledge and agree that it is their mutual intent and desire that the
Applicable Court make such determination and that the Agent Appointed Process is
available if the Agent in good faith determines that it is necessary to
undertake the Agent Approved Process for the purpose of preserving the ability
of the Agent to submit votes on behalf of the Tranche A Secured Parties and
Tranche A-1 Secured Parties in accordance with this Section 1(e) of this
Schedule 14 of the Loan Agreement in the event that the Bankruptcy Court
determines that it lacks subject matter jurisdiction or any Applicable Court
(including the Bankruptcy Court) is unable to make such determination prior to
the deadline by which votes in the Case are to be submitted.  In furtherance of
the foregoing, the Parties agree that they shall, in good faith, (i) seek an
expedited determination by the Applicable Court, (ii) cooperate to establish
procedures, subject to approval of the Applicable Court, that facilitate an
expedited determination by the Applicable Court, and (iii) cooperate to seek
such other and further relief from the Applicable Court as may be reasonably
appropriate in furtherance of the Parties’ intent.  The Parties further agree
that neither their agreement to participate in the Agent Appointed Process nor
any decision by the Agent (nor submissions, correspondence or communications by,
between and/or among the Agent, Tranche A Lenders and the Tranche A-1 Lenders)
shall be used

 

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in any manner to prejudice their rights to have the determination independently
made by the Applicable Court and any such submissions, correspondence or
communications shall be, to the fullest extent permitted by Applicable Law,
treated as a confidential settlement communication to be used for settlement
purposes only.  Any conflict between a determination by the Applicable Court and
the Agent on the subject matter to be determined shall be governed by the
determination by the Applicable Court.  In the event that the Bankruptcy Court
fails or refuses to make the determination contemplated by this clause (III) and
nonetheless enters an order confirming the Plan, the Agent shall not be relieved
of any liability to the Tranche A-1 Lenders arising from or relating to a breach
of this Section 1(d) as a result of the subsequent determination by a court of
competent jurisdiction that the Agent did not act in good faith in undertaking
the Agent Appointed Process.

 

IV.                               In furtherance of the foregoing, the Tranche A
Secured Parties and the Tranche A-1 Secured Parties agree not to object to
separate classification and that Section 1(d)(II) of this Schedule 14 to the
Loan Agreement shall not apply to the extent the Plan separately classifies the
Tranche A Claims and the Tranche A-1 Claims.

 

(e)          Additional Agreements and Waivers.  Each Tranche A-1 Secured Party
hereby agrees that such Tranche A-1 Secured Party shall not propose or support
any Plan that is inconsistent with the priorities set forth in the Loan
Agreement (including this Schedule 14 to the Loan Agreement) unless consented to
by the Agent and the Tranche A Lenders holding two-thirds in amount of the
Tranche A Claims.  In addition, (A) each Tranche A-1 Secured Party agrees that,
in any Insolvency Proceeding, it shall not vote with respect to any Plan or
proposal or take any other action to contest (or support any other Person
contesting) (i) the priority, perfection or validity of any Lien held by the
Agent, the Tranche A Claims or any Collateral or guarantees thereof or (ii) any
of the Agent’s or any Secured Party’s obligations and agreements set forth in
this Schedule 14 to the Loan Agreement and (B) each Tranche A Secured Party
agrees that, in any Insolvency Proceeding, it shall not take any other action to
contest (or support any other Person contesting) (i) the priority, perfection or
validity of any Lien held by the Agent, the Tranche A-1 Claims or any Collateral
or guarantees thereof or (ii) any of the Agent’s or any Secured Party’s
obligations and agreements set forth in this Schedule 14 to the Loan Agreement.

 

2.              Release of Obligors, Liens and Collateral.  Notwithstanding
anything to the contrary in the Loan Agreement, each Tranche A-1 Secured Party
agrees that it will not raise any objection to, or oppose, and shall be deemed
to have consented to the release of any Obligor from its obligations under any
Loan Document or to any private or public sale of all or any portion of the
Collateral (and any post-petition or post-filing assets subject to adequate
protection Liens or comparable Liens under the Bankruptcy Code (or any other
Applicable Law) in favor of the Agent) free and clear of any Liens and other
claims (a) at any time after the occurrence and during the continuance of an
Event of Default under the Loan Agreement if the Agent has consented to such
release or sale; provided, however, that after the occurrence and during the
continuance of an Event of Default under the Loan Agreement and prior to the
commencement of any Insolvency Proceeding involving any Obligor, any such sale
by the Agent shall be made in accordance with Applicable Law and the Agent shall
provide not less than fourteen (14) days’ prior written notice to the Tranche
A-1 Secured Parties of any proposed sale (including any foreclosure sale), or
(b) under Section 363 of the Bankruptcy Code (or other similar provision of any
Applicable Law) in each case under the foregoing clauses (a) and (b) if the
Tranche A Lenders (subject to Section 4.2 of the Loan Agreement) having Tranche
A Revolver Commitments in excess of 50% of the aggregate Tranche A Revolver
Commitments (or if the Tranche A Revolver Commitments have terminated, Tranche

 

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A Revolver Loans and LC Obligations in excess of 50% of all outstanding Tranche
A Revolver Loans and LC Obligations) have consented to such release or sale, and
in connection with each of the foregoing clauses (a) and (b), each Tranche A-1
Secured Party hereby irrevocably authorizes the Agent to release any Lien on any
of the Collateral; provided that any Lien of the Agent on such Collateral
attaches to the net proceeds of such sale of the Collateral received by the
Agent and that all proceeds of the Collateral received by the Agent from such
sale are, after application to any Post-Petition Financing, applied in
accordance with Section 5.5.2 of the Loan Agreement.

 

3.              Calculation of the Borrowing Base.  Each of the Parties agrees
that (a) in all cases, the determination of the Aggregate Borrowing Base (and
all component and sub-component definitions thereof), Overadvance Loan (and all
component and sub-component definitions thereof), and Protective Advances (and
all component and sub-component definitions thereof) shall be based upon the
most recent Borrowing Base Certificate received by the Agent pursuant to the
Loan Agreement prior to the funding of any Tranche A Loan or the issuance,
renewal or amendment of a Letter of Credit (it being understood and agreed that
the use of cash collateral in an Insolvency Proceeding shall not constitute a
funding of a Loan or other advance) and (b) the Agent shall have a three
(3) Business Day period of time to implement such Borrowing Base Certificate.

 

4.              Exercise of Remedies.  Upon the satisfaction of the Directed
Enforcement Conditions, the Required Tranche A-1 Lenders may direct the Agent to
(and the Agent shall, upon such direction) commence and diligently pursue in
good faith the exercise of the Agent’s enforcement rights or remedies against,
and take action to enforce its Liens on, the Collateral, to the extent that the
Agent is permitted to exercise such rights and remedies by the terms of the Loan
Documents and/or under Applicable Law; provided that, in the case of each of the
foregoing, (a) in the good faith determination of the Agent, taking such
enforcement action is permitted under the terms of the Loan Documents and
Applicable Law and (b) the Agent shall be entitled to all of the benefits of
Sections 3.4, 12.6 and 14.2 of the Loan Agreement in connection with taking such
enforcement action.

 

5.              Credit Bid.  Each of the Parties hereby agrees that the Agent on
behalf of itself and the other Tranche A Secured Parties may credit bid the
Tranche A Claims in accordance with Section 363(k) of the Bankruptcy Code (or
any similar provision of other Applicable Law, including the UCC) and each
Tranche A-1 Secured Party agrees not to object to such credit bid, so long as
such credit bid does not exceed the amount of the Tranche A Claims.  Each of the
Parties hereby agrees that the Required Tranche A-1 Lenders may direct the Agent
to, on behalf of the Tranche A-1 Secured Parties, credit bid the Tranche A-1
Claims in accordance with Section 363(k) of the Bankruptcy Code (or any similar
provision of other Applicable Law, including the UCC), and the Agent agrees to
take such direction from the Required Tranche A-1 Lenders and to not object
thereto, in each case, so long as the Tranche A Claims shall be paid in full in
cash upon the effectiveness of any such sale under Section 363 of the Bankruptcy
Code (or any similar provision of other Applicable Law).  The Parties hereby
agree that in the event the Agent takes any action to credit bid the Tranche A-1
Claims upon the direction of the Required Tranche A-1 Lenders on behalf of the
Tranche A-1 Secured Parties, that the Agent shall be entitled to all of the
benefits of Sections 3.4, 12.6 and 14.2 of the Loan Agreement in connection with
such action.

 

6.              Standing; Objection Rights.  The Agent and the Tranche A Secured
Parties each agree that, in any Insolvency Proceeding involving an Obligor, the
Tranche A-1 Secured Parties shall have standing (a) to object to any violation
of the express terms of this Schedule 14 to the Loan Agreement, (b) to assert
the rights provided to the Tranche A-1 Secured Parties (i) to object if a
Post-Petition Financing is not a Conforming Post-Petition Financing, or (ii) to
raise defenses for a contravention of Section 2 or Section 5 of this Schedule 14
to the Loan Agreement, or (c) for

 

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purposes of a determination pursuant to Section 1(d)(III) of this Schedule 14,
and in furtherance thereof, that in connection with any such Insolvency
Proceeding, the Agent shall not, on its behalf or on behalf of the Required
Lenders, raise any objection on the grounds of a lack of standing of the Tranche
A-1 Secured Parties (other than to the extent such action is prohibited by this
Schedule 14 to the Loan Agreement or otherwise inconsistent herewith).  In the
event that any Tranche A-1 Secured Party becomes a judgment lien creditor in
respect of any Collateral securing the Obligations, such judgment lien shall be
subordinated to any Lien on such Collateral securing the Tranche A Claims on the
same basis and to the same extent as the Liens on the Collateral of the Agent
securing the Tranche A-1 Claims are subordinated (including with respect to the
proceeds thereof being subject to Section 5.5 of the Loan Agreement) to those
Liens securing the Tranche A Claims under the Loan Agreement and this Schedule
14 to the Loan Agreement.

 

7.              Application of Proceeds to Separate Claims; Avoidance;
Reinstatement of Obligations.

 

(a)         Whether or not it is held that the Tranche A Claims and the Tranche
A-1 Claims together constitute only one secured claim (rather than separate
classes of secured claims), the Tranche A-1 Secured Parties hereby agree that in
any Insolvency Proceeding or any similar proceeding under any Applicable Law of
any Obligor, all payments and distributions shall be applied as if the Tranche A
Claims and the Tranche A-1 Claims were separate classes of secured claims
against the Obligors in respect of the Collateral with the effect that the
Tranche A Secured Parties shall be entitled to receive payment in full of all
amounts owing to them in respect of Priority Tranche A Claims (whether or not
allowed in any Insolvency Proceeding or any similar proceeding under any
Applicable Law, and including in respect of post-petition interest and expenses)
that would be owing to them as if the Obligations owing to the Tranche A Secured
Parties were so classified as a separate claim and secured by a separate Lien,
with the Tranche A-1 Secured Parties hereby acknowledging and agreeing to turn
over to the Tranche A Secured Parties proceeds of Collateral otherwise received
or receivable by them to the extent necessary to effectuate the intent of this
Section 7(a) of this Schedule 14 to the Loan Agreement.

 

(b)         If a Tranche A Secured Party or a Tranche A-1 Secured Party receives
payment or property on account of a Tranche A Claim or a Tranche A-1 Claim, and
the payment is subsequently invalidated, avoided, declared to be fraudulent or
preferential, set aside or otherwise required to be transferred to a trustee,
receiver or the estate of any Obligor (in each instance, to the extent required
by applicable law, a “Recovery”), then, to the extent of the Recovery, the
Tranche A Claims or the Tranche A-1 Claims intended to have been satisfied by
the payment will be reinstated as the Tranche A Claims or the Tranche A-1
Claims, as applicable, on the date of Recovery, and no payment with respect to,
or discharge of the Tranche A Claims or the Tranche A-1 Claims, as applicable,
will be deemed to have occurred for all purposes hereunder.  If the Loan
Agreement is terminated prior to a Recovery, the Loan Agreement (including,
without limitation, this Schedule 14 to the Loan Agreement) will be reinstated
in full force and effect, and such prior termination will not diminish, release,
discharge, impair, or otherwise affect the obligations of the Obligors from the
date of reinstatement.  Upon such reinstatement of the Obligations, each Tranche
A Secured Party or Tranche A-1 Secured Party, as applicable, will deliver to the
Agent any Collateral or proceeds thereof received in payment of, or to
discharge, the Obligations to effect the reinstatement required pursuant to the
terms hereof.  No Tranche A Secured Party or Tranche A-1 Secured Party may
benefit from a Recovery, and any distribution made to a Tranche A-1 Secured
Party as a result of a Recovery will be paid over to the Agent for application
to the Obligations in accordance with Section 5.5.2 of the Loan Agreement (after
application to any Post-Petition Financing).

 

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(c)          In the event that, notwithstanding the provisions hereof, proceeds
of Collateral shall be received by any Tranche A-1 Secured Party or Tranche A
Secured Party in violation of the priorities set forth in Section 5.5 of the
Loan Agreement, such proceeds of Collateral shall be held in trust for the
benefit of and shall be paid over to or delivered to the Agent upon the Agent’s
or the Required Lenders’ or the Tranche A-1 Required Lenders’ written demand. 
Until the Priority Tranche A Claims are paid in full in cash, the Tranche A-1
Secured Parties shall have no right of subrogation to the rights of the Tranche
A Secured Parties to receive payments or distributions of cash or property
applicable to the Tranche A Claims.  For purposes of such subrogation, no
payments or distributions to the Tranche A Secured Parties of any cash or
property to which the Tranche A-1 Secured Parties would be entitled except for
the provisions of the Loan Agreement, and no payment over to the Tranche A
Secured Parties pursuant to the Loan Agreement by the Tranche A-1 Secured
Parties, as between any Obligor, its creditors (other than the Tranche A Secured
Parties), and the Tranche A-1 Secured Parties shall be deemed to be a payment by
the Obligors to or on account of the Tranche A-1 Claims.

 

8.              Certain Modifications to Loan Documents.

 

(a)         Notwithstanding anything to the contrary in the Loan Agreement,
unless the Supermajority Required Tranche A-1 Lenders shall have consented
thereto, the Agent and the Tranche A Lenders agree that they shall not vote to
approve any modification to, or waiver of, the Loan Agreement (including any
refinancing or replacement thereof, including pursuant to a Post-Petition
Financing) which effects any or all of the following:

 

I.                                        the failure to deduct the Tranche A-1
Utilization Amount from the formulas set forth in the definitions of “LC
Conditions” or “Excess Availability” or in Sections 2.1.1 or 2.1.4 of the of the
Loan Agreement;

 

II.                                   (x) an amendment, modification or waiver
of Section 10.3.1 of the Loan Agreement in a manner that would reduce the
percentage (or the calculation of what such percentage is being applied to) set
forth in clause (i) thereof or that would reduce the amount set forth in clause
(ii) thereof, or (y) an amendment, modification or waiver of Section 10.3.2 of
the Loan Agreement in a manner that would reduce the percentage (or the
calculation of what such percentage is being applied to) set forth therein or
that would reduce the required Consolidated Fixed Charge Coverage Ratio or the
frequency of testing of the Consolidated Fixed Charge Coverage Ratio (it being
understood that each of clauses (x) and (y) includes any amendments,
modifications or waivers of such financial covenants (including any component
definitions contained therein or any sub-component thereof) in connection with
the making any Tranche A Revolver Loans if, to the knowledge of the Agent at the
time of, or after giving effect to the making of, such Tranche A Revolver Loans,
an Event of Default under any financial covenant in Section 10.3.1 or
Section 10.3.2 would exist, in each case, other than the making of Tranche A
Revolver Loans consisting of Protective Advances), or (z) an amendment of the
definitions used in Section 10.3 (including the component definitions used
therein or any sub-component thereof) in a manner that would be more favorable
to the Borrowers or would result in more credit being made available to the
Borrowers;

 

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III.                              an amendment, modification or waiver of
Section 8.1, Section 10.1.1, Section 10.1.2(a), Section 10.1.2(b),
Section 10.1.2(c), Section 10.1.2(d) or Section 10.1.2.(f), in each case, in a
manner that would be more favorable to the Borrowers;

 

IV.                               an amendment, modification or change of or to
the definition of “Aggregate Borrowing Base” or “Tranche A Borrowing Base” or
any component definition thereof (including any sub-component thereof) in a
manner that would result in more credit being made available to the Borrowers
(other than changes required to implement the Permitted Insolvency Increase
Amount);

 

V.                                    an amendment, modification or waiver of
Section 2.1.4 or modification of the definition of “Tranche A Overadvance” or
“Protective Advances” (including any component thereof, including any
sub-component thereof) so as to increase the amount of Tranche A Overadvances or
Protective Advances or to extend the time period for Tranche A Overadvances or
Protective Advances;

 

VI.                               any increase in the interest rates applicable
to the Tranche A Claims (other than any increase occurring because of
fluctuations in underlying rate indices or imposition of the default rate), or
of the default rate applicable to Tranche A Claims, unless such increase is
accompanied by an equivalent increase in the interest rates applicable to the
Tranche A-1 Claims, or the default rate applicable to the Tranche A-1 Claims;
provided, however, that, for the avoidance of doubt, the foregoing shall not
apply to any interest or fees payable to the Agent or any DIP Lender in
connection with any Post-Petition Financing;

 

VII.                          an amendment, modification or waiver of
Section 2.4.1 in a manner that would cause the aggregate Tranche A Revolver
Commitments to exceed $800,000,000;

 

VIII.                     other than in connection with a Conforming
Post-Petition Financing, adds new tranches of Debt under the Loan Agreement that
are senior to or pari passu in right of repayment with the Loans; or

 

IX.                               an amendment, modification or change of or to
the definition of “Eligible Assignee” (including any component thereof,
including any sub-component thereof).

 

Except as such may relate to the Tranche A-1 Utilization Amount, as hereinabove
provided, nothing contained herein shall limit, restrict or impair the
discretionary rights and ability of the Agent to impose or establish any and all
Availability Reserves and to thereafter reduce, release or eliminate such
Availability Reserves or to determine the eligibility of Collateral for
inclusion in the calculation of the Tranche A Borrowing Base (or any component
definition thereof) or the Tranche A-1 Borrowing Base (or any component
definition thereof), in each case, as provided in the Loan Agreement; provided
that, subject to the following proviso, the Agent agrees not to release any
Availability Reserves in effect in the Fourth Amendment Closing Date and agrees
to impose a methodology no less restrictive than that used on the Fourth
Amendment Closing Date in determining Availability Reserves (and, for the
avoidance of doubt, it being understood that notwithstanding the preservation of
a methodology that is no less restrictive, the absolute dollar amount of such
Availability Reserves may fluctuate from time to time and may be adjusted based
on changes in the facts or circumstances that gave rise thereto); and provided
further that, in connection with a Post-Petition Financing, the DIP Lender may
release or eliminate any

 

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Availability Reserves that relate to claims or rights that are not senior in
priority to such Post-Petition Financing (“Released Insolvency Reserves”).

 

(b)         During the occurrence and continuance of any Event of Default, upon
the written request of the Required Tranche A-1 Lenders, the Agent shall
implement the Default Rate under Section 3.1.1(b) of the Loan Agreement (to the
extent that the Agent is permitted to do so).

 

9.              Amendments to Schedule 14; Third Party Beneficiaries; Successors
and Assigns.

 

(a)         No amendment or waiver of the specific terms set forth in this
Schedule 14 to the Loan Agreement, nor any consent to any departure by any of
the Agent, the Tranche A Lenders or the Tranche A-1 Secured Parties shall be
effective, unless it is in a written agreement executed by the Agent, the
Tranche A Lenders, and the Supermajority Required Tranche A-1 Lenders and then
such waiver or consent shall only be effective in the specific instance and for
the specific purpose for which given; provided that such amendment or agreement
solely with respect to this Schedule 14 to the Loan Agreement as between the
Agent and the Supermajority Required Tranche A-1 Lenders shall not operate to
modify or amend any provision of the Loan Agreement, unless the Lead Borrower
otherwise agrees.

 

(b)         The terms set forth on this Schedule 14 to the Loan Agreement are
solely for the benefit of the Tranche A Secured Parties and the Tranche A-1
Secured Parties.  No other Person (including any Obligor, any Subsidiary of any
Obligor or any Affiliate of any Obligor) shall be deemed to be a third party
beneficiary of the terms set forth in this Schedule 14 to the Loan Agreement.

 

This Schedule 14 to the Loan Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the Tranche A Lenders and the
Trance A-1 Lenders, including all other Lenders that are successors to or
assignees of each such Lender and including any successor Agent.

 

10.       Purchase Option with Respect to the Tranche A Claims.

 

(a)         If (i) the Agent shall notify the Tranche A-1 Lenders of its
intention to (by itself or at the direction of the Required Lenders), sell,
lease, license or otherwise dispose of all or substantially all of the
Collateral whether by private or public sale, in accordance with Section 2 of
this Schedule 14 to the Loan Agreement; provided that any notice from the Agent
to the Tranche A-1 Lenders of the Agent’s intention to conduct such a sale shall
be delivered by the Agent to the Tranche A-1 Lenders no less than fourteen (14)
days prior to the commencement of any such sale, (ii) the Directed Enforcement
Conditions have been and continue to be satisfied or (iii) an Insolvency
Proceeding is commenced by or against any Obligors and the Obligors have not
entered into, and are not seeking to enter into, a Post-Petition Financing that
is a Conforming Post-Petition Financing (any such foregoing event is referred to
herein as a “Purchase Option Event”), any Tranche A-1 Lender (or any Tranche A-1
Lenders acting collectively) shall have the opportunity to purchase all (but not
less than all) of the Tranche A Claims pursuant to this Section 10 of this
Schedule 14 to the Loan Agreement.  Upon the occurrence and during the
continuation of a Purchase Option Event, the applicable Tranche A-1 Lenders may
exercise the purchase option contemplated by this Section 10 by delivering a
written notice (a “Purchase Notice”) to the Agent, which Purchase Notice shall
(A) be signed by the Tranche A-1 Lenders committing to such purchase (the
“Purchasing Creditors”) and indicate the percentage of the Tranche A Claims to
be purchased by each Purchasing Creditor (which aggregate

 

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commitments must add up to one hundred percent (100%) of the Tranche A Claims)
and (B) state that (1) it is a Purchase Notice delivered pursuant to this
Section 10 of this Schedule 14 to the Loan Agreement and (2) the offer contained
therein is irrevocable.  Upon receipt of such Purchase Notice by the Agent, the
Purchasing Creditors shall have from the date of delivery thereof to and
including the date that is ten (10) Business Days after the Purchase Notice was
received by the Agent to purchase all (but not less than all) of the Tranche A
Claims pursuant to this Section 10 of this Schedule 14 to the Loan Agreement
(the date of such purchase, the “Tranche A Purchase Date”).

 

(b)         On the Tranche A Purchase Date, the Agent and the other Tranche A
Secured Parties shall, subject to any required approval of any Governmental
Authority, in each case then in effect, if any, sell to the Purchasing Creditors
all (but not less than all) of the Tranche A Claims.  On such Tranche A Purchase
Date, the Purchasing Creditors shall (i) pay to the Agent, for the benefit of
the Tranche A Secured Parties, as directed by the Agent, in immediately
available funds the full amount (at par) of all Tranche A Claims together with
all accrued and unpaid interest and fees thereon, all in the amounts specified
by the Agent and determined in good faith in accordance with the Loan Documents
or other applicable documents, but excluding, however, any portion of the
Tranche A Claims consisting of a prepayment penalty, prepayment fee or
prepayment premium; provided, that if the Purchasing Creditors receive any such
prepayment penalty, fee or premium within six (6) months after the Tranche A
Purchase Date, such amount shall be held in trust for the benefit of the Tranche
A Secured Parties and forthwith paid over to Agent for the benefit of the
Tranche A Secured Parties, (ii) furnish such amount of cash collateral in
immediately available funds as the Agent determines is reasonably necessary to
secure the Tranche A Secured Parties on terms reasonably satisfactory to the
Agent in connection with any (x) asserted indemnification claims, (y) all LC
Obligations, and (z) any other contingent Tranche A Claims, and (iii) agree to
reimburse the Tranche A Secured Parties for any loss, cost, damage or expense
resulting from the granting of provisional credit for any checks, wire or ACH
transfers that are reversed or not final or other payments provisionally
credited to the Tranche A Claims under the Loan Agreement and as to which the
Agent and Tranche A Secured Parties have not yet received final payment as of
the Purchase Date.  Such purchase price shall be remitted by wire transfer in
immediately available funds to such bank account of the Agent (for the benefit
of the applicable Tranche A Secured Parties) as the Agent shall have specified
in writing to the Purchasing Creditors.  Interest and fees shall be calculated
to but excluding the Purchase Date if the amounts so paid by the Purchasing
Creditors to the bank account designated by the Agent are received in such bank
account prior to 12:00 p.m., Eastern time, and interest shall be calculated to
and including such Tranche A Purchase Date if the amounts so paid by the
Purchasing Creditors to the bank account designated by the Agent are received in
such bank account after 12:00 p.m., Eastern time.

 

(c)          Any purchase pursuant to the purchase option set forth in this
Section 10 of this Schedule 14 to the Loan Agreement shall, except as provided
below, be expressly made without representation or warranty of any kind by the
Agent or the other Tranche A Secured Parties as to the Tranche A Claims, the
Collateral or otherwise, and without recourse to the Agent and the other Tranche
A Secured Parties as to the Tranche A Claims, the Collateral or otherwise,
except that the Agent and each Tranche A Secured Party, as to itself only, shall
represent and warrant only as to (i) the principal amount of the Tranche A
Claims being sold by it, (ii) that such Person has not created any Lien on, or
sold any participation in, any Tranche A Claims being sold by it, and (iii) that
such Person has the right to assign the Tranche A Claims being assigned by it.

 

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(d)         In connection with any purchase of Tranche A Claims pursuant to this
Section 10 of this Schedule 14 to the Loan Agreement, each Tranche A Secured
Party agrees to enter into and deliver to the Purchasing Creditors on the
Tranche A Purchase Date, as a condition to closing, an Assignment and Assumption
Agreement substantially in the form attached to the Loan Agreement or any other
form approved by the Agent and, at the expense of the Obligors, each of the
Tranche A Secured Parties shall deliver all possessory Collateral held by them
pursuant to the Loan Agreement and related to the Tranche A Claims (if any),
together with any necessary endorsements and other documents (including any
applicable stock powers or note powers), then in such Tranche A Secured Party’s
possession or in the possession of its agent or bailee, or turn over control as
to any pledged Collateral, deposit accounts or securities accounts of which such
Tranche A Secured Party or its agent or bailee then has control, as the case may
be, to any Person designated by the Purchasing Creditors to act as the successor
Agent and otherwise take such actions as may be reasonably appropriate to effect
an orderly transition to any Person designated by the Purchasing Creditors to
act as the successor Agent.  Upon the consummation of the purchase of the
Tranche A Claims pursuant to this Section 10 of this Schedule 14 to the Loan
Agreement, the Agent and the Co-Collateral Agents shall be deemed to have
resigned as an “agent” or “administrative agent” and/or “collateral agent” (or
any similar role) for the Secured Parties under the Loan Documents; provided
that the Agent and the Co-Collateral Agents (and all other agents under the Loan
Agreement) shall be entitled to all of the rights and benefits of a former
“agent,” “administrative agent,” “collateral agent” or similar role under the
Loan Agreement.

 

(e)          Notwithstanding the foregoing purchase of the Tranche A Claims by
the Purchasing Creditors, the Tranche A Secured Parties shall retain those
contingent indemnification obligations and other obligations under the Loan
Documents which by their terms would survive any repayment of the Tranche A
Claims.

 

(f)           During the period beginning upon Agent’s receipt of the Purchase
Notice and continuing until the eleventh (11th) Business Day following such
receipt, the Tranche A Secured Parties (absent exigent circumstances as
reasonably determined by Agent) (i) shall not commence any exercise of rights or
remedies against the Collateral or the Obligors and (ii) upon written request of
the Required Tranche A-1 Lenders, shall suspend any such exercise of rights or
remedies.

 

[Remainder of Page Intentionally Left Blank; Definitions on Following Page]

 

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Definitions for Purposes of Schedule 14 to the Loan Agreement

 

Unless otherwise defined in this Schedule 14 to the Loan Agreement, terms used
in this Schedule 14 shall have the meaning ascribed to such terms in the Loan
Agreement.  In addition, as used in Schedule 14 to the Loan Agreement the
following terms shall have the following meanings:

 

“Agent Appointed Process” has the meaning set forth in Section 1(d)(III) of this
Schedule 14 to the Loan Agreement.

 

“Applicable Court” has the meaning set forth in Section 1(d)(III) of this
Schedule 14 to the Loan Agreement.

 

“Cap Amount” shall mean, as of any date of determination, the lesser of
(a) $800,000,000 and (b) the sum of (i) the Tranche A Borrowing Base, minus
(ii) the Tranche A-1 Utilization Amount, plus (iii) Protective Advances, plus
(iv) the amount of any Released Insolvency Reserves, plus (v) the Permitted
Insolvency Increase Amount, plus (vi) any Inadvertent Overadvance Amounts, plus
(vii) the Carve Out; provided that the agent under any Post-Petition Financing
shall implement, and maintain, at all times, a borrowing base reserve in the
amount of the Carve Out.

 

“Carve Out” means, in connection with any Insolvency Proceeding, any carve out
amount granted with respect to professional fees and expenses, court costs,
filing fees, and fees and costs of the Office of the United States Trustee as
granted by the court or as agreed to by the Agent in its reasonable discretion.

 

“Case” has the meaning set forth in Section 1(d)(III) of this Schedule 14 to the
Loan Agreement.

 

“Cash Collateral Use” has the meaning set forth in Section 1(b)(I) of this
Schedule 14 to the Loan Agreement.

 

“Conforming Post-Petition Financing” shall mean a Post-Petition Financing that
satisfies the following requirements, to the extent applicable: (a) the Liens of
the Agent to secure the Tranche A-1 Claims retain the same relative priority
(such Liens and the proceeds of the Collateral subject to such Liens being
subordinate to the Lien securing any such Post-Petition Financing and any
adequate protection liens (for the avoidance of doubt, the Lien securing such
Post-Petition Financing shall be senior or pari passu to the Liens of the Agent
securing the Tranche A Claims and the Tranche A-1 Claims)) as existed prior to
the commencement of any such Insolvency Proceeding, (b) the Agent receives a
replacement Lien to secure the Tranche A-1 Claims on post-petition assets to the
same extent granted to the Agent in respect of the Tranche A Claims and the DIP
Lenders under the Post-Petition Financing, with the same relative priority (such
replacement Liens and the proceeds of the Collateral subject to such replacement
Liens being subordinate to the Lien securing any such Post-Petition Financing
(for the avoidance of doubt, the Lien securing such Post-Petition Financing
shall be senior or pari passu to the replacement Liens of the Agent securing the
Tranche A Claims)) as existed prior to the commencement of any such Insolvency
Proceeding, (c) the aggregate principal amount of loans and letters of credit
outstanding under such Post-Petition Financing when aggregated (without
duplication) with the aggregate principal amount of loans and letters of credit
included in the Tranche A Claims outstanding does not exceed the Cap Amount,
(d) any Post-Petition Financing will not require the Obligors to seek
confirmation of a specific plan of reorganization, compromise or arrangement for
which all or substantially all of the material terms are set forth in the
documentation evidencing such Post-Petition Financing (but for the avoidance of
doubt, such Post-Petition Financing may include deadlines for the confirmation
of a plan of reorganization, compromise or arrangement or with respect to sales
of Collateral, in each case, satisfactory to the DIP Lenders) and (e) the
interest rate, fees and other material terms of such Post-Petition Financing are
commercially reasonable under the circumstances.

 

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“DIP Lender(s)” has the meaning set forth in Section 1(b)(I) of this Schedule 14
to the Loan Agreement.

 

“Directed Enforcement Conditions” shall mean (a) at all times except during an
Insolvency Proceeding involving the Obligors, when each of the following
conditions are satisfied: (i) an Event of Default has occurred and is continuing
under the Loan Agreement and such Event of Default has not been waived in
accordance with the terms of the Loan Agreement or this Schedule 14 to the Loan
Agreement, (ii) the applicable Inaction Period shall have expired, and (iii) the
Agent shall not have commenced and be diligently pursuing in good faith the
exercise of its enforcement rights and remedies against all or a material
portion of the Collateral (including, without limitation, any action to enforce
its Liens on the Collateral) pursuant to, and in accordance with the terms of
the Loan Agreement and the other Loan Documents and (b) during an Insolvency
Proceeding involving the Obligors, when each of the following conditions are
satisfied: (i) the Obligors have not entered into, and are not seeking to enter
into, a Post-Petition Financing that is a Conforming Post-Petition Financing,
(ii) the Agent is not diligently pursuing in good faith the exercise of its
enforcement rights and remedies against all or a material portion of the
Collateral (including seeking in good faith relief from the automatic stay (or
any other stay) in any Insolvency Proceeding with respect to all or a material
portion of the Collateral) and (iii) the applicable Inaction Period shall have
expired.

 

“Inaction Period” shall mean the period of time commencing upon the date of the
Agent’s receipt of a written notice (in accordance with the notice provisions in
the Loan Agreement) from the Required Tranche A-1 Lenders that an Event of
Default has occurred and is continuing under the Loan Agreement and has not been
waived in accordance with the terms of the Loan Agreement or this Schedule 14 to
the Loan Agreement and ending on the date which is (x) zero (0) days after the
commencement of an Insolvency Proceeding by any Obligor (subject in all respects
to this Schedule 14 to the Loan Agreement)), (y) thirty (30) days after receipt
of such notice with respect to an Event of Default under Section 11.1(a) of the
Loan Agreement, with respect to an Event of Default under Section 11.1(b)(i) of
the Loan Agreement or with respect to an Event of Default under
Section 11.1(c) of the Loan Agreement as a result of a violation of Section 8.1
or Section 10.1.2(c), (n) or (o) or Section 10.3 of the Loan Agreement or
(z) sixty (60) days after the date of receipt of such notice with respect to any
other Event of Default under the Loan Agreement; provided that such Inaction
Period shall be tolled for any period prior to the commencement of any
Insolvency Proceeding that the Secured Parties are stayed or otherwise
prohibited by law or court order from exercising remedies with respect to the
Collateral.  Such written notice from the Tranche A-1 Lenders to the Agent shall
reference the Loan Agreement and declare that the “Inaction Period” has
commenced.

 

“Inadvertent Overadvance Amount” shall mean the aggregate principal amount of
all Inadvertent Overadvances, until such time as no Overadvance Loan is
outstanding.

 

“Inadvertent Overadvances” shall mean the funding of any Loan or advance or the
issuance, renewal or amendment of any Letter of Credit by an Issuing Bank which
did not result in an Overadvance Loan when made based upon the most recent
Borrowing Base Certificate delivered to the Agent prior to such funding or
issuance, renewal or amendment but which has become an Overadvance Loan as the
result of (a) a decline in the value of the Collateral, (b) errors or fraud on a
Borrowing Base Certificate, (c) components of the Tranche A Borrowing Base or
Tranche A-1 Borrowing Base on any date thereafter being deemed ineligible,
(d) the return of uncollected checks or other items of payment applied to the
reduction of Loans or other similar involuntary or unintentional actions, (e)
any modification or increase of the Availability Reserve or the Tranche A-1
Utilization Amount or a reduction in advance rates after the funding of any Loan
or advance or the issuance, renewal or amendment of any Letter of Credit, or
(f) any other circumstance beyond the reasonable control of the Agent or any
Secured Party that results in the reduction of the realizable value of the
Tranche A Borrowing Base or Tranche A-1 Borrowing Base or which reduces
availability or the amount that may be borrowed under the Loan Agreement
(including, including without

 

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limitation, as the result of the entry of an adverse order for use of cash
collateral by the United States Bankruptcy Court).

 

“Permitted Insolvency Increase Amount” shall mean, in connection with any
Post-Petition Financing, an amount equal to five percent (5.0%) of the Aggregate
Borrowing Base as determined by the DIP Lenders in their reasonable discretion.

 

“Plan” shall mean plan of reorganization, compromise or arrangement or similar
dispositive restructuring plan under the Bankruptcy Code or any other Applicable
Law.

 

“Post-Petition Financing” has the meaning set forth in Section 1(b)(I) of this
Schedule 14 to the Loan Agreement.

 

“Priority Tranche A Claims” shall mean any and all Obligations owing by any
Obligor to the Agent or any of the Tranche A Secured Parties arising under the
Loan Documents, exclusive of those consisting of Bank Product Debt.

 

“Purchase Notice” has the meaning set forth in Section 10(a) of this Schedule 14
to the Loan Agreement.

 

“Purchase Option Event” has the meaning set forth in Section 10(a) of this
Schedule 14 to the Loan Agreement.

 

“Purchasing Creditors” has the meaning set forth in Section 10(a) of this
Schedule 14 to the Loan Agreement.

 

“Recovery” has the meaning set forth in Section 7(b) of this Schedule 14 to the
Loan Agreement.

 

“Released Insolvency Reserves” has the meaning set forth in Section 8(a) of this
Schedule 14 to the Loan Agreement.

 

“Tranche A Claims” shall mean any and all Obligations owing by any Obligor to
the Agent or any of the Tranche A Secured Parties arising under the Loan
Documents or any Bank Products.

 

“Tranche A Purchase Date” has the meaning set forth in Section 10(a) of this
Schedule 14 to the Loan Agreement.

 

“Tranche A Secured Claims” shall mean any portion of the Tranche A Claims that
would not be an unsecured claim under Section 506(a) of the Bankruptcy Code (or
any similar provision of other Applicable Law) assuming that the Tranche A
Claims are secured by Liens on the Collateral that are prior to the Liens
securing the Tranche A-1 Secured Claims.

 

“Tranche A Secured Parties” shall mean, collectively, (a) the Agent, (b) each
Tranche A Lender, (c) each Issuing Bank, (d) each other Indemnitee and each
other holder of any Obligation relating to the credit facility provided by the
Tranche A Lenders under the Loan Agreement and (e) each Tranche A Lender (or any
of its affiliates) in its capacity as a provider of Bank Products.

 

“Tranche A-1 Claims” shall mean all Obligations owing by any Obligor to any of
the Tranche A-1 Secured Parties arising under the Loan Documents.

 

“Tranche A-1 Secured Claims” shall mean any portion of the Tranche A-1 Claims
that would not be an unsecured claim under Section 506(a) of the Bankruptcy Code
(or any similar provision of other Applicable

 

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Law) assuming that the Tranche A Claims are secured by Liens on the Collateral
that are prior to the Liens securing the Tranche A-1 Claims.

 

“Tranche A-1 Secured Parties” shall mean, collectively, (a) the Tranche A-1
Lenders and (b) each other Indemnitee and each other holder of any Obligation
relating to the credit facility provided by the Tranche A-1 Lenders under the
Loan Agreement.

 

“Voting Procedures Order” has the meaning set forth in Section 1(d)(II) of this
Schedule 14 to the Loan Agreement.

 

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